Starting November 1, 2022, New York City employers will be required to post salary ranges on advertisements for internal and external job listings. This new law, which amends Section 8-107 of the New York City Administrative Code, provides that it is an “unlawful discriminatory practice” for employers and employment agencies to list a job, promotion, or transfer opportunity in an advertisement without including the maximum and minimum salary range for the position.

After the City Council passed amendments on April 28, which were signed into law by Mayor Eric Adams on May 12, the New York City Commission on Human Rights (the “Commission”) published updated guidance for employers on the amended law.

Continue Reading New York City’s Amended Salary Transparency Law to Take Effect on November 1

A new law signed by President Biden brings significant changes to employers’ ability to require arbitration of certain disputes with employees and could lead to an increase in sexual assault and sexual harassment claims against employers in court.  On March 3, 2022, President Biden signed into law the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021” (the “Act”).  The Act amends the Federal Arbitration Act (“FAA”) to provide that predispute arbitration agreements and predispute joint-action waivers relating to sexual assault and sexual harassment disputes are unenforceable at the election of the person or class representative alleging the conduct.  The Act took effect immediately upon signing.

Continue Reading New Law Ends Mandatory Arbitration for Sexual Assault and Sexual Harassment Claims

In a development that will sound familiar to employers, California has reinstated the requirement, which had expired last fall, to make available to employees up to 80 hours of COVID-19 supplemental paid sick leave (“Supplemental Sick Leave”).  The new measure, Senate Bill (“SB”) 114, was signed by Governor Newsom on February 9, 2022, and the requirement to provide the new sick leave went into effect on February 19. Employees may use the new sick leave retroactive to January 1, 2022.

Continue Reading California Reinstates and Updates COVID-19 Supplemental Paid Sick Leave for 2022

Pursuant to a new Order issued by New York City’s Commissioner of Health and Mental Hygiene, beginning December 27 workers in New York City who perform in-person work or interact with the public in the course of their work must provide proof of at least one dose of a COVID-19 vaccination before entering the workplace.  Workers then have 45 days to show proof of their second dose if they received either the Pfizer or Moderna vaccine.  The Order requires employers to exclude from the workplace any worker who has not provided proof of vaccination or been granted a religious or medical accommodation to the vaccine mandate, as well as workers who do not provide proof of a second Pfizer or Moderna dose within 45 days of submitting proof of the first dose.

Continue Reading New York City Announces Workplace COVID-19 Vaccination Requirement

Governor Newsom recently signed into law SB 331 to impose a number of new restrictions on employment settlement, separation, and nondisclosure agreements. Here’s an overview of the new requirements, which apply to agreements entered into on or after January 1, 2022:

First, for settlement agreements involving claims of harassment or discrimination based on any protected class or retaliation, the new law bars confidentiality provisions that prevent an employee from disclosing information regarding the claim. This is an expansion of current law that prohibits such confidentiality clauses in settlement agreements pertaining to claims of sexual assault, sexual harassment, or sex discrimination. Consistent with existing law, employers can still prevent the disclosure of amounts paid in settlement. Also, at the employee’s request, an agreement may include a provision that shields their identity and facts that could lead to the discovery of their identity, except if a government agency or public official is a party to the settlement agreement.

Second, SB 331 prohibits confidentiality and non-disparagement provisions in employment separation and nondisclosure agreements that have the purpose or effect of restricting disclosure of information about harassment, discrimination, or other workplace conduct the employee believes is unlawful. Furthermore, employers must include the following language in a non-disparagement or other contractual provision that restricts an employee’s ability to disclose information related to conditions in the workplace: “Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.” These requirements do not apply to a negotiated settlement agreement to resolve an underlying claim filed by an employee in a court, administrative agency, alternative dispute resolution forum, or the employer’s internal complaint process.

Third, the new law requires that for all employment separation agreements (except negotiated settlement agreements as noted above), the employer must (1) notify the employee that the employee has a right to consult an attorney regarding the agreement, and (2) provide the employee with a reasonable time period of not less than five business days in which to do so. An employee may sign the agreement prior to the end of the five-day period if the decision to do so is knowing and voluntary and not induced by the employer through fraud, misrepresentation, a threat to withdraw or alter the offer, or by providing different terms if an employee signs prior to the expiration of such time period.

