New York News & Analysis

  • Happy New Year: New 'call-in' pay regulations on the way

    The New York State Department of Labor (NYSDOL) has proposed sweeping new regulations for "call-in" pay, which were published in the December 18, 2018, State Register. While the proposed regulations are open for comment for 30 days, they are not expected to change substantively after the public comment period closes. As a result, we expect the final regulations to be promulgated in early 2019 and to go into effect shortly thereafter. Read on to see how the new call-in pay requirements may affect your business.

    Background

    NYSDOL "wage orders" contain specific regulations governing how workers in New York are to be paid. Three different wage orders exist that apply to: (1) workers in the hospitality industry (hotels and restaurants), (2) nonprofit institutions, and (3) all other industries. This third and broadest category is covered by the Minimum Wage Order for Miscellaneous Industries and Occupations (the "Miscellaneous Wage Order"). Sections 142-2.3 and 142-3.3 of the Miscellaneous Wage Order guarantee that nonexempt employees who "report for work" will receive "call-in" pay equal to at least four hours of pay or the number of hours in their regularly scheduled shift, whichever is less, at the basic minimum hourly wage. (Note that the Fair Labor Standards Act (FLSA) provides for "on-call" pay only if an employee is not permitted to leave the employer's premises or a location controlled by the employer during a specified time.)

    To avoid report-for-work call-in pay liability when an employee is sent home because of a lack of work, many employers that use "just in time" scheduling methods will wait until the last minute to inform employees to report to work (or cancel their shifts) or may require employees to check in to see if they are still scheduled to work before reporting to the workplace. The current Miscellaneous Wage Order contains no prohibitions or additional payment obligations if an employer orders an employee to work a shift (or cancels a shift) at the last minute or requires the employee to check in before reporting for work.

    Following the November 2017 implementation of New York City's (NYC) Fair Workweek Law, which provides predictive scheduling for fast-food and retail workers as well as enhanced call-in pay penalties, Governor Andrew Cuomo jumped on the bandwagon, proclaiming that employers shouldn't be permitted "to adjust staffing levels in real time, calling workers in to meet unexpected customer demand, and sending them home early when store traffic is light." The subsequently proposed changes to the Miscellaneous Wager Order are allegedly designed to address last-minute shift cancellations and adjustments and call-in requirements, which, according to the governor, create difficulties with childcare, school, family, and second job commitments for employees.

    Proposed changes to call-in pay regulations

    The proposed amendments to the Miscellaneous Wage Order keep the four hours of call-in pay for nonexempt employees who report to work for any part of a shift in addition to providing for two to four hours of call-in pay in the following new situations:

    • Unscheduled shifts. An employee who reports to work for any hours that weren't scheduled at least 14 days in advance will receive an additional two hours of call-in pay.
    • Canceled shifts. An employee whose shift is canceled within 72 hours of the beginning of the shift will receive at least four hours of call-in pay.
    • On-call pay. An employee who is required to be available to report to work for any shift will receive at least four hours of call-in pay.
    • Calling for schedules. An employee who is required to be in contact with her employer within 72 hours of the beginning of a shift to confirm whether to report to work will receive at least four hours of call-in pay.

    In the past, the NYSDOL has allowed employers to "offset" any amounts above the minimum wage and overtime rates paid to employees during the workweek against any call-in pay employees are otherwise owed. Under the proposed regulations, call-in pay for employees who report to work for scheduled or unscheduled shifts (referred to as "actual attendance") is calculated at their regular or overtime rate of pay, whichever is applicable, minus any allowances permitted by law (i.e., credits). This change eliminates an employer's ability to avoid call-in pay for an employee who reports to work if his regular rate of pay significantly exceeds the minimum wage.

    However, call-in pay for hours not actually worked (i.e., for canceled shifts, on-call time, and call-for-schedule time) will be calculated at the basic minimum wage (based on the employer's geographic area and size). Also, call-in pay for hours not actually worked will not count for purposes of calculating overtime. Finally, the four hours of call-in pay for reporting to work and for canceled shifts may be reduced to the number of hours the employee is scheduled to work and normally works for that shift.

