By Mark Goldstein and Alexandra Manfredi

Law360 (December 1, 2020, 1:15 PM EST) --

Mark Goldstein

Alexandra Manfredi

The labor and employment law landscape in New York — and, more broadly, life in general — underwent significant changes in 2020. The majority of these changes centered on workplace-related regulations promulgated in response to the COVID-19 pandemic.

And beyond this, New York state and city lawmakers and jurists focused on issues such as paid sick and safe leave, the reach of anti-discrimination statutes, joint employment standards, and pay for tipped workers.

In this article, we will discuss these developments in New York labor and employment law, the impact of which will continue to be felt in 2021.

Sweeping COVID-19 Regulations

Beginning in March, New York state promulgated a broad host of requirements with which all employers — both large and small — were required to comply. In many instances, these requirements remain. These rules, issued largely through gubernatorial executive orders, had a significant impact on the employment law landscape this year and will almost certainly continue to do so in 2021.

Essential Business Designations

As New York began rolling out COVID-19 regulations in March, it quickly distinguished between essential and nonessential businesses. Essential businesses were, among other things, generally permitted to remain open notwithstanding the state's stay-at-home orders.

To assist employers in determining whether they were essential, the Empire State Development published a detailed list of criteria delineating what constitutes an essential business, and even permitted employers to request a determination on this issue.

Paid Sick Leave for Quarantined Employees

In late March, New York enacted COVID-19-related paid sick leave regulations. Under the regulations, employees subject to a mandatory or precautionary order of quarantine or isolation are entitled to paid sick leave of up to 14 days — depending on employer size and net income. This leave is not available, however, to employees returning to the U.S. after voluntary travel to a level 2 or 3 country — as designated by the Centers for Disease Control and Prevention — or to employees who voluntarily travel to restricted states, as discussed below.

Mandatory Face Coverings

On April 12, Gov. Andrew Cuomo issued an executive order requiring all essential businesses to provide employees with face coverings to be worn when in direct contact with customers or members of the public. Guidance on the executive order makes clear that employers must furnish such face coverings to employees free of charge.

New York Forward

In May, New York introduced its New York Forward initiative, which included comprehensive reopening guidance based on a regional, four-phase approach. This guidance, which included industry-specific guidelines promulgated for each of the four phases, outlined both required and recommended measures for employers to take when conducting in-person operations. These guidelines have been, and continue to be, updated since their initial issuance in May.

Mandatory Business Safety Plan

As of May, every business within the Empire State — even those deemed essential — is required to develop a written reopening plan to protect employees and consumers, make the physical workspace safer, and implement processes that lower the risk of infection in the business — e.g., screening protocols, hygiene and cleaning, protective equipment, and contact tracing. The plan must be physically posted on-site and also made available upon request by the New York State Department of Health or local authorities.

Daily Employee Screenings

As part of its phased reopening, effective May 20, New York began requiring employers to screen employees for COVID-19 symptoms and exposure before the employee entered the workplace each day. The screenings include gathering data on: (1) COVID-19 symptoms in the past 14 days; (2) positive COVID-19 tests in the past 14 days; and (3) close contact with a confirmed or suspected COVID-19 case in the past 14 days.

Employers are required to maintain records of the daily screening, but are prohibited from recording employee temperatures — however, they may record whether the employee passed or failed the screen.

Guidance on Returning to Work Following COVID-19 Infection or Exposure

On May 31, the New York State Department of Health issued interim guidance on employees returning to work following COVID-19 infection or exposure. The guidance sets forth recommended isolation and return-to-work time frames based upon confirmed cases, exposure and the presence of COVID-19 symptoms or lack thereof.

Travel Advisories

On June 24, Cuomo issued an executive order requiring individuals returning to New York from restricted states — i.e., states that met certain COVID-19 transmission levels — to quarantine for a period of 14 days upon return. Essential workers, however, are exempt from these requirements. This travel advisory was updated on Nov. 4 to allow out-of-state travelers to test out of the 14-day quarantine.

Employers should, as we head to year-end, conduct an ongoing review of their safety-related policies and protocols. All Empire State employers — both big and small — will want to ensure, for instance, that they have complied in full with the state's COVID-19-related rules and regulations.

In particular, employers should ensure that, to the extent they have returned or are contemplating returning to in-person operations, they have adopted a written safety plan and developed a daily screening process, including a questionnaire, for the workplace. It is likewise critical to ensure that employees receive any COVID-19-triggered leaves of absence to which they may be entitled.

Enactment of New York State Paid Sick Leave

On Sept. 30, New York's statewide paid sick leave law took effect. The paid sick leave law provides potentially up to 56 hours of paid time off for certain qualifying reasons, with an employee's specific entitlement varying based on employer size and net income. Employees may begin using paid sick leave on Jan. 1, 2021. The pertinent aspects of the law are as follows:

• Paid sick leave may be used (1) to care for an employee or employee's family member's mental or physical illness/condition; (2) for the diagnosis, care or treatment of an employee's or employee's family member's mental or physical illness, condition, injury or for preventative care; or (3) for certain safe time reasons when an employee or a family member has been a victim of domestic violence, a family offense, sexual offense, stalking or human trafficking.

• Paid sick leave accrues at the rate of one hour for every 30 hours worked — however, employers may choose to instead frontload the maximum amount of leave at the beginning of a calendar year.

• Employees may request a summary of the amounts of sick leave accrued and used, and such information must be provided within three days of the request. In addition, all employers must retain records, for a minimum of six years, documenting the amount of paid sick leave provided to each employee.

• Employees may carry over accrued but unused sick leave to the following year. However, employers may limit the use of sick leave in a given year to 40 or 56 hours, depending on employer size.