In light of these new provisions, employers should promptly review template agreements to ensure compliance as of January 1, 2022. Agreements that do not comply may be unenforceable.

The recently enacted coronavirus economic relief package, the American Rescue Plan of 2021 (“ARPA”), contains the most significant changes in fifteen years to the funding rules of single employer pension plans.  These changes have largely has fallen under the radar of the national press – an outcome disappointing perhaps only to ERISA nerds.  The little press addressing the pension provisions of ARPA mostly has been focused on the financial relief the legislation provides to troubled multiemployer pension plans — which, as we discuss elsewhere, have major implications for employers that participate, or are considering whether to participate, in a multiemployer plan.

Nevertheless, the significant changes to the single-employer plan funding rules warrant the attention of any employer that sponsors a single-employer defined benefit plan.  While the new law may significantly reduce the amount of contributions to pension plans that are required by law, reducing contributions may have other consequences that employers may wish to weigh.

Continue Reading To Fund or Not To Fund: Considerations for Employers Impacted by Recent Changes to Pension Plan Funding Rules

Effective March 29, 2021, California employers with more than 25 employees must provide up to 80 hours of paid sick leave for certain COVID-19-related reasons.  The new law, Senate Bill 95 (adding Labor Code Sections 248.2 and 248.3), is retroactive to sick leave taken beginning January 1, 2021.  The law will expire on September 30, 2021.

Last year, California enacted a COVID-19 paid sick leave law that applied to employers with 500 or more employees, and which expired on December 31, 2020.  The new California COVID-19 supplemental paid sick leave law (“Supplemental Sick Leave”) requires any business with more than 25 employees to provide Supplemental Sick Leave that is in addition to paid sick leave that the employee is already entitled to under other applicable laws (or previously took under the prior California COVID-19 sick leave law).

Full-time employees are entitled to 80 hours of Supplemental Sick Leave, and part-time employees are entitled to an amount of leave that correlates with: (1) the number of hours the employee regularly works over a two-week period, or (2) if the employee works a variable number of hours, 14 times the average number of hours the employee worked each day in the six months preceding the date the employee took Supplemental Sick Leave.

Continue Reading California Employers Required to Provide COVID-19 Supplemental Paid Leave, Retroactive to January 1, 2021

Effective March 12, 2021, all public and private employers in New York must provide each employee with up to four hours of paid leave to obtain a COVID-19 vaccine injection.  The new law, which took effect immediately after being signed by Governor Cuomo, adds a new Section 196-c to the New York Labor Law and Section 159-c to the New York Civil Service Law.

Employees are entitled to paid leave, at their regular rate of pay, for a “sufficient period of time, not to exceed four hours per vaccine injection,” unless the employee is entitled to receive a greater number of hours under an existing employer policy or collective bargaining agreement.  Accordingly, employees who must take two doses of a COVID-19 vaccine are entitled to take up to eight hours (i.e., four hours per injection) of leave.  The paid leave provision expires on December 31, 2022.

Continue Reading New York Employers Now Required to Provide Paid Leave to Take COVID-19 Vaccine

Effective for taxable years beginning after December 31, 2017, section 4960 of the Internal Revenue Code imposes a tax at the corporate income tax rate (currently 21 percent) on two types of compensation paid by applicable tax-exempt organizations (ATEOs) to their covered employees.  An ATEO’s covered employees generally include its five highest paid employees for a year plus all individuals determined to be covered employees for a preceding year.

  • The two types of compensation are—
    • Remuneration (generally, wages for purposes of federal income tax withholding) in excess of $1,000,000 paid by an ATEO or its related organizations for a year with respect to employment of any covered employee.
    • Any “excess parachute payment” paid by an ATEO or related organization to any covered employee.
  • Granting a legally binding right to nonvested remuneration counts as “paying remuneration.”
  • See here for our previous blog post on the basics of the statute.

Treasury and the IRS published interim guidance on December 31, 2018 (Notice 2019-9), proposed regulations in June 2020, and final regulations in January 2021. In reponse to the interim guidance, several comments raised concerns about the treatment of an employee of a taxable employer who spends some of his or her time providing services to a related ATEO. Under one reading of the statute and interim guidance, such an employee might be treated as a “covered employee” whose compensation is subject to the excise tax under § 4960 even if the employee receives no compensation from the ATEO. The IRS and Treasury responded by including several helpful exceptions in the proposed regulations. The exceptions remain largely unchanged in the final regulations.

