In this podcast, Diana Nehro (shareholder, New York/Boston) sits down with Jamie Haar (of counsel, New York) to discuss the New York City Department of Consumer and Worker Protection’s (DCWP) rigorous enforcement of the Earned Safe and Sick Leave Law and the Fair Workweek Law. Jamie and Diana provide an overview of these laws, including their requirements, compliance challenges, and the significant penalties for violations. Diana and Jamie also offer best practices for employers to mitigate risks and discuss the DCWP’s audit and investigatory processes.
Transcript
Announcer: Welcome to the Ogletree Deakins podcast, where we provide listeners with brief discussions about important workplace legal issues. Our podcasts are for informational purposes only and should not be construed as legal advice. You can subscribe through your favorite podcast service. Please consider rating this podcast so we can get your feedback and improve our programs. Please enjoy the podcast.
Diana Nehro: Hello everyone and thank you so much for joining us
for another amazing Ogletree Deakins podcast. My name is Diana
Nehro, and I am the Chair of the Cross-Border practice here at
Ogletree Deakins. I’m very lucky to be joined today by my
amazing colleague, Jamie Haar, who is of counsel in our New York
City office. Today, I say we, but it’s not really we.
It’s Jamie who’s going to be talking about the New York
City Department of Consumer and Worker Protection’s
aggressive approach to investigating purported violations of the
New York City Earned Safe and Sick Leave law, as well as the Fair
Workweek law.
As Jamie will tell you, the DCWP is the agency charged with
enforcing these laws, and they’ve become quite aggressive.
While these laws have been on the books for many, many years,
compliance continues to present many challenges for employers,
particularly multi-state employers, both from an administrative and
operational perspective. In addition, Jamie will discuss the DCWP
audit and investigatory process, as well as potential exposure,
including very hefty penalties, fines, and employee relief. All
right, well, with all that intro behind us, Jamie, tell me about
this. Give me an overview of these two laws and what we need to
know about them.
Jamie Haar: Sure. Let’s start with the Earned Safe and
Sick Leave law. So, originally passed in 2014, with several key
amendments thereafter, the Earned Safe and Sick Leave law requires
most employers operating in New York City to provide safe and sick
leave to employees working in New York City for the care and
treatment of themselves or a family member for a mental or physical
illness, injury or health condition, need for medical diagnosis,
care or treatment or need for preventive care. So, this would
include doctor’s appointments or a procedure that needs to
get done in the afternoon, things like that, to seek legal and
social services assistance or take other safety measures if the
employee or a family member may be the victim of any act or threat
of domestic violence or unwanted sexual contact, stalking or human
trafficking.
Leave is also permitted when the business is closed due to a public
health emergency or due to the need to care for a child whose
school or child care provider is closed due to a public health
emergency. And so most employees are covered, including exempt,
non-exempt, part-time, temporary, and seasonal workers. So,
oftentimes there are certain times during the year that an employer
may hire seasonal workers, and they’re there for a short
period of time, and a lot of employers think, okay, well,
they’re not entitled to leave or PTO or other benefits, but
that’s actually not the case. This law does cover those
workers in addition to the part-time temporary workers.
Diana Nehro: Wow, that is quite a bit of protection. How much leave are employees eligible for?
Jamie Haar: The amount of safe and sick leave is dependent on
employer size. Employers with 100 or more employees must provide up
to 56 hours of paid leave each calendar year. Employers with five
to 99 employees must provide up to 40 hours of paid leave each
calendar year. Employers with four or fewer employees and a net
income of 1 million or more must provide up to 40 hours of paid
leave. And if the net income is less than 1 million, then employees
are eligible for 40 hours of unpaid leave each calendar year.
Under the law, employees can either accrue the leave at the start
of their employment at a rate of one hour for every 30 hours
worked. There is no waiting period, and new employees may begin
using leave as it is accrued. A lot of employers don’t know
this. A lot of policies, they wait, there’s a probationary
period of 90 days, and then you’re allowed to use your leave.
Well, that’s not the case in New York City. There is no
waiting period, and they start accruing and can use any of the
accrued leave immediately. In the alternative, employers may
frontload safe and sick leave at the beginning of the calendar
year.
Diana Nehro: Year. Wow, okay. That’s quite a bit of protection and quite a bit of leave. Other than providing for safe and sick leave. Does the law have any other requirements?
Jamie Haar: Yes. So, the law has rigorous notice, posting and
record keeping requirements. The DCWP has published a model notice
called the Notice of Employee Rights, which is available on its
website and has been translated into several languages. Not only
does this notice need to be physically posted conspicuously at the
job site, but each employee must receive a copy of the notice at
the start of employment. This is often where the DCWP will ping
employers. A lot of times they’ll just post it, and
that’s it, but you need to also physically give them a copy
of the notice, either electronically, in person or otherwise, but
they need to receive it as well as it being posted at the
site.
