SIGNIFICANT H.R. AND EMPLOYMENT LAWS CHANGES FOR 2023

SIGNIFICANT H.R. AND EMPLOYMENT LAWS CHANGES FOR 2023

It’s a New Year!  Along with-it Father Time delivers the Baby New Year.  This cuddly bundle of joy rings in 2023 with both that “new baby smell” and several significant changes to human resources and employment law.  Some of these are already in effect, while others are coming online throughout the year.  Here’s a quick summary of several of the more significant provisions.

Employers should be aware of these changes and, often, update their policies and employment handbooks to comply with these new and revised requirements.  We summarize each and provide a “Skinny” suggesting compliance steps employers should consider taking.

Wage Transparency Spreads Statewide from NYC.  On December 21, 2022, Governor Hochul signed a law adopting statewide much of the wage transparency requirements enacted by New York City last year.  The law is effective 270 days after the Governor’s signing, or September 17, 2023.

Starting on that glorious day, no New York employer with four (4) or more employees may advertise for any job, promotion or transfer opportunity performed, even partially, within the Empire state, without disclosing in the advert: (1) the “range of compensation”; (2) the job description, if one exists; and (3) whether the employee will be paid solely on commission.  “Range of compensation” is defined as the minimum and maximum annual salary or hourly wage for the advertised position, which the employer believes in good faith to be accurate at the time of the posting.

The law imposes an open-ended obligation on employers to keep and maintain records showing their compliance with the above requirements.  The New York State Department of Labor (“DOL”) is authorized to promulgate rules and regulations for the transparency law, which may clarify and limit this record-keeping obligation.

Employers are prohibited from retaliating against employees exercising their rights under the law.  This probably means that if an employer doesn’t make the required disclosures in a job posting, applicants may demand such information and employers may not take any action, such as refusing to provide the information, declining to interview, or hire, such an applicant.  Applicants or employees believing that employers violated the law, may file a complaint with DOL, which is empowered to investigate, set an “appropriate remedy” and impose civil penalties.

THE SKINNY:  If you have four or more employees, begin updating your job announcements now to comply with the transparency law by September 17, 2023.  This includes formulating accurate pay ranges regarding all openings for which you’re going to advertise.  While your ranges don’t need to be precise, they must be reasonable and provide applicants with a real sense of the least and most they can expect to earn.  That is, employers trying to circumvent the new law by disclosing meaningless pay ranges, such as “one dollar to one billion dollars”, will probably find themselves at DOL’s tender mercies and facing penalties and other “remedies”.

Accommodating Nursing Mothers at Work.   On December 9, 2022, Governor Hochul signed a lactation accommodation law, which is effective as of June 7, 2023.  The law requires employers to designate a room or location allowing employees to pump breast milk.

The law also clarifies what qualifies as a legally compliant lactation room.  Lactation rooms must be: (1) near the work area; (2) well lit; (3) shielded from view; and (4) free from intrusion from other persons in the workplace or public.  Further, these rooms must also include, at a minimum: (1) a chair; (2) a small table; (3) nearby access to running water; and (4) an electrical outlet, if the workplace is supplied with electricity.  In other words, employers may no longer consign nursing mothers to toilet stalls, broom closets, storage rooms or similarly inappropriate locations.  Employers can seek exemptions by showing undue hardship based on the size, financial resources and nature of their businesses.  If you have refrigerators in your shop, you must expand access to allow for storing breast milk.

DOL is developing a model written policy regarding the rights of nursing mothers to express breast milk at work under the new law.  DOL must issue the policy before the law’s June 7, 2023 effective date.  Employers will then be required to adopt the policy and distribute it to: (1) all employees upon hire; (2) employees returning to work following the birth of a child; and (3) annually to all current employees. 

Finally, of course, employers are prohibited from retaliating against employees exercising their rights under this law.

THE SKINNY:  If you don’t provide a lactation room conforming to the new requirements, you’d best take steps to do so by June 7, 2023.  Also, keep your eyes peeled for the forthcoming DOL model policy, as it must be adopted by your business and distributed to your employees.

Electronic Workplace Posting Requirement.  Following on the heels of last year’s new requirement for private employers to give their employees prior written notice if they are subjected to electronic monitoring, employers must now also make electronically available to employees copies of all notices which are legally required to be physically posted.  This includes, of course, the notice of electronic monitoring but also mandates digital versions of the posters you pin up on your break room bulletin boards (next to those ubiquitous tear-off ads for guitar lessons and puppies) covering everything from minimum wage rates, Family Medical Leave Act, NYS paid leave, anti-discrimination protections, etc.

