New York employers face new requirements under recently enacted laws and regulations

New York employers face new legal obligations in 2024 under several major laws signed by Governor Kathy Hochul in late 2023. Employers are encouraged to review their policies and practices based on recent developments and to monitor for further changes on a range of topics, including noncompete agreements, disability and leave, and artificial intelligence.

Below, we take a closer look at the key changes.

Minimum wage

Under S.B. 4006-C, new minimum wage hourly rates took effect on January 1, 2024. The minimum wage in New York City and Nassau, Suffolk, and Westchester Counties is now $16 per hour, with the remainder of New York state at $15 per hour. Those state and local rates will increase by 50 cents annually for the next two years and then, beginning on January 1, 2027, will be adjusted annually based on changes in the consumer price index (subject to certain exceptions).

Overtime exemption thresholds

In addition to increasing minimum wages, New York has adjusted the minimum salary requirements for employees to be exempt from the overtime premium pay. Generally, to be exempt as an administrative or executive employee, New York law requires that (1) the employee is paid a base salary, (2) the base salary is above a specified threshold, and (3) the employee performs certain exempt functions.

As of January 1, 2024, New York has increased the minimum salary levels for these exemptions and slated additional future increases, as follows:

Under the New York Labor Law, these exemption thresholds apply only to administrative and executive employees; New York does not have a commensurate threshold for employees who are eligible for the professional exemption, and thus the federal salary thresholds for exemption will apply for these workers.

Employers are encouraged to review their employee exemption classifications for employees to ensure that they are compliant with New York law and, if not, to promptly remedy any deficiencies.

Increase to salary threshold for exemption from certain wage payment provisions

In addition to the exemptions from overtime premium payments, New York law recognizes that employees may be exempt from certain other requirements of the New York Labor Law. This includes provisions relating to pay frequency, mandatory direct deposit, and the ability to assert certain claims with the New York Department of Labor. Effective March 13, 2024, S.B. 5572 will increase the weekly salary threshold in New York for these exemptions from $900 to $1,300. This increase does not relate to the salary levels for purposes of determining exemption from the state’s minimum wage and overtime obligation (which are noted above), but rather certain provisions governing the method and frequency of wage payments to employees.

Under the forthcoming legislation, employees who fall under the new threshold (or are otherwise nonexempt) must be paid on at least a semi-monthly basis. In addition, employers must obtain written consent from nonexempt employees before paying them through direct deposit. Nonexempt employees also have the ability to file wage theft claims with the New York Department of Labor. Significantly, under S.B. 2832-A, which took effect last year, wage theft is now classified as a form of larceny in New York state.

Freelance Isn't Free Act

Starting on May 20, 2024, a new law will provide protections to an estimated two million freelancers across the state. Modeled after New York City’s 2017 law, S.B. 5026, the Freelance Isn’t Free Act, protects independent contractors who contract with a private-sector party for services totaling $800 or more within a 120-day period (with some exclusions). The law requires a written contract between the parties with certain information and payment of the contracted compensation by the due date or within 30 days after completion of services if a due date is not specified.

Hiring parties are required to keep the contract for a period of no less than six years and make it available to the commissioner upon request. A failure to do so will give rise to a presumption that the terms of the contract presented by the freelancer “are the agreed upon terms.” Model contracts in English and other languages are expected to be published on the New York State Department of Labor’s website.

This law further prohibits hiring parties from retaliating against a freelance worker to deter them from exercising their rights under the law. Freelancers will have the right to file a complaint with the labor commission for alleged violations of the law and to bring a private action in “any court of competent jurisdiction for damages.” A prevailing plaintiff is entitled to “statutory damages equal to the value of the underlying contract” and reasonable attorneys’ fees and costs. In addition, a prevailing party alleging failure to timely pay contracted compensation may recover “double damages, injunctive relief, and other such remedies as may be appropriate.”

New York employers cannot require workers’ social media information

Effective March 12, 2024, A.B. 836 will prohibit employers from requesting or requiring access to personal electronic communication accounts of prospective or current employees. The new law prohibits employers from requesting, requiring, or coercing employees and job applicants to (i) disclose their username, password, or other authentication information for accessing their personal account through an electronic communications device; (ii) access their personal account in the presence of the employer; or (iii) reproduce in any manner photographs, video, or other information contained within a personal account obtained through a prohibited means.

