United States: Employment Reminders For 2016


The new year brings several important changes to New York City and State employment laws.  In this alert, we will analyze New York City's new requirement that most private employers will now have to offer pre-tax transit benefits, the Caregiver Discrimination Bill passed by New York City Council and the status of minimum wage in New York and New Jersey.  


Effective January 1, 2016, under New York City's Affordable Transit Act (the "Act"), Intro 295-A, most private employers with 20 or more full-time employees in New York City are required to offer its full-time employees the opportunity to use pre-tax earnings to purchase certain transportation fringe benefits that are qualified under the Internal Revenue Service (other than qualified parking).  Such transportation fringe benefits include: MTA subway and bus, Long Island Railroad, New Jersey Transit, Metro North, Amtrak, eligible van pooling services, eligible commuter bus services and Access-A-Ride.  

The law defines "full-time employees" as those who work an average of 30 hours or more per week for the employer in New York City.  The Act exempts certain employers from coverage, namely:

(1) government employers;

(2) employers that are not required by law to pay federal, state and city payroll taxes;

(3) employers that are party to a collective bargaining agreement, except where the number of full-time employees not covered by the collective bargaining agreement is 20 or more, in which case those full-time employees not covered by the collective bargaining agreement must be eligible for the benefit; and

(4) employers who demonstrate that offering qualified transportation benefits would cause financial hardship.

Once a covered employee becomes eligible for these benefits, the employee remains eligible throughout his or her employment, even if the employer subsequently falls below the 20-employee threshold. 

Employers are required to provide their covered employees with a written offer of the opportunity to use pre-tax income to purchase these qualified transportation benefits by January 1, 2016, or four (4) weeks after an employee begins full-time employment, whichever is later.  Employers also must maintain records demonstrating that they have made such offers and their employees' responses for two (2) years.

Violations of the law may result in an assessment of civil penalties by the NYC Department of Consumer Affairs (DCA), the agency charged with enforcing the Act. Although the Act goes into effect on January 1, 2016, employers will have a six (6) month grace period -- until July 1, 2016 -- to establish a commuter benefits plan before being subjected to penalties.  Moreover, the new law includes a 90-day cure period whereby an employer in violation will have 90 days to cure a first violation before a penalty is actually imposed.

An employer found to be in violation of the Act can be liable for a civil penalty ranging from $100 to $250 for the first violation.  After the expiration of the 90-day cure period, every 30-day period that the employer fails to offer the benefit will constitute a subsequent violation and a civil penalty of $250 will be imposed for each subsequent violation, limited to 1 penalty per 30-day period.

What This Means To You

New York City employers that are subject to the Act should determine whether current employee benefit programs offer full-time employees the opportunity to use pre-tax earnings to purchase qualified transportation fringe benefits in accordance with federal law. If that opportunity is not offered, employers should amend or establish such a benefit plan or program to take effect immediately, ensuring that all employees who work an average of 30 hours or more per week in New York City are eligible for the benefits.


On December 16, 2015, the New York City Council voted in favor of Int. No. 108-A, legislation that amends the New York City Human Rights Law (NYCHRL) to include "caregiver status" as a protected class. The amended NYCHRL will now prohibit discrimination on the basis of an employee's actual or perceived status as a caregiver.  The legislation is awaiting Mayor Bill de Blasio's signature.

Under the NYCHRL, it is an unlawful discriminatory act for an employer to refuse to hire, terminate or discriminate against an employee in compensation or in relation to terms, conditions or privileges of employment, based on an employee's actual or perceived status as a member of a protected class.  The NYCHRL defines several protected classes, including, but not limited to, "age," "race," "gender," "sexual orientation," "partnership status," "national origin" and "disability."  

The newly passed bill adds "caregiver" as a protected class, thereby prohibiting employment discrimination based on an individual's actual or perceived status as a caregiver.  The amended NYCHRL defines "caregiver" as anyone who provides direct and ongoing care for a child under the age of 18 or for a care recipient.  A "care recipient" is defined as an individual with a disability who:

(1)   Is a covered relative or a person who resides in the caregiver's household, and

(2)   Relies on the caregiver for medical care or to meet the needs of daily living.

The amended NYCHRL further defines "covered relative" as a caregiver's child, spouse, domestic partner, parent, sibling, grandchild, grandparent, child or parent of the caregiver's spouse or domestic partner or any other individual in a familial relationship with the caregiver.

The legislation will take effect 120 days after enactment, although the City Commission on Human Rights is authorized to take any action necessary, prior to the effective date, to implement the amended law.

What This Means To You

New York City employers covered by the NYCHRL should review and update their policies and procedures. Covered employers should also update their training materials for employees, managers and supervisors.


New York

Beginning December 31, 2015, the minimum hourly wage rate for employees in New York State will increase from $8.75 per hour to $9.00 per hour. 

Moreover, the minimum salary amounts that must be paid to New York employees who are exempt from New York's overtime requirements as administrative or executive employees will increase from $656.25 per week to $675.00 per week on December 31, 2015.

Employers should be aware that the New York State minimum wage exceeds the federal minimum wage.  Thus, although an employee's hourly wages may comply with federal law, such wages may not comply with New York law.

Similarly, an employee paid a salary between the federal minimum of $455 per week and the New York minimum of $675.00 per week may qualify as "exempt" from overtime under federal law, yet may not qualify for the same exemption under New York law.  In such circumstances, the employee is entitled to overtime and must be paid at a rate of at least one and one-half times the minimum hourly rate of $9.00 per hour for any hours worked in excess of 40 per week.

New Jersey

New Jersey's minimum wage will remain $8.38 an hour in 2016.  The wage has been tied to the consumer price index for all urban wage earners and clerical workers since January 2014.  The New Jersey Department of Labor and Workforce Development, Division of Economic and Demographic Research (DOL) recently announced that there was no increase to the consumer price index in the past year and therefore the state's minimum wage will remain unchanged for 2016.

What This Means To You

Employers should review the compensation paid to their employees in New York to ensure compliance with the new minimum wage and salary obligations and should take the following steps:

(1)   Confirm the necessary payroll adjustments have been made and that they are in compliance with the new minimum wage laws

(2)   Update their minimum wage posters at the workplace 

(3)   Ensure that their employees who are classified as "exempt" under the administrative or executive exemptions are being paid a salary of at least $675.00 per week in order to avoid violation of New York State's overtime laws

Special thanks to Daniella M. Muller, an associate in the Employment Practice Group, for her assistance preparing this alert.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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