Amendment to New York City Safe and Sick Leave Law

In response to the New York paid sick leave law taking effect, the New York City Council in September amended the Big Apple's own paid safe and sick leave law — known as the Earned Safe and Sick Time Act, or ESSTA — to more closely align with the statewide regulation. The critical aspects of this amendment are as follows:

• ESSTA now applies to all individuals employed within the city, regardless of the number of hours worked. Previously, it applied only to those who worked more than 80 hours in a calendar year.

• Domestic workers are now eligible for up to 40 hours of paid leave.

• Employees may use ESSTA as it is accrued — i.e., they no longer need to wait 120 days after their start date.

• Employers are required to provide written notice of the updated ESSTA to new hires at the commencement of employment, and to post it conspicuously in the workplace.

• Employers must now include the following information on an employee pay stubs or other form of written documentation for each pay period: (1) the amount of leave accrued and used during the applicable pay period and (2) the total accrued leave balance.

Employers should continue to monitor the state and city sick leave websites for any updated guidance or regulatory developments, and immediately provide written notice of the updated ESSTA to existing employees, if they have not already done so.

Continued Expansion of Rights Under the New York State and City Human Rights Laws

In 2019, legislators expanded a variety of anti-discrimination provisions under state and city law. This continued in 2020 with a few critical expansions:

• Effective Jan. 11, the New York City Human Rights Law now provides independent contractors with the same anti-discrimination protections as traditional employees. Guidance issued by the city underscores that independent contractors may, among other things, now request and receive reasonable accommodations for needs related to disability, pregnancy, lactation, religious observances, and status as victims of domestic violence, sexual offenses or stalking.

• As of Feb. 8, the New York State Human Rights Law now covers all businesses operating within the state. Previously, it covered only employers with four or more employees.

• New York City's ban on preemployment marijuana and THC testing went into effect on May 10. This law makes it unlawful to test prospective employees for the presence of marijuana or THC as a condition of employment, unless certain exceptions apply.

The state's and city's respective changes to paid sick leave regulations and anti-discrimination laws make this an ideal time to conduct a comprehensive review of all personnel policies — or, at a minimum, policies related to equal employment practices and paid time off. This is particularly true for multijurisdictional employers, who need to comply with a patchwork of state and local laws.

Judicial Reticence as to the DOL's Joint Employer Rule

In early 2020, the U.S. Department of Labor issued an administrative rule updating its interpretation of the joint employer doctrine under the Fair Labor Standards Act.

This rule simplified the joint employer analysis by adopting a four-factor test to determine whether workers are jointly employed by separate, but often related, businesses or persons. In essence, the new rule confirmed that a joint employer must actually exercise, directly or indirectly, some form of control or direction over the employee.

The rule was quickly challenged by several states in a lawsuit in the U.S. District Court for the Southern District of New York. Ultimately, on Sept. 8, U.S. District Judge Gregory Woods issued a 62-page decision striking down the portion of the DOL's rule applying to vertical joint employment relationships — i.e., situations where an

employee has an employment relationship with one employer (typically a staffing agency, subcontractor, labor provider, or other intermediary employer) and the economic realities show that he or she is economically dependent on, and thus employed by, another entity involved in the work.

In doing so, Judge Woods concluded that the rule violated the Administrative Procedure Act, improperly revised the FLSA's long-recognized definition of "employer," applied the test differently to primary and joint employers, and failed to justify why its benefits outweigh the costs to workers, including the inability to collect back wages.

Nevertheless, Judge Woods severed from the final rule and let stand the portion of the rule applying to a horizontal joint employment relationship, which "exists where the employee has employment relationships with two or more employers and the employers are sufficiently associated ... with respect to the employee [so] that they jointly employ the employee." According to the court, this was appropriate because the rule "makes only 'non-substantive revisions' to existing law for horizontal joint employer liability."

Judge Woods' ruling presents an important opportunity for companies to review current relationships with workers whom they do not directly employ but from whom they receive some type of beneficial service. In particular, businesses that engage third parties to provide staffing services should evaluate those arrangements for potential joint employer liability.

Elimination of Tip Credit for Miscellaneous Industries

Finally, New York is eliminating the tip credit — the mechanism that, very broadly speaking, allows employers to pay tipped employees less than the minimum wage — outside of the hospitality industry. The tip credit was reduced by 50% as of June 30, and will be eliminated altogether as of Dec. 31, for nonhospitality industry business (e.g., car wash attendants, nail salon workers, tow truck drivers, dog groomers, wedding planners, tour guides, valet parking attendants, hairdressers, aestheticians, golf and tennis instructors, and building doorpersons).

By its very nature, this change will increase the cost of doing business for any businesses who had previously relied on taking the tip credit for certain employees. The result of this change, therefore, may be reductions in hours or personnel, or other cost-saving measures, across a slew of New York industries in the coming months.

Final Thoughts

Well, it was not quite the year any of us expected. And that includes with respect to the employment law landscape in New York. So how can your business tackle the issues raised above?

To reiterate the guidance above, first and foremost, employers should, as we head to year-end, conduct an ongoing review of their safety-related policies and protocols. Second, employers should conduct a comprehensive review of all personnel policies in light of the state's and city's respective changes to paid sick leave regulations and anti-discrimination laws,

Given the state and city legislatures' continued focus on labor and employment laws in 2020, it is likely that even more laws and revisions to existing laws will be introduced in 2021 — potentially even with respect to the standard for classifying independent contractors, as California did in 2019. And as the COVID-19 pandemic continues into 2021, New York's related regulations will likely remain in place and be updated as the pandemic evolves, including once a vaccine is available.

So, what's the big takeaway? Stay vigilant and abreast of the ever-changing employment law landscape, perhaps more so now than ever.

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Mark S. Goldstein is a partner and Alexandra C. Manfredi is an associate at Reed Smith LLP.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

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