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Vedder Thinking | Articles A Host of New Laws in New York State and City Merit Your Attention If You Do Business in the Empire State and/or the Big Apple

Newsletter/Bulletin

New Laws Set to Go into Effect Statewide Enhance Women's Rights

Governor Andrew Cuomo recently signed several bills aimed at protecting women's rights in New York State. The bills, collectively known as the Women's Equality Act, amend various state laws and include measures that expand protections for employees with children and improve workplace accommodations for pregnant employees. The new laws go into effect on January 19, 2016.

The Achieve Pay Equity bill (S. 1/ A. 6075), which amends Section 194 of the New York Labor Law, addresses pay equality for women in New York. First, the bill bars employers from prohibiting employees from discussing their salaries by threatening them with suspension or termination. Under the new law, employees may disclose and discuss their salaries with each other while at work, though an employer may implement a written policy to establish reasonable workplace and workday limitations on the time, place and manner of such discussions.

Second, the amendment strengthens the prohibition against unequal pay between men and women. Under Section 194(1) of the Labor Law, men and women may be paid different amounts for similar work only if the employer can prove the differential is based on a seniority system, a merit system, a system that measures earnings by quantity or quality of production or any factor other than sex. After passage of this new bill, an employer must show that any pay differential is based on "a bona fide factor other than sex, such as education, training and experience" and is both job-related and consistent with business necessity, which the statute defines as a factor that bears a manifest relationship to the employment in question. However, an employee may be able to overcome the employer’s defense if the employee can demonstrate that (i) the employer uses an employment practice that causes a disparate impact on the basis of sex, (ii) an alternative employment practice exists that would serve the same business purpose and not produce such a disparity, and (iii) the employer has refused to adopt such alternative practice.

Third, the bill expands the geographic area throughout which employees' wages are compared for the purpose of determining whether gender-based discrimination exists. The Labor Law prohibits pay differentials between men and women for equal work performed in the "same establishment." Under the new bill, employees' pay rates may be compared even if the employees work in different locations, so long as they are within the same county.

Finally, the bill increases the amount of damages that a plaintiff may recover if an employer is found to have willfully violated the law’s prohibition of gender discrimination in the payment of wages, from one hundred percent of the total amount of wages found to be due to three hundred percent.

The Protect Victims of Sexual Harassment bill (S. 2/ A. 5360) amends Section 292 of the New York State Human Rights Law. It protects employees from sexual harassment regardless of the size of the employer. While the current definition of "employer" under the New York State Human Rights Law excludes those with fewer than four employees, the new law expands this definition (for the purposes of sexual harassment cases only) to cover all employers within New York, regardless of the number of employees.

The Remove Barriers to Remedying Discrimination bill (S. 3/ A. 7189) amends Section 297 of the New York State Human Rights Law and allows a prevailing plaintiff to recover reasonable attorneys' fees in an employment or credit discrimination case based on sex. Defendants can recover reasonable attorneys' fees only if they can prove that the action was frivolous.

The End Family Status Discrimination bill (S. 4/ A. 7317) amends Section 292 of the New York State Human Rights Law and makes it unlawful for an employer to discriminate on the basis of familial status. "Familial status" means being pregnant, having one or more children, or securing legal custody of a child under 18 years of age. New York previously protected family status only in the areas of housing and credit. This law prohibits employment agencies, licensing agencies and labor organizations from discriminating against employees based on familial status.

Finally, the Protect Women from Pregnancy Discrimination bill (S. 8/ A. 4272) amends Section 296 of the New York State Human Rights Law and requires employers to provide reasonable accommodation of pregnancy or pregnancy- related conditions and to perform a reasonable-accommodation analysis for employees with pregnancy-related conditions. Employers must accommodate pregnancy unless doing so would create an undue hardship for the business. The amendment also codifies the requirement that an employee cooperate in providing medical or other information upon the employer’s request to verify the existence of a pregnancy-related condition.

The new laws will go into effect on January 19, 2016. Employers should review their current policies to ensure compliance with the new provisions. If you have any questions about the application of these new laws, please contact one of Vedder Price's labor and employment attorneys.

New York City Law Limits the Use of Credit History in Employment Decisions

New York City has joined an increasing number of states and cities, including California and Chicago, in enacting laws intended to prevent employers from using the consumer credit history of an employee or applicant when making employment decisions. The Stop Credit Discrimination in Employment Act (the Act or SCDEA), which went into effect on September 3, 2015, amends the New York City Human Rights Law (NYCHRL), making it illegal for most employers to request or use an employee's or applicant's credit history for employment purposes, unless one of eight exceptions applies. The NYC Commission on Human Rights issued a Legal Enforcement Guidance on the Stop Credit Discrimination in Employment Act on September 30, 2015.

Prohibited Acts

The Act generally prohibits an employer with four or more employees from requesting or using an employee's consumer credit history when making decisions related to hiring, compensation, and other terms and conditions of employment. Consumer credit history, as defined by the SCDEA, is "an individual's credit worthiness, credit standing, credit capacity, or payment history, as indicated by: (a) a consumer credit report; (b) credit score; or (c) information an employer obtains directly from the individual regarding matters such as the individual's number of credit accounts, late or missed payments, charged-off debts, items in collections, credit limit, prior credit report inquiries, or bankruptcies, judgments, or liens." Notably, the term "consumer reporting agency" is defined more broadly than under either the federal or state Fair Credit Reporting Acts. It is an unlawful discriminatory practice simply to request or use consumer credit history, even if the practice does not lead to any adverse employment action. Whether there was a subsequent adverse employment action is relevant for determining damages or penalties, but is irrelevant for determining liability.

Exemptions

The Act recognizes a number of exemptions pursuant to which an employer may request information about an applicant's or employee's consumer credit history, including employers required by state or federal law or regulation to use an individual's consumer credit history for employment purposes, positions for which bonding is required by law, as well as non-clerical positions having regular access to trade secrets, and positions involving responsibility for funds or assets worth $10,000 or more. Employers relying on these exemptions must inform the applicant or employee of the claimed exemption and must keep a record of that exemption in a log for five years. There are, not surprisingly, a number of requirements with which an employer must comply in order to maintain a legally sufficient log.

Penalties

Civil penalties under the Act may range from $125,000 for inadvertent violations, up to $250,000 for violations that are the result of willful, wanton or malicious conduct. These penalties are in addition to other remedies available to individuals who may bring a claim under the NYCHRL, including, but not limited to, front and back pay, compensation, punitive damages and attorneys' fees.

Next Steps

Given the breadth of the SCDEA, its narrowly defined exemptions and the severe penalties, New York City employers are encouraged to carefully review the policies and procedures they currently have in place with respect to the use of credit history in hiring or other employment decisions. If you have any questions about the application of this new law, please contact Jonathan A. Wexler at +1 (212) 407 7732, Ashley Huddleston at +1 (212) 407 7793 or one of Vedder Price's labor and employment attorneys.

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Jonathan A. Wexler

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Ashley B. Huddleston

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