And the law also requires that employers maintain in a single
writing and distribute a safe and sick leave policy that meets or
exceeds the requirements provided by the law. Again, this is
another thing that the DCWP will ping employers for. A lot of times
employers have a general PTO policy, and it says things unless
otherwise permitted under applicable law, prohibited under
applicable law. So, oftentimes we need to make carve-outs for this
law because the DCWP does have minimum standards or minimum
requirements that are required to be included in the policy. So,
something to keep in mind.
Diana Nehro: So, when that happens, and an employer’s policy is perhaps less generous, do you suggest an addendum? How do you suggest addressing that for the New York employees, for a multi-state employer?
Jamie Haar: More often than not, I am always recommending a New York addendum. It just, it’s a best practice. You have it. And also, so many states now have their own sick and safe leave laws that have very different requirements, different policy requirements, et cetera. And so, for a multi-state employer, it’s going to be very difficult to have one policy that is going to be in compliance with all the different laws. And so, we typically recommend, at least in New York, addendum and then for other states as well.
Diana Nehro: That makes a ton of sense. And so what are other aspects of this law that you haven’t covered yet, before we switch gears?
Jamie Haar: Sure. So typically, if an employee took a day off, you would come back to work the next day, and your employer would ask for a doctor’s note. Well, that is not allowed under the Safe and Sick Leave law. Employers can require documentation, for example, a doctor’s note, but only when employees use safe and sick leave for more than three consecutive workdays. And again, if the documentation requirement is explained in the employer’s written policy.
Diana Nehro: That’s amazing. This is starting to sound more like the work that we do outside the United States, in much more protective jurisdictions. It sounds like places like New York and New York City are starting to catch up with the Latin Americas and the EMEAs of the world with it, because that’s a very similar system there as well. That’s really interesting. Anything else about information that the employers have to provide?
Jamie Haar: Yes. So, employers must inform employees of their accrued, used, and total leave balances on a pay stub or through an employee accessible electronic system. And of course, employees may not be retaliated against for exercising their rights under the law.
Diana Nehro: Wow, that is amazing. Thank you so much for sharing that. I had no idea, and it really is quite impactful for employers. Okay. Why don’t you tell us a little bit more about the Fair Workweek Law? Let’s switch gears.
Jamie Haar: Sure. So, if you thought there were a lot of requirements for Earned Safe and Sick Leave Law, just wait as I outline all the requirements for the Fair Workweek Law. Passed in 2017 with amendments thereafter, the New York City Fair Workweek laws impose significant constraints and obligations on fast food and retail employers operating in New York City by imposing restrictions that aim to ensure predictable paychecks and work schedules. The laws include strict notice and record-keeping requirements and set forth methods of enforcement, premium pay requirements, penalties, damages, and fines for failure to comply. This is so important because more and more jurisdictions are passing these Fair Workweek laws, and so it’s not really unique to New York City. It’s something that employers need to be aware of generally, especially if you’re a multi-state employer.
Diana Nehro: So, does that mean that all retail and fast food employers are covered under this law?
Jamie Haar: No. The law and FAQs define which employers are considered a retail employer and a fast food employer. So, a retail employer is a retail business that primarily sells consumer goods to the public at one or more stores in New York City and employs 20 or more workers in New York City. So, if you have a boutique that employs five people, they are not going to be covered. But if you have several locations, and you employ 100 people, you are certainly going to be covered. Covered fast food employers are establishments located in New York City that are part of a chain, primarily serve food and beverages, offer limited service, and are one of 30 or more establishments nationally. And I’ll note that franchises are counted as part of the 30-establishment minimum. Even if the company doesn’t own or operate a location, and it’s run by a franchisee, they are still counted as part of the 30-establishment minimum.
Diana Nehro: That is so interesting, and you may not know the answer to this, but does that mean that when you have a franchising model, does the employer have any obligation to tell its franchisees about this information, or is that just something that they’re responsible for themselves? It’s okay if you don’t know, I’m just curious.
Jamie Haar: Yeah, I think in the FAQs, that does provide for when there’s a joint employer situation or when, yeah, absolutely. Certainly, joint employer comes into play, whether they’re jointly liable for violations, whether there’s any indemnification that may be owed. So, I think it’s really going to depend on the contract relationship. But certainly, yes, if they’re an employer in New York City, and they’re covered under one of these laws, they need to be compliant.
Diana Nehro: Wow. That is so interesting. Okay. Well, as I get older and older, I try to eat less fast food, but I don’t try to do less retail therapy. So, tell me a little bit more about retail.
