New York Jurisdictions Expand Worker Protections

New York Governor Kathy Hochul has announced via a press release the progress and added efforts by the Wage Theft Task Force to combat employer wage theft in New York.

Background:

The Wage Theft Task Force is a joint effort between the state’s Department of Labor (DOL), attorney general and district attorneys.

The task force’s efforts began in the construction industry, covering wage theft, failure to pay prevailing wages in public works contracts, fraud and safety hazards. Since then, the task force’s mandate was expanded to other industries in New York, such as restaurant enterprises, focusing on wage theft, misclassification of employees and overtime pay.

Announcements:

The press release stated that the Wage Theft Task Force has secured felony convictions and agreements from more than a dozen businesses and 265 individuals to pay $3 million in wage restitution and contributions owed to the state since the start of the COVID-19 pandemic.

Note: See the press release for information on civil agreements and felony convictions.

Task Force Enhancements :

The press release also announced the following enhancements to the New York wage theft prevention efforts:

New Yorkers may report wage theft directly to the state’s DOL via the hotline (833) 910-4378, effective immediately. Language interpretation services for various languages are also available for non-English speaking callers.
The New York DOL is also developing a state-of-the-art Worker Protection System to enable New Yorkers to report claims online in multiple languages and receive status updates in real-time. The project is scheduled to be completed in 2023.

Next Steps:

New York employers may wish to consult with appropriate legal counsel and other advisors to conduct a review of relevant practices, and they should ensure that:

Employees are properly classified as exempt or non-exempt from overtime and minimum wage requirements;
Non-exempt employees are paid at least minimum wage for all hours worked and paid for all overtime hours at the correct amount;
Independent contractors are appropriately classified as such (and that they would not be more appropriately classified as employees);
All employees are paid timely;
Tipped employees are properly paid, tips are not withheld from employees, and any tip pooling arrangements are lawful;
Any deductions from wages are lawful;
Prevailing wage requirements are satisfied as applicable;
Pay statements issued to employees are accurate and complete, with all required information clearly displayed;
A process is in place for maintaining required payroll records under your data retention policy (if applicable) and for at least the period of time required by law.

New York City has enacted legislation (Int. No. 1894-A) that amends the New York City Human Rights Law and regulates the use of automated tools in certain employment decisions. The law takes effect on January 1, 2023.

Updated July 2022: The city has issued guidance that contains the schedule of penalties employers may face if found in violation of the law, and lists circumstances under which a separate, daily violation would occur:

An employer’s failure to provide notice to a candidate or employee as required by law.
Each day an employer uses an automated employment decision tool in violation of the law.

The Details:

The legislation regulates New York City employers and employment agencies' use of artificial intelligence, data analytics, machine learning, or statistical modeling (automated employment decision tools) that are used to substantially assist or replace discretionary decision making for employment decisions.

The law generally applies to computerized tools or software programs based on algorithms to identify, select, evaluate or recruit candidates, such as:

Recruiting tools that review résumés, chat with or rank applicants, or conduct behavioral analysis of candidates; and
Tools used to assess workers' skills, performance and productivity, or monitor field-based or remote employees.

Note: The law does not include a tool that does not automate, support, substantially assist or replace discretionary decision-making processes and that does not materially impact people, including, but not limited to, a junk email filter, firewall, antivirus software, calculator, spreadsheet, database, data set, or other compilation of data. The law is also silent on tools that identify employees for termination or reductions in force.

Notice Requirement:

Under the law, employers must notify a New York City resident that applied for a position (at least 10 business days before using the tool) if their application will be subject to an automated tool as part of the decision-making process and what specific job qualifications and characteristics the tool will use to assess workers and candidates. The notice must also inform candidates of their right to request an alternative selection process or accommodation.

Using an Automated Employment Decision Tool:

To use an automated employment decision tool, covered employers must retain an independent auditor to assess whether the tool's selection criteria result in disparate impact based on race, ethnicity, or sex on an annual basis. They must also publish a summary of the results and the distribution date of the tool on their website.

The law also requires covered employers to retain information about the source and type of data collected for the tool and the businesses' data retention policy. Employers must disclose this information on their website or provide it to an applicant within 30 days of a written request, unless prohibited by law.

Penalties:

Employers that fail to comply may face fines. See the schedule of penalties for further details.

Next Steps:

If considering the use of automated employment decision tools, New York City employers should:

Create a process for conducting independent audits as required by law;
Comply with the notice requirements above and consider issuing the required notice to all applicants for New York City openings and promotions to help minimize issues with capturing NYC residency;
Allow for employees and candidates to opt-out of the automated employment tool process; and
Update data-retention policies to ensure compliance with the law.

Covered employers should also anticipate further regulations from the city that clarify their obligations under the law.

Compliance Update