Importantly, the law does not prohibit or restrict employers from viewing or accessing information about an applicant or employee that can be obtained without any required access information, that is available in the public domain, or that is for the purposes of obtaining reports of misconduct or investigating misconduct. Further, employers may require an employee to disclose any username, password or other means for accessing nonpersonal accounts that provide access to the employer's internal computer or information systems.

Statute of limitations under Human Rights Act extended to three years

Effective February 15, 2024, S.B. 3255 amends the New York State Human Rights Law to extend the statute of limitations on claims resulting from unlawful discriminatory practices from one year to three years (in line with the New York City Human Rights Law). While employees currently have three years to file a claim for sexual harassment, all other claims were limited to a one-year statute of limitations; as amended, these claims will receive the benefit of a longer statutory period moving forward.

New York issues guidance on pay transparency law

As of September 17, 2023, New York’s pay transparency law requires New York state businesses with four or more employees to list compensation ranges for designated job opportunities, promotions, and transfers that can or will be performed at least partly in New York or that report to a supervisor or office in New York state.

Proposed regulations were published on September 13, 2023. While employers await final regulations – the public comment period closed on November 13, 2023 – the New York State Department of Labor has issued employer guidance, including fact sheets and frequently asked questions.

Other recent changes

As a reminder, employers in New York are also facing other new obligations under various laws that took effect in 2023, including a prohibition on captive audience meetings, restrictions on invention assignment agreements, a prohibition on height and weight discrimination, a requirement for employers to provide notice of the right to file for unemployment benefits, restrictions on non-disclosure and non-disparagement provisions in release agreements, and new model sexual harassment policy.

In New York City, Local Law 144 imposed new requirements related to the use of automated decision tools, and amendments to the New York City Earned Safe and Sick Time Act (ESSTA) addressed various issues, including employer size, employee eligibility, notice requirements, documentation standards, payment of sick/safe time, and policy requirements.

What’s ahead

New York employers are also monitoring other pending bills and developments. For example:

• Expansion to state disability leave: In early January 2024, Governor Hochul announced that she intends to increase the maximum paid medical and disability leave for workers for the first time in 35 years to support women and parents and those with disabilities. According to Governor Hochul, the plan will involve a proposed amendment to increase the maximum weekly benefit over the next five years and tie it to the Statewide Average Weekly Wage (SAWW). To match the paid family leave benefit, for the first 12 weeks of medical leave, eligible employees would receive 67 percent of their average weekly wage, capped at 67 percent of the SAWW, once fully phased in after five years.
• Paid prenatal leave: Governor Hochul aims to create the first-in-the-nation statewide paid prenatal leave by expanding the state’s Paid Family Leave policy (PFL) to include 40 hours of paid leave to attend prenatal medical appointments.
• Cultural competency training: On January 5, 2024, Governor Hochul announced the results of the Transgender Employment Study conducted by the New York State Department of Labor and the New York Division on Human Rights, which found that employment discrimination based on gender identity is pervasive across the state. The report recommends various policies, including mandating cultural competency and training on the Gender Expression Non-Discrimination Act (GENDA) across the state.
• Electronic monitoring and automated decision tools: Proposed bill S.B. S7623 would restrict the use by an employer or an employment agency of electronic monitoring or an automated employment decision tool to screen a candidate or employee for an employment decision unless such tool has been the subject of a bias audit within the last year and the results of such audit have been made public. The proposed bill would also provide a private cause of action.
• Noncompete legislation still on the horizon: Although Governor Hochul recently vetoed Senate Bill S3100A, which would have banned all noncompetes in the employer-employee context and created a private right of action, New York employers are expected to see revised noncompete legislation in 2024. The Governor has stated that she remains committed to enacting non-compete legislation protecting “middle-class and low-wage earners,” and Senator Sean Ryan, who sponsored SB S3100A, has indicated that a new noncompete bill will be reintroduced this year.

If you have questions about how these or other developments may impact your workforce in New York, please reach out to your usual DLA Piper attorney, the authors, or any of our New York Employment partners.