With a recent spate of laws expanding workplace rights in New York City and New York State, union- and plaintiff-side lawyers have acquired powerful new tools with which to protect their clients’ interests. These laws have been enacted by legislative and executive bodies dominated by the State Democratic Party and its resurgent progressive wing, which have sought to mandate wide-ranging workplace protections previously unavailable under federal, state or local laws.
While any one of the changes discussed below would be a significant development in workplace jurisprudence, taken together, they represent a meaningful trend toward strengthened labor and employment standards in the City and State. They also both mirror and predict a wave of similar enactments in state legislatures and city councils around the country.
Expanding “Public Works Projects” Subject to Prevailing Wage and Benefit Laws
Since its inception in 1890, New York State’s prevailing wage and benefit laws—enshrined in Labor Law § 220 and Article 1, § 17 of the New York State Constitution—have mandated that workers be paid the prevailing rate of wages and supplements on “public works construction projects.” That rate has been defined generally as union-scale wages and fringe benefits determined by the fiscal officer of each New York County and New York City.
The definition of “public works construction project,” however, has long been in dispute. For years, organized labor has called for a legislative expansion of that term, most recently in response to court decisions narrowing its scope. Under New York Senate Bill S7508B1 which was passed on April 3, 2020, and took effect on January 1, 2022, Labor Law § 220’s prevailing wage and benefit requirement was revised to apply to a wide array of private construction projects paid for, at least in part, with public funds.
Under the amended law, the definition of covered projects includes “construction work done under contract which is paid for in whole or in part out of public funds where the amount of all such public funds, when aggregated, is at least thirty percent of the total construction project costs” and where such project costs exceed $5 million. Moreover, the law’s definition of “public funds” goes far beyond direct public investment, to include indirect subsidies, like savings from tax credits, abatements and exemptions, loans and grants from public entities, savings from below-market loan interest, and payments from third parties acting on behalf of public entities.
With these changes, New York State’s prevailing wage and benefit requirements will now reach contractors, subcontractors, owners and developers who perform construction work on both public projects and publicly-subsidized private projects. As a result, the types and number of employees in the State who are entitled to be paid prevailing wages and benefits will be greatly increased, and those employees, in turn, will enjoy improved income, purchasing power, health benefits and retirement security.
Expanding Whistleblower Protections for Private-Sector Employees
With the passage of Senate Bill S4394A2 on October 28, 2021, New York State has markedly expanded protections for private-sector whistleblowers under Labor Law Section 740. Prior to the amendment, the law prohibited retaliation only against employees who had complained of practices that constituted a “substantial and specific danger to the public health or safety” or “health care fraud.”
Effective January 26, 2022, the law prohibits private-sector employers from retaliating against employees, former employees and independent contractors for disclosing or threatening to disclose, to a supervisor or a public body, any conduct that they reasonably believe violates any law, rule or regulation, executive order, or judicial or administrative decision, ruling, or order; or that they reasonably believe constitutes a substantial and specific danger to the public health or safety. The law also broadens the definition of “adverse action” to include acts that would “adversely impact a former employee’s current or future employment,” including reporting the immigration status of employees or their family members. In addition, it extends the statute of limitations for filing a whistleblower retaliation claim from one to two years, entitles aggrieved plaintiffs to jury trials, and expands remedies available to prevailing plaintiffs to include injunctive relief, reinstatement, front pay in lieu of reinstatement, back pay, compensatory damages, punitive damages, and civil penalties not to exceed $10,000. Although the amendment does not include a “bounty” provision, it surely will encourage covered individuals to “blow the whistle,” and, in turn, spawn a robust whistleblower plaintiff and defense bar.
Requiring “Labor Peace” Agreements for City Human Services Contracts
On August 18, 2021, the New York City Council passed a law requiring contractors and subcontractors to enter into “labor peace” agreements with labor organizations as a condition of obtaining an award or renewal of a human services contract with a City agency.3 Under the new law, effective November 16, 2021, covered employers must submit, along with their contract bids or renewal requests, certifications that they have complied with the law. Human services contracts are broadly defined to include contracts for day care, foster care, health or medical services, preventive and youth services, operation of senior centers, employment training and assistance, housing and shelter assistance, vocational and educational programs, legal services and recreation programs.
The law defines a “labor peace” agreement as one between a covered employer and a labor organization seeking to represent employees performing a human services contract, in which the parties promise to provide uninterrupted delivery of contract services, and refrain from strikes, lockouts and other actions that would interrupt those services. In such agreements, employers typically pledge to maintain neutrality in union organizing campaigns and forego certain rights afforded them by the National Labor Relations Act. In supporting the new law, City Council President Corey Johnson explained that such agreements “can be helpful to worker organizing” because employers essentially agree “not to hinder or disrupt the organizing process.” 4 It is expected that the new law will encourage union organizing in the human services sector, and improve wages and working conditions for covered employees.
Requiring Salary Ranges on Job, Promotion and Transfer Postings
Under a law passed by the New York City Council on December 15, 2021, and made effective April 14, 2022,5 it will be an unlawful discriminatory practice for New York City employers with four or more employees to post an “advertised job, promotion or transfer opportunity” without including the minimum and maximum starting salary for that position. The law applies to both private- and public-sector employers, and states that the salary range “may extend from the lowest to the highest salary the employer in good faith believes at the time of the posting it would pay for the advertised job, promotion or transfer opportunity.”
