Vedder Thinking | Articles Employers: Paid Family Leave is IN and Salary Inquiries are OUT
December 11, 2017
Recent employment legislation in New York State and New York City affords new benefits and protections to employees and job applicants. These laws also bring new obligations for employers. Before the holiday season is in full swing, employers should take steps to ensure compliance with the two laws described below.
NYS Paid Family Leave Benefits Law
Effective January 1, 2018, the New York State Paid Family Leave Benefits Law (“PFL”) will require that employers provide paid family leave to eligible employees. An employee must work at least 20 hours per week and have worked at least 26 consecutive weeks to be eligible for paid family leave. A part-time employee who works less than 20 hours per week will also be eligible for benefits after the employee has worked for the employer for 175 days. Regulations clarify that the 175-day requirement is for days actually worked, not calendar days. Virtually every private employer must comply with these new obligations as there is no minimum employee requirement. PFL is a benefit for employees who work in New York State, regardless of where the employer is headquartered or where the employee lives. An employer that is located outside of New York need not cover employees who live in New York but work outside of New York.
PFL entitles employees to paid leave: (1) to provide care for a family member’s serious health condition; (2) to bond with a child during the first year of the child’s life, whether it be the first year after the child is born, or the first year after the child is placed with an employee through adoption or foster care placement; and (3) for any qualifying reason (as set forth in the federal Family and Medical Leave Act (“FMLA”)) arising from an employee’s spouse, partner, child, or parent being on active military duty or being notified of an impending call or order of active military duty abroad.
PFL benefits, which are provided through an insurance policy to be obtained by the employer, are as follows:
- January 1, 2018: 8 weeks paid leave at 50% of an employee’s average weekly wage or 50% of New York’s average weekly wage, whichever is less.
- January 1, 2019: 10 weeks paid leave at 55% of an employee’s average weekly wage or 55% of New York’s average weekly wage, whichever is less.
- January 1, 2010: 10 weeks paid leave at 60% of an employee’s average weekly wage or 60% of New York’s average weekly wage, whichever is less.
- January 1, 2021: 12 weeks paid leave at 67% of an employee’s average weekly wage or 67% of New York’s average weekly wage, whichever is less.
An employer must permit, but cannot require, employees to use their accrued paid time off (“PTO”) so that the employees can earn their full salary during their leave. However, if a PFL leave also qualifies as an FMLA leave, the employer may require the employee to use PTO.
In addition, PFL requires employers to reinstate employees returning from leave to their prior position, or to a comparable position with comparable pay and benefits. Further, PFL requires employers to continue to provide health insurance to employees while on paid leave, and may require that employees continue to pay their health insurance premium contributions (if any) while on leave.
The premiums for PFL insurance may be deducted from an employee’s paycheck. Employers must post a workforce notice of compliance to inform employees that the employer provides PFL. In addition, employers should update written employment materials, such as employee handbooks, to include PFL information.
NYC Salary History Law
Effective October 31, 2017, it is an unlawful discriminatory practice under the New York City Human Rights Law for a NYC employer, employment agency, or employer’s agent to: (1) inquire about the salary history of a job applicant for employment; or (2) rely on the salary history of a job applicant to determine the applicant’s salary or benefits during the hiring and contract negotiation processes.
The law defines “to inquire” as “to communicate any question or statement to an applicant, an applicant’s current or prior employer . . . or to conduct a search of publicly available records or reports for the purpose of obtaining an applicant’s salary history.” “Salary history” is defined to mean “the applicant’s current or prior wage, benefits, or other compensation.”
The law provides a few important exceptions. For example, an employer may discuss a job applicant’s expectations regarding salary or benefits. An employer may also ask about the value of competing offers and counteroffers, as well as revenue, sales, production reports, profits generated, deferred compensation, unvested equity, or books of business. In addition, if a job applicant “voluntarily and without prompting” shares his/her salary history with an employer, the employer may consider the applicant’s salary history when determining the applicant’s salary and benefits, and may further verify the applicant’s salary history. Moreover, the law does not apply to a current employee’s application for internal transfer or promotion. Finally, the law does not prevent an employer from conducting a background check or verifying an applicant’s disclosure of information unrelated to salary history. However, if the background check or verification does in fact disclose an applicant's salary history, an employer may not rely on the disclosure to determine the applicant’s salary or benefits.
According to FAQ’s from the New York City Commission on Human Rights, an employer may not ask about salary history during an interview held outside of NYC if the position is for a job in NYC.
The law applies not only to employers, but also to headhunters. If a job applicant voluntarily and without prompting discloses his/her salary history to a headhunter, the headhunter should obtain written confirmation from a job applicant that the applicant consents to the disclosure of his/her salary history to the headhunter’s client or employer. Further, if an employer chooses to work with a headhunter, the employer should obtain a copy of a job applicant’s written consent authorizing the headhunter to disclose the applicant’s salary history information.
Employers should update job application materials and train all employees who are part of the hiring and job negotiation processes to ensure compliance.
This new law is part of a growing trend nationwide intended to promote gender and racial pay equity. Similar laws have been passed in other jurisdictions, including California, Massachusetts and Delaware.
If you have any questions about these laws, please contact Blythe E. Lovinger +1 (212) 407 7770, or Jonathan A. Wexler +1 (212) 407 7732, or any other Vedder Price attorney with whom you have worked.