    Exceptions

    The amendments to the Miscellaneous Wage Order include several important exceptions for the following employees:

    • Employees covered by a collective bargaining agreement that "expressly provides for call-in pay" are exempt.
    • Employees who earn more than 40 times the hourly minimum wage rate during the workweek are excluded from most of the new requirements. (However, employers are still liable for reporting-to-work call-in pay.)
    • Employees "whose duties are directly dependent on weather conditions, [and] employees whose duties are necessary to protect the health or safety of the public or any person, [and] employees whose assignments are subject to work orders, or cancellations thereof, . . . provided, however, that such employees also receive weekly compensation that exceeds the number of compensable hours worked times the applicable basic minimum wage rate, with no allowances," are excluded from most of the new requirements. (But employers are still liable for reporting-to-work call-in pay.)
    • "New" employees are exempt from the unscheduled shifts requirement during the first two weeks of their employment, as are employees who "volunteer" for an unscheduled shift. The volunteer exception is tied to a safe-harbor provision that states, "There shall be a rebuttable presumption that an employee has volunteered to cover a new or previously scheduled shift if the employer provides a written good[-]faith estimate of hours to all employees upon hiring, or after the effective date of this section for previously hired employees, which may be amended at the employee's request or upon two weeks' notice by the employer, and if the request to cover a new or previously scheduled shift is either: (i) made by the employee whose shift would be covered; or (ii) made by the employer in a written communication to a group of employees requesting a volunteer from among the group and identifying a reasonable deadline for responses. If no employee volunteers prior to the deadline, the employer may assign an employee to cover the shift without the additional call-in pay required for unscheduled shifts."
    • Employees who respond to weather or other travel advisories and accept an employer's offer to voluntarily reduce or increase their scheduled hours so that other employees may stay home, arrive early, arrive late, depart early, depart late, or any combination thereof are exempt from the unscheduled shifts and canceled shifts requirements.
    • Employees who request that their shift be canceled for time off are exempt from the canceled shifts requirement. Also, the canceled shifts requirement is void when operations at the workplace cannot begin or continue due to an act of God or some other cause outside the employer's control, including, but not limited to, a state of emergency declared by federal, state, or local government.

    Getting ready

    If enacted, the amendments to the Miscellaneous Wage Order will create tremendous call-in pay and overtime liability for employers. The regulations appear to be complex and comprehensive. With minor exceptions, employers can no longer require employees to work additional shifts without 14 days' advance notice, or cancel shifts without 72 hours' advance notice, or expect that an employee will be on call or call in for his schedule without providing new call-in pay. Say good-bye to "just in time" scheduling!

    Unfortunately, the amendments to the NYSDOL regulations do not line up neatly with the requirements of the NYC Fair Workweek Law, which covers fast-food workers (who are also covered by the Hospitality Wage Order) and retail workers (who are also covered by the Miscellaneous Wage Order). For example, while the NYC Fair Workweek Law prohibits certain retail employers from requiring employees to work on call, the amendments to the Miscellaneous Wage Order merely impose a call-in pay premium.

    It's reasonable to expect the regulations proposed by the NYSDOL to be finalized in early 2019. Therefore, you should get ready now by reviewing your staffing, shift, scheduling, and compensation policies and practices to determine the impact the anticipated new regulations will have and how to avoid potential added costs by changing how you administer your policies. Carefully review the requirements and the exceptions to the proposed regulations, and consult with employment counsel for assistance in navigating the shifting landscape.

    The authors can be reached at psweeney@cglawoffices.com and tlevine@cglawoffices.com or 607-723-9511.

  • General contractor cannot bar prevailing wage claims

    Under the New York Labor Law (NYLL), employers must pay prevailing wages, including fringe benefits, to all employees who are subject to a public works contract. The prevailing wage is the pay rate set by law for work on public works projects. Prevailing wages, which mirror the higher wages paid to union workers, are based on the trade used on the project and the location of the project. A recent case decided by the Appellate Division, First Department, reinforced how hard it is for a general contractor to avoid prevailing wage liability even if the affected workers are employed by another contractor.

