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New York Law Alerts: July 2019

New York was subject to three law changes in July 2019. Two changes regarding wages further defined NY Law mandates. The third was instated by a Federal Court ruling regarding mandatory arbitration. If your business currently has signed Arbitration Agreements, pay particularly close attention to the third NY Law Alert. 

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NY Law Alert 1: Pay Equity

On July 10, 2019, New York Governor Andrew Cuomo signed legislation amending the state’s labor law to prohibit wage differentials. (S.B. 5248-B)

No employee who falls within one or more protected class may be paid a lesser wage than another, on the basis of the employee’s protected status, in the same establishment for:

  • Equal work on a job with equal skill, effort, and responsibility, and which is performed under similar working conditions; or
  • Substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions, except where payment is made pursuant to:
    • A seniority system;
    • A merit system;
    • A system that measures earnings by quantity or quality of production; or
    • A bona fide factor other than status within one or more protected class or classes, such as education, training, or experience. A bona fide factor must be job-related and consistent with business necessity.

The bona fide factor exception does not apply when the employee demonstrates:

  • That an employer uses a particular employment practice that causes a disparate impact on the basis of status within one or more protected class or classes;
  • That an alternative employment practice exists that would serve the same business purpose and not produce such differential; and 
  • That the employer has refused to adopt such alternative practice.

Under the law, protected class includes age, race, creed, color, national origin, sexual orientation, gender identity or expression, military status, sex, disability, predisposing genetic characteristics, familial status, marital status, or domestic violence victim status, and any employee protected from discrimination pursuant N.Y. Exec. Law § 296(a), (b), and (c) (unlawful discriminatory practices) and any intern protected from discrimination pursuant to section N.Y. Exec. Law § 296c (unlawful discriminatory practices related to interns).

The law is effective October 8, 2019.

Read NY S.B. 5248-B

NY Law Alert 2: Salary History Ban

On July 10, 2019, New York Governor Andrew Cuomo signed legislation prohibiting private and public employers from seeking salary history from applicants. (5308B/6594)

Under the new law employers may not:

  • Rely on an applicant’s wage or salary history to determine whether to extend a job offer or the amount of wages or salary.
  • Verbally or in writing seek, request, or require an applicant’s or current employee’s wage or salary history as a condition to:
    • Be interviewed;
    • Continue to be considered for a job offer; or
    • Employment or promotion.
  • Verbally or in writing seek, request, or require the wage or salary history of an applicant or current employee from a current or former employer, current or former employee, or agent of either.
  • Refuse to interview, hire, promote, otherwise employ, or otherwise retaliate against an applicant or current employee:
    • Based upon prior wage or salary history;
    • Because the individual did not provide wage or salary history; or
    • Because the individual filed a complaint with the New York State Department of Labor.

Applicants or current employees may voluntarily, and without prompting, disclose or verify their wage or salary history to negotiate their wage, salary, etc.

Wage Confirmation

An employer may only confirm wage or salary history if:

  • Compensation is included when the job offer is extended; and
  • The applicant or current employee responds to the offer by providing prior wage or salary information to support a wage or salary higher than offered by the employer.

The law is effective January 6, 2020.

NY Law Alert 3: NY Arbitration Agreements May Now Prove Unenforceable.

Federal Court ruled on June 26, 2019 in Latif v. Morgan Stanley & Co LLC that the Federal Arbitration Act (FAA) Pre-Empts NY Civil Practice Law, possibly effecting Arbitration Agreements. 

NY Civil Practice Law, which prohibits “any clause or provision in any contract which requires as a condition of the enforcement of the contract (or obtaining remedies under the contract) that the parties submit to mandatory arbitration to resolve any allegation or claim of an unlawful discriminatory practice of sexual harassment.”

In Latif, the employer’s offer letter included an arbitration agreement, which the employee and employee voluntarily entered. In summary, the plaintiff-employee alleged that he was a victim of sexual harassment and that his sexual harassment claims could not be subject to the defendant-employer’s arbitration agreement.

In Latif, the only dispute between the parties was whether the plaintiff-employee’s sexual harassment claims were subject to the terms of the mutually entered arbitration agreement in light of § 7515. Subsequently, the defendant-employer’s motion to compel arbitration was granted.

The decision also mentioned in a footnote that, “on June 19, 2019, the New York legislature passed SB6577/AB8421, which would amend § 7515 to change the definition of ‘prohibited clause’ and ‘mandatory arbitration clause’ to encompass mandatory arbitration of claims of discrimination generally, rather than specifically of sexual harassment. For the same reasons described above, § 7515 as so amended would not provide a defense to the enforcement of the arbitration agreement” and may prove to be unenforceable.

The decision took effect on June 26, 2019, but may be subject to appeal.

Read Latif v. Morgan Stanley

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