Jamie Haar: Sure. So, under the law, retail employers are to provide 72 hours advanced notice of work schedules to employees. Employers cannot schedule on-call shifts, no call-in shifts within 72 hours of the shift, no shift cancellations with less than 72 hours notice, no shift additions with less than 72 hours notice unless the worker consents in writing. So that would be a situation in which they’re supposed to clock out at 5:00, but given that there were so many customers that day, they need someone to stay late. So that would be an example of a shift addition. And again, you would have to get the workers’ consent in writing. Additionally, if a schedule is updated or if changes need to be made, that schedule needs to be updated and reposted and recirculated or redistributed to the employees. Employers may make changes to schedules with less than 72 hours notice, including to grant an employee time off pursuant to an employee’s request, to allow two employees to trade shifts, or if the employer’s operations cannot begin due to threats to employees or to the property, public utility failure, a fire or state of emergency.
Diana Nehro: So that sounds like those three examples are really the exception, not the rule to this 72-hour notice requirement?
Jamie Haar: Correct. And employers should know you can make changes as long as it’s outside that 72-hour window. So, if you’re giving notice a week in advance, you can make those changes without being in violation of the law. It’s just-
Diana Nehro: No, it’s just when get in with that 72-hour window and then these three examples that you just gave where you can do less than 72 hours, those are exceptions and not the norm, so to speak.
Jamie Haar: Right. Exactly.
Diana Nehro: So, are all retail employees covered? How does that work?
Jamie Haar: No. So, if employees are covered by a collective bargaining agreement in which the rights under the laws are expressly waived and scheduling is addressed, those employees will not be covered. In addition, employees who work at a corporate office and not in a retail store are not covered. So, it’s only the folks that are actually working physically at the store, not employees who work at corporate or elsewhere. It’s only the people working at the retail store. And I will note that the supervisors and managers that work in a retail store are also covered by the law. It’s not just rank-and-file employees or non-exempt employees. It also can include exempt supervisors and managers.
Diana Nehro: Okay. I take it back. I still am craving fast food. So, I need you to go back to that topic for a second. Tell me more about the requirements for covered fast food employers.
Jamie Haar: Sure. And I’m with you, Diana.
Diana Nehro: I pretend to be virtuous, but I’m not. No matter how old I get, I’m still going to want french fries and shakes and various things like that.
Jamie Haar: Yeah, absolutely. So, employees that are performing the following job duties are covered by the law, customer service, cooking, food or drink preparation, delivery, security, stocking supplies or equipment, cleaning or routine maintenance. So, I’ll note that salaried workers who are exempt from the overtime requirements are not covered under this law. So that’s one of the key differences between retail and fast food is that salaried workers are not covered under the fast food requirements, but they are under the retail requirements.
Diana Nehro: Okay. And then just going back to fast food for a second, tell me more about those requirements for fast food employers that are covered.
Jamie Haar: Sure. So, there are several requirements that fast
food employers need to be aware of. At the time of hire, fast food
employers are required to provide new employees a written, regular
schedule, which is a predictable, regular set of recurring
schedules that include the days, times, locations, and total number
of hours the employee can expect to work each week. And rather than
the 72 hours notice that is required for retail employers. Fast
food employers are required to provide 14 days notice or two weeks
advance notice of work schedules.
Employers are required to pay employees premium pay for all
schedule changes with less than 14 days notice, of course, with
certain exceptions, including changes due to threats to employees
or property, natural disasters, voluntary changes or shift swaps or
where overtime pay is otherwise required. Fast food employers are
required to obtain written consent plus a $100 premium to work
clopening shifts, which is defined as two shifts with fewer than 11
hours between the end of the first shift and the beginning of the
second shift. So that would be a situation where an employee is
closing and then opening the next day. So that would be fewer than
11 hours between shifts. They would get $100 premium for that.
Diana Nehro: Got it.
Jamie Haar: In addition, as of 2021, after a 30-day probationary period, fast food employees may not be terminated or have their hours substantially reduced unless the employer has just cause. In other words, fast food workers are not employed at will. There are other requirements including the processes and procedures employers are to follow before they can hire new employees, how to advertise new or open shifts, and process to terminate employees and, of course, anti-retaliation provisions.
Diana Nehro: Wow. These are really robust requirements, and it doesn’t surprise me at all that employers continue to face challenges in coming into compliance with these laws. So, what happens if the DCWP wants to investigate an employer’s compliance with Safe and Sick Leave and the Fair Workweek laws?
Jamie Haar: Well, I’ll say it depends. Sometimes the DCWP investigates specific allegations as to a single employee. Other times, the DCWP seeks to conduct an extensive audit of an employer’s practices, policies and procedures, either at a single location or multiple locations. So depending on the scope of the investigation, categories of documents the DCWP may request are payroll records, clock in and out records, list of employees, past and present, along with their contact information, applicable policies and notices, onboarding documents, trainings, sick leave balances, requests for sick leave, past schedules, schedule changes. You see where I’m going with this? It’s very record intensive.