  • Getting waxed: NYC car wash law under attack

    A recent case before the U.S. Court of Appeals for the Second Circuit (whose decisions apply to all New York employers) implicates the limits of federal preemption by the National Labor Relations Act (NLRA). Just in time for the holidays, the Second Circuit overturned a decision in which the U.S. District Court for the Southern District of New York invalidated a key provision of New York City's (NYC) Car Wash Accountability Law.Although the litigation is ongoing, the Second Circuit's decision has important lessons for New York employers regardless of the case's ultimate outcome.

  • Earning employee trust can reduce your legal liabilities

    "Trust" is a slippery concept. What does it mean for your employees to "trust" you or "distrust" you? And why should you care?

  • Minimum wage increases heat up the competition for hourly workers

    It's no news to most anyone with experience in federal wage and hour laws that they tend to lag far behind the times. The federal minimum wage—which has stood at $7.25 going on 10 years now—certainly falls into that category. According to the Bureau of Labor Statistics' CPI Inflation Calculator, today's equivalent of the 1978 minimum wage (which was $2.65) would be $10.72. According to the nonpartisan Pew Research Center, if the rate had risen at an appropriate pace since 1968, it would be close to $20.

  • Agency Action

    DOL launches initiative to strengthen H-2B compliance. The U.S. Department of Labors (DOL) Wage and Hour Division (WHD) in September announced a nationwide initiative to strengthen compliance with the labor provisions of the H-2B temporary visa program in the landscaping industry. The initiative includes providing compliance assistance tools and information to employers and stakeholders as well as conducting investigations of employers using the program. The WHD announced that last year, its investigations led to more than $105 million in back wages for more than 97,000 workers in industries with a high prevalence of H-2B workers, including the landscaping industry. A key component of the investigations is ensuring that employers recruit U.S. workers before applying for permission to employ temporary nonimmigrant workers. The H-2B program permits employers to temporarily hire nonimmigrant workers from outside the United States to perform nonagricultural labor or services in the country. The landscaping industry employs more H-2B workers than any other indus

  • Workplace Trends

    Turnover hits all-time high. Research from Salary.com indicates that total workplace turnover in the United States hit an all-time high in 2018, reaching 19.3%. That's nearly a full percentage point from 2017 and more than 3.5% since 2014. The report contains data from nearly 25,000 participating organizations of varying sizes in the United States. By industry, hospitality (31.8%), health care (20.4%), and manufacturing and distribution (20%) had the highest rates of total turnover. Utilities (10.3%), insurance (12.8%), and banking and finance (16.7%) had the lowest. By area of the country, the South Central region (20.4%) and the West (20.3%) had the highest rates of total turnover. The Northeast (17.3%) had the lowest rate of total turnover in the country.

  • NYC releases sexual harassment 'FAQ' guidance

    By now, employers should know that New York state (NYS) law requires all employers—regardless of their size—to have compliant policies and train their employees on sexual harassment in the workplace. New York City (NYC), which has its own law and regulations addressing sexual harassment policies and training, just released new frequently asked questions (FAQ) guidance on its training and notice requirements.

  • Second Circuit affirms denial of pay and benefits to discharged executive

    The U.S. Second Circuit Court of Appeals (whose rulings apply to all New York employers) recently affirmed the dismissal of a former employee's claims that he was owed retroactive salary and benefits under his employment agreement and company policy. The case highlights the need to ensure that executive employment agreements and compensation policies are well-written and uniformly enforced in a way that denies further pay and other compensation to employees who are discharged for cause.

  • Second Circuit dismisses former employee's citizenship status claim

    Employers are rightfully leery about taking adverse action against employees whose status may be protected by virtue of their national origin, ethnicity, or race. The Second Circuit recently affirmed the dismissal of a complaint against an employer under 42 U.S.C. § 1981 based on a former employee's citizenship status. You should understand how this decision can protect your organization against liability under Section 1981, but more important, you also need to be aware of the common circumstances in which the decision doesn't apply.