Hiring a New York Employee? Don’t Forget These Key Legal Items

Since the onset of the COVID-19 pandemic, remote work quickly proliferated, and has continued in some fashion ever since. As a consequence, there has also been a proliferation of employers that have become multijurisdictional in ways they never were before. When engaging workers, employers must be mindful of nuances in employment laws in employees’ home states—even in states where an employer has no office or other connection. New York has its own employment law idiosyncrasies that employers need to consider when engaging employees who live or work in New York City or New York State. Below is a checklist of critical employment-related laws to consider.

Onboarding

• At-will employment. New York is an at-will employment state. Unless agreed upon otherwise, employees are employed at-will, which means, day to day, the employee has no guarantee of future employment, and either the employee or employer may terminate the relationship at any time, without reason or notice.
• Background checks. In New York City, background checks or requests relating to an applicant’s criminal history may only be conducted after a job offer is extended to a candidate. Employers should be aware that state law puts limitations on employers that may want to deny employment to an applicant with a criminal conviction record.
• Drug Testing. Unless otherwise permitted by law, New York employers cannot test employees for cannabis. THC should be removed from the drug panel of any pre-employment drug screening.
• Non-Disclosure Agreements (NDA) and other Restrictive Covenants. Non-competes and other restrictive covenants continue to be enforceable in New York, provided they are reasonable and serve a legitimate business interest.  At-will employment also continues to serve as sufficient consideration.  However, it is best practice to secure a non-disclosure agreement, and other restrictions at the outset of employment rather than after an employee is already working.
• Insurance and Payroll. New York State requires employers to enroll in mandatory insurance programs for workers’ compensation, short-term disability, and paid family leave insurance benefits. Employers with any employees in New York, including remote employees, should confirm with their payroll and or insurance providers that they are properly enrolled in these programs and are making the required deductions from wages. The New York Department of Labor is active in enforcement and penalizes employers for lapses in coverage. See below for additional information on requirements relating to paid family leave.

Employment Policies

Employers should consider reviewing certain key employment policies for compliance with New York City and State laws:

• Paid Family Leave. As mentioned above, employers are required to obtain Paid Family Leave insurance if an employee works from New York. Eligible employees may take Paid Family Leave to bond with a new child, care for a sick family member, or assist loved ones when a family member is deployed abroad on active military service. For a maximum of 12 weeks, eligible employees receive 67% of their average weekly wage up to a cap of 67% of the current statewide average weekly wage (the maximum benefit for 2022 is $1,068.36 per week). Employers are free—but not required—to pay the employee the difference between the employee’s wage and the state’s Paid Family Leave benefit.
• Paid Sick Leave. Employers are required to provide paid sick leave to New York employees under state and New York City law. Covered employees accrue leave at a rate of one hour for every 30 hours worked. The amount of leave depends on the size of the employer: employers with 100 or more employees must provide up to 56 hours of paid sick leave per calendar year; employers with 5 to 99 employees must provide up to 40 hours of paid sick leave per calendar year, and employers with four or fewer employees and net income of greater than $1 million in the previous tax year are required to provide up to 40 hours of paid sick leave per calendar year. New York City and State requirements are largely identical, with the exception that front-loaded sick leave need not be carried over to the following year under NYC law.
• Paid Time Off.  With respect to vacation time or paid time off, New York is a “use-it-or -lose-it” state, which means unless the employer agrees (or has a policy or practice to the contrary), employees forfeit—and need not be paid for—any accrued, unused time at the end of any year or upon the termination of employment.
• Sexual Harassment Policy and Training. Employers must adopt a sexual harassment prevention policy and annual interactive training that meet or exceed any applicable New York City and state minimum standards. Employers also should be aware of other statutory requirements for addressing non-disclosure of facts and claims of discrimination in confidentiality agreements with employees.
• Salary transparency. As we previously reported, beginning November 1, 2022, it will be unlawful for a New York City employer to advertise a job, promotion, or transfer without including the minimum and maximum salary for the position. Covered employers include those with at least four employees or independent contractors if at least one works in New York City. At the state level, a bill similar to the NYC law was passed with a few key differences, including recordkeeping requirements and the need to include a job description in a posting. If signed by Governor Hochul, the bill would take effect 270 days after signature.

As all of these New York-specific requirements reflect, employers should examine and monitor the nuances of employment-related laws in the various jurisdictions where they operate and or employ workers. The intent here is to provide an overview of key items to consider when engaging workers in New York. Employers are encouraged to consult with legal counsel to ensure compliance with these and various other state and local requirements.