  1. Who are an ATEO’s employees under the final regulations?

Under the final regulations, an ATEO’s employees generally include its common-law employees and its officers. Whether an individual providing services to an ATEO is a common-law employee of the ATEO depends on the facts and circumstances, most significantly the type and degree of control the ATEO has over the individual’s performance of services. An officer of an ATEO is treated as its employee regardless of the common-law standard. This definition generally would pick up any employee of a taxable employer who serves as an officer of a related ATEO or who performs services for the ATEO as a common-law employee.

  1. Who are an ATEO’s covered employees under the final regulations?

Subject to certain exceptions, described below, the “covered employees” of an applicable tax-exempt organization are the organization’s five highest compensated employees for the taxable year and any employees who were covered employees for any preceding taxable year beginning after December 31, 2016. This means that if an employee is a covered employee for one year, the employee will be a covered employee for all future years. This is sometimes referred to as the “once a covered employee, always a covered employee” rule. Compensation paid to an ATEO’s employee by related organizations is aggregated with any compensation paid by the ATEO for purposes of determining whether an individual is a covered employee of an ATEO.

  1. What exceptions do the final regulations provide for determining an ATEO’s covered employees that might apply to an employee of a related taxable entity?

The final regulations allow certain employees to be disregarded in determining an ATEO’s five highest-compensated employees for a year. These exceptions apply only to the current-year prong of the definition of “covered employee.” They do not preclude an individual from being a covered employee under the “once a covered employee, always a covered employee” rule.

  • Limited hours exception. This exception applies to an individual in determining an ATEO’s five highest compensated employees for a year if all of the following remuneration and service requirements are met:
    • Neither the ATEO nor any related ATEO paid remuneration to the individual for services the individual performed as an employee of the ATEO during the applicable year. (For this purpose, a payment from a related organization that is not an ATEO would be treated as a payment from an ATEO if the non-ATEO is entitled to reimbursement or other consideration from the ATEO for the payment.)
    • The individual performed services as an employee of the ATEO and all related ATEOs for no more than 10 percent of the total hours the individual worked as an employee of the ATEO and any related organizations during the applicable year. This determination can be based on days worked instead of total hours worked. This requirement is deemed to be satisfied if the individual performs no more than 100 hours of service as an employee of the ATEO and all related ATEOs during the applicable year.
  • Nonexempt funds exception. This exception applies to an individual in determining an ATEO’s five highest compensated employees for a year if all of the following requirements are met:
    • Neither the ATEO , nor any of certain related organizations, paid remuneration to the individual for services the individual performed as an employee of an ATEO during the applicable year and the preceding applicable year. (For this purpose, a payment from a related organization that is not an ATEO would be treated as a payment from an ATEO if the non-ATEO is entitled to reimbursement or other consideration from the ATEO for the payment.)
    • The individual performed services as an employee of the ATEO and any related ATEOs for 50 percent or fewer of the total hours worked as an employee of the ATEO and any related organizations during the applicable year and the preceding applicable year (i.e., a rolling two-year measurement period). This determination can also be based on days worked instead of total hours.
    • No related organization that paid remuneration to the individual during the applicable year and the preceding applicable year provided services for a fee to the ATEO, to any related ATEO, or to any taxable related organization controlled by the ATEO or by one or more related ATEOs, either alone or together with the ATEO, during the applicable year and the preceding applicable year.
  • Limited services exception. This exception applies to an individual in determining an ATEO’s five highest compensated employees for a year, even though the ATEO paid remuneration to the individual, if all of the following requirements are met:
    • The ATEO did not pay 10 percent or more of the individual’s total remuneration for services performed as an employee of the ATEO and all related organizations during the applicable year.
    • Either (1) a related ATEO paid at least 10 percent of the remuneration paid by the ATEO and any related organizations during the applicable year, or (2) no related ATEO paid at least 10 percent of the total remuneration paid by the ATEO and any related organizations and the ATEO paid less remuneration to the individual than at least one related ATEO during the applicable year.
  1. For which taxable years do the final regulations apply?

The final regulations apply to taxable years beginning after December 31, 2021. Taxpayers are permitted to apply the final regulations for earlier taxable years if they apply them in their entirety and in a consistent manner.