This new law, which Governor Hochul signed and was immediately effective on December 16, 2022 (thanks for the advance heads up!), specifies that digital versions of these posters may be displayed on employer websites or issued via email.  In a Kafkaesque coupe de grâce, employers must also -- wait for it -- notify their employees that documents which are physically posted are also available electronically.  No word on whether that notice must be provided electronically or in writing, physically posted or all the above.  Because, you know, why be clear when imposing new requirements when Albany can luxuriate in ambiguity?

THE SKINNY:  Check with whomever provides you with your break room posters to get digital copies.  If possible, the easiest route to compliance appears to be uploading and maintaining them on your website and sending a companywide email blast notifying your staff that “all documents required to be physically posted at our worksite under state or federal law are now available on our company website at: [insert the web address of the permanent online page hosting these posters and notices]”.  Employers should also make corresponding updates to your policies and handbooks.

Intermittent Leave under NYS Paid Family Leave Law (“PFL”).  As astute readers with freakish memories (or insufficient outside interests) recall from my 2022 New Year’s HR update, as of January 1, 2023, the PFL began providing eligible employees with up to 12 weeks of job protected, paid time off to care for a biological, adopted, step, and half-sibling(s) suffering from a serious health condition. 

The PFL has been amended again, this time to lift its 60-day cap on intermittent leave.  The maximum number of PFL leave days is based on the average number of weekly days worked by an employee.  Employees averaging more than five (5) days per week will be allowed additional leave beyond the defunct 60-day cap.  For instance, employees working an average of six (6) days a week will be allowed 72 days of intermittent PFL.

These amendments, like the biological siblings, adopted siblings, stepsiblings, and half-siblings provision, became effective on January 1, 2023.

THE SKINNY:  Your PFL insurance carrier should be up to date on these changes.  However, employers should review their handbooks to ensure that they accurately reflect the new entitlement to take leave to care for siblings of every ilk, as well as the newly expanded amount of intermittent leave available.

COVID-19 Vaccine Paid Leave.  As with last year, private employers and select public employers, must continue giving their employees up to four hours of paid leave per COVID-19 jab, unless an employee is afforded more leave under a collective bargaining agreement or as otherwise authorized by an employer.  This law has been extended through December 31, 2023.

The leave must be paid at the employee’s regular rate of pay for each COVID-19 vaccination (boosters included).  This leave cannot be charged against any other leaves, such as paid time off, sick leave or any rights and benefits which employees may have under a collective bargaining agreement.  Vaccination leave must be provided in addition to any such leave.

THE SKINNY:  Employers should be aware of this continuing obligation throughout 2023.  In the wake of China’s rapid and haphazard abandoning of its “zero-COVID” policy, the Middle Kingdom has become the World’s largest open-air petri dish for creating new strains of the virus.  As such, you should also bear in mind the risk possibly posed by these emerging variants and that employees will likely continue using vaccination leave.  Employers should update their policies and handbooks to reflect this continuing (and, it is sadly beginning to seem, permanent) obligation.

No Disciplinary Action based on Using Protected Leave.  Starting next month on February 20, 2023, employers are barred from taking disciplinary action against employees for using any form of leave legally protected under any federal, state or local law. Examples of such protected leave include PFL and New York paid sick leave, jury duty leave, voting leave, domestic violence leave, vaccination leave and any leave under federal law such as the Family and Medical Leave Act leave.

This is especially important if you have a no-fault attendance policy.  These are policies in which employers count a point against employees who are absent, regardless of the reason for the absence.  No-fault attendance policies tend to be more common in unionized shops and industries involving manufacturing and manual labor.  The new law expressly prohibits “assessing any demerit, occurrence, any other point, or deductions from an allotted bank of time, which subjects or could subject an employee to disciplinary action.” While this doesn’t prohibit the use of no-fault attendance policies, absences covered by protected leaves cannot be counted.

And, surprise, surprise, employers may not retaliate or discriminate against an employee for registering a complaint under the law.  If you do, watch out.  Employers violating the law face a lashing as their workers have the right to directly sue and seek monetary compensation, like back pay, liquidated damages and attorney’s fees.  (These fees are often vastly more than any actual damages that may be awarded and serve as catnip drawing the attention of plaintiff’s attorneys prowling for lawsuits like a feline looking for a mouse.) Further, the DOL can also bring its own enforcement actions with the potential to impose civil penalties of up to $10,000.00 for the first violation, and $20,000.00 for each repeat violation.