Diana Nehro: Absolutely.
Jamie Haar: And I’ll note, unfortunately, an employer’s failure to maintain or produce records to the DCWP may result in a rebuttable presumption against the employer in the event of a lawsuit or enforcement action. So, this means that the burden will be on the employer to show that the employer did not violate the law.
Diana Nehro: And I’m sure it’s in the FAQ, so if you don’t know the answer, no worries. But is there a retention period that you have to comply with? That’s a ton of information to have to hold onto. I’m just curious how many years you look back on that, or is that in the FAQs?
Jamie Haar: Yes. So, there’s a three-year requirement. You need to keep records for three years.
Diana Nehro: Wow. So, if the DCWP does conduct an investigation, finds some violations, what’s the potential exposure there?
Jamie Haar: Retail and fast food workers may be entitled to monetary relief for an employer’s violations. The monetary relief can range from 300 to $500 per instance basis, per affected worker. Now 300 or $500 doesn’t sound like a lot, but it’s per affected worker, per instant basis, so that can add up pretty quickly. And employees whose hours were cut or who were terminated in retaliation for asserting their protected rights may be entitled to back pay or reinstate them. In addition, and as I mentioned as it pertains to sick leave, the DCWP can issue penalties and fines payable to the city for violations of the law, which can range from $500 to $11,000. And as to the employee relief, it could be double what the employee ultimately is entitled to, in terms of relief, back pay, all of those buckets of potential relief.
Diana Nehro: Wow.
Jamie Haar: To the extent an employer is a repeat offender, the penalties and fines may be higher. Depending on the number of employees and violations together with a three-year look-back period, employers can face a substantial amount of exposure, including in the six and seven figures.
Diana Nehro: Oh my goodness. That is quite a bit of exposure. Wow. So, given that, what are some best practices that you recommend employers to consider to try to get in front of this exposure?
Jamie Haar: Absolutely. So employers may want to analyze current
practices, including their scheduling practices, payroll practices,
paid time off practices, and disciplinary policies. Remember, under
the Fair Workweek law, as to fast food employees, you can’t
terminate someone unless it’s just cause after that 30-day
probationary period. So, you want to look at your progressive
discipline policies as well. You want to train all employees,
managers, supervisors, payroll personnel, and leave administrators
involved in hiring, scheduling, and overseeing time off. And
I’m not talking about the people in the corporate office or
the district managers that are covering five or 10 different
locations. I’m talking about the people who are boots on the
ground, that are there working with these employees on a regular
basis. They need to be trained. You’ll want to develop more
record keeping or records that will capture voluntary requests for
changes. So, we like to call it a change in shift request
form.
It should include a disclaimer that the request for a shift change
was voluntary and at the employee’s request and free from
coercion. So, if you have these forms and the DCWP sees that an
employee’s shift was cut, it’s not a shift reduction,
it is the employee requested that they be allowed to leave early or
they switch shifts with someone. So, you definitely want to have
those forms in place so you can be memorializing when there’s
voluntary shift changes, you’ll definitely want to develop or
update time off or leave policies, develop detailed procedures for
awarding additional shifts and posting schedules, request to change
shifts, documenting consent to changes, and a complaint reporting
procedure. We’ve talked a lot about record keeping, so
you’re going to want to review your record-keeping policies
to ensure that records are being preserved and you’ll want to
assess third-party platforms or apps that assist with labor and
scheduling management, as well as have built-in compliance
capabilities. A lot of companies now are using these third-party
applications that have really helped in terms of compliance
efforts.
Diana Nehro: Yeah, that’s a great idea. And it sounds like it’s a starting point. Based on what you’re recommending, it’s almost as though if you aren’t using one of these apps yet, the best place to start is to do an audit and look at where you are and figure out where your deficiencies are, where you need to make up for it. It sounds like that’s the starting place and that you can go from there.
Jamie Haar: Absolutely.
Diana Nehro: That is super helpful. Wow, I am so lucky to have you as a colleague because now I know who to go to anytime I have a question about this. This is unbelievable, your breadth of knowledge. So, thank you so much for taking the time to talk to me today, and thank you all so much for listening to the amazing Jamie Haar as she talked us through these issues. And thanks for listening to the Ogletree podcast. We really appreciate it. Have a good one.
Announcer: Thank you for joining us on the Ogletree Deakins podcast. You can subscribe to our podcast on Apple Podcasts or through your favorite podcast service. Please consider rating and reviewing so that we may continue to provide the content that covers your needs. And remember, the information in this podcast is for informational purposes only and is not to be construed as legal advice.
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.