With the law’s passage, New York City joins the growing ranks of cities and states that have passed legislation to end salary secrecy, which has been found to disproportionately affect women and workers of color, and to lead to wage gaps for those populations. Colorado recently passed a law with salary range reporting requirements similar to New York City’s.6 Several other states, including Maryland, Washington State, California, Nevada, Connecticut and Rhode Island, variously require employers to provide salary range information to applicants upon their request, after an interview, or when an offer is made.7 In addition, twenty states and the District of Columbia offer legal protections for workers who discuss their salaries, and similar bills are under consideration in states and cities across the country.
Imposing Anti-Bias Restrictions on AI Tools for Hiring and Promotion
Under a New York City law passed on November 10, 2021, and set to go into effect on January 1, 2023,8 restrictions will be placed on employers’ use of artificial intelligence (“AI”) machine-learning products in hiring and promotion decisions. The law regulates employers’ use of “automated employment decision tools,” broadly defined as “any computational process, derived from machine learning, statistical modeling, data analytics, or artificial intelligence . . . that is used to substantially assist or replace discretionary decision making for making employment decisions that impact natural persons.” Addressing growing concern that automated decision-making tools are laden with unintended biases that lead to discriminatory outcomes based on protected characteristics like race, age, religion, sex and natural origin,9 the law will prohibit the use of such tools to screen a candidate for employment or promotion unless the tool has been subjected to a “bias audit”—an impartial evaluation by an independent auditor—no more than one year prior to its use.
The legislation builds on laws passed in other states, such as the Illinois Artificial Intelligence Video Interview Act, which imposes notification and consent requirements on employers that use AI technology in the job interview process.10 Legislators in several other states have introduced similar bills, and more legislation is likely in the near future, as employers rely increasingly on AI technology to select their workforces.
Mandating Labor-Management Safety Committees at Private Sector Workplaces
Section 2 of the NY HERO Act,11 which amends Section 27-D of the State’s Labor Law, requires all private employers with at least 10 employees (whether unionized or not) to allow their employees to establish joint employer-employee committees tasked with raising workplace health and safety issues and evaluating related employer practices. The statute, which is one of a slew of state and local laws passed in response to the COVID-19 pandemic, was signed into law on May 5, 2021 and took effect on November 1, 2021.
Under the law, each workplace safety committee must be composed of employee and employer designees, with at least two-thirds of the committee comprised of non-supervisory employees, and must be co-chaired by an employer representative and a non-supervisory employee representative. The law also provides that each workplace safety committee shall be authorized to perform tasks such as identifying and raising occupational health and safety concerns and participating in site visits by governmental entities responsible for enforcing health and safety. The law also includes an anti-retaliation provision, which subjects violators to civil penalties.
While the law does not imbue the health and safety committees with many of the powers found in collectively bargained health and safety clauses (e.g., the contractual rights to insist on safe and healthful work conditions, grieve workplace hazards, or refuse imminently dangerous work), it mandates bilateral discussion of health and safety issues, promotes collective assertion of employees’ shared health and safety concerns, and provides some protection for employees who take leadership roles in presenting those concerns.
Mandating Retirement Savings Plan Enrollment
New York State now requires certain private employers who do not have their own retirement savings plans to automatically enroll their employees in a retirement savings plan administered by the State and funded by payroll deductions, pursuant to an amendment to the State’s General Business Law passed on October 21, 2021 and effective immediately.12
The amendment specifies that employers with 10 or more employees in the State, who have been in business for at least two years, and who have not offered their employees a qualified retirement plan such as a 401(k) or 403(b) plan, must enroll their employees in the State’s Secure Choice Savings Program. Participating employees will initially be enrolled at a contribution rate of three percent of their wages, but may choose to modify their contribution level or opt out of the program. Those employees’ individual retirement accounts (“IRAs”) will be portable, i.e., employees who change jobs may continue contributing to their IRAs or roll them over into other retirement savings plans. The amendment also requires covered employers to provide their employees, prior to enrollment, with informational materials about various aspects of the program.
Requiring Notice to Employees, Upon Hire, of Employers’ Monitoring of Employees’ Emails, Internet Use and Telephone Calls
Under an amendment to New York State’s civil rights law, passed on November 8, 2021 and set to take effect on May 7, 2022,13 businesses that monitor or intercept employees’ e-mails, telephone calls, or internet use are required to provide employees, upon hire, with written notice of the monitoring practices. The required notice must be in writing, in an electronic record, or in another electronic form, and must be acknowledged by the employee in writing or electronically. The amendment applies to all private employers, regardless of size, and includes civil penalties for noncompliance. Although New York’s law is the first of its type, other states and municipalities are likely to follow suit, as employee monitoring practices—which are frequently used to keep tabs on remote workers—become more prevalent.
Expanding Domestic Workers’ Rights under the City’s Human Rights Law
Pursuant to an amendment to the City’s Human Rights Law (“NYCHRL”), enacted on August 26, 2021 and effective March 12, 2022, that law’s employment protections will apply to all domestic workers who perform work in New York City, eliminating, for that category of workers, the requirement that covered employers have four or more employees.14 The NYCHRL affords to covered workers protection against discrimination and harassment based on membership in a protected category (such as gender, race, or national origin) and retaliation for reporting such treatment, as well as the right to a reasonable workplace accommodation for a disability. The amendment means that domestic workers who are employed in private homes as nannies or Bhousekeepers—predominantly women and people of color—will now be protected under the law.