THE SKINNY:  Employers with no-fault attendance policies should review them carefully to ensure they are conforming with the new law as of February 20, 2023.  You can keep a policy using points to track attendance, but legally protected absences can't be included.  If you have such a policy, you need to consider the reason for each absence before deducting points or leave time based on an absence to make sure that protected leaves are not being counted against employees.  Managers, HR professionals and anyone else tracking attendance should familiarize themselves with this new law.

Federal Trade Commission (“FTC”) Considering Banning Non-Compete Agreements.

Okay, deep breaths, everyone.  This hasn’t happened.  Yet.

However, on January 5, 2023 the FTC proposed a sweeping Notice of Proposed Rulemaking (“NPRM”) banning non-compete agreements in employment contracts.  The NPRM follows up on a recent Executive Order directing the FTC to limit the use of “unfair” non-compete agreements.  The Biden Administration contends that such agreements harm workers and hinder competition.  Rather than limiting its NPRM to unfair non-competition covenants which overreach or make it difficult or impossible for former employees to earn a living, the FTC is trying to ban all such covenants, regardless of their geographic or temporal scope.  Nice.

This is a huge reach by the FTC.  The NPRM will, if adopted into law as is, almost certainly face immediate legal challenge.  The U.S. Chamber of Commerce is mobilizing opposition. 

The proposed rule would massively reduce the ability of employers to use non-compete agreements.  The NPRM is breathtakingly broad in both its application and scope.  Some of the “highlights”, include:

• Defining a “non-compete clause” as a “contractual term between an employer and a worker that prevents the workers from seeking or accepting employment with a person or operating a business after the conclusion of the worker’s employment with the employer.”

• How employers characterize or label a non-compete would not matter and workarounds will not be allowed as the FTC’s non-compete definition is functional, forbidding any terms or conditions having the “effect” of restricting work for a competitor following the termination of employment (that is, broadly drafted non-disclosure or non-solicitation provisions).

• The NPRM prohibits employers from entering or attempting to enter new non-compete agreements.  However, it is also retroactively effective as it: (1) requires employers to rescind currently existing non-compete agreements while providing notice of the rescission to current and former employees; and (2) prohibits employers from representing that workers are subject to enforceable non-compete provisions.  You would not even be able to rely on restrictive covenants entered into prior to the effective date of a final rule.

• The NPRM would cover nearly all workers, including employees (both highly skilled and trained professionals and non-professionals alike), contractors, and interns.

• Currently, the only exception in the NPRM is limited to non-compete provisions agreed to as part of the sale of a business by sellers who have a “substantial” ownership in the sold business.

In the “Silver Lining Department”, there’s been no indication that the FTC is planning to make the ownership of private property illegal, nationalize the means of production or call for the end of the bourgeoisie.  Yet.

THE SKINNY:  The public, including employers, have 60 days from January 5, 2023 to comment on the NPRM.  You may wish to do so (if you do, please refrain from using expletives, no matter how strong the desire).  Comments are due by March 10, 2023.  Here is the link where you’ll find the option to leave your “comment” at the bottom of the page:  https://www.regulations.gov/docket/FTC-2023-0007/document.

You should also keep in mind the potential sweeping changes which the NPRM may cause and be ready for the possibility that you’ll have to significantly modify or abandon most restrictive covenants going forward.  Meanwhile, you will want to weigh carefully whether paying a bonus to current employees for signing new non-competes (which is prudent under New York law to ensure that such covenants are legally enforceable), is a wise investment given that the potential ban under the NPRM may not warrant an investment in securing new non-compete.

If you’re sensing that the “new baby smell” is giving way to another, less pleasant odor often associated with freshly minted human beings, join the club.  Regardless of the stench, employers should hold their noses and follow up on the above changes to be sure they are complying.  Failing to do so can land you in a full diaper load of trouble!

This article is intended to be used for informational purposes only. Legal advice is neither implied by the author nor should be inferred by the reader. If you have specific legal questions, you should consult with your attorney.

Jeffrey Sculley, who may be reached at jsculley@cmrlaw.com, is an attorney and counselor at law focusing his practice on representing commercial and residential landlords; providing backroom human resource and employment support to businesses and not-for-profits; appealing adverse trial-court and administrative decisions; counseling clients on logo and brand development and trademark protection; and representing clients in all types of administrative, regulatory and compliance matters, before governmental agencies and administrative hearing officers and law judges.