Amendments To Employee Wage Deductions In New York

New York's Governor Cuomo has signed legislation amending New York Labor Law §193 which restores to employers the ability to make certain deductions from employee wages in a number of instances; the New York Department of Labor (the “NYSDOL") had determined previously (via opinion letters) that such deductions were impermissible, even with the employee's consent. The legislation becomes effective on November 9, 2012.

The new amendments allow New York employers to make deductions (in addition to those existing currently under the statute) with respect to pay advances; accidental overpayment of wages; purchases made at events sponsored by bona fide charitable organizations; discounted parking passes and mass transit vouchers; gym membership dues; cafeteria, vending machine and pharmacy purchases made at the employer's place of business; tuition, room and board and fees for educational institutions; day care expenses; and payments for housing provided at no more than market rates by nonprofit hospitals.

Before an employer may take any of these additional deductions, the employer must: (i) provide the employee with written notice of the terms and conditions of the payment and its benefits; (ii) provide a written explanation of how the employer will take the deductions; and (iii) obtain the employee’s written, voluntary consent to the deduction. The employee’s consent may be revoked at any time. The employer must retain each authorization for at least six (6) years following the termination of the employee’s employment. Employees may also consent to a deduction through a collective bargaining agreement.

Interestingly, the amendments contain a "sunset provision" that automatically extinguishes the newly identified wage deductions on November 9, 2015. Accordingly, the State Legislature will likely revisit this issue at a later date to determine whether the new law is working; if it is, the "sunset provision" may be revoked.

The NYSDOL is required to issue regulations governing the timing and frequency of deductions and notice requirements, including a procedure that the employee may use to dispute the amount of the deduction. Employers are cautioned that they may wish to wait until after the NYSDOL issues its regulations, and the effective date of the new legislation, before entering into any wage deduction agreements with employees or taking any action with respect to wage deductions not permitted by statute currently.

Retaliation Claim Dismissed As Not Related To Title VII Proceeding

In a case of first impression, the Second Circuit Court of Appeals held that the termination of employment in connection with an internal company investigation was not retaliatory where an EEOC Charge had not been filed. The case is Townsend, et al. v. Benjamin Enterprises, Inc., et al. and can be found here.

In Townsend, the Plaintiff was the director of human resources for the defendant corporation. Plaintiff alleged that she was terminated after commencing an internal investigation of a sexual harassment complaint made by the co-plaintiff against an officer of the corporation. The corporate officer was a shareholder of the company and owned it with his wife.

At the trial level, the District Court granted Defendants’ motion for summary judgment on the grounds that the Plaintiff was not engaged in protected activity under Title VII since an EEOC Charge has not been filed. On appeal, the Second Circuit affirmed and held that participation in an internal employer investigation not connected with a formal EEOC proceeding does not qualify as protected activity.

In reading the Second Circuit's decision, I can't help but believe that it will have a chilling effect on internal investigations concerning discrimination. If the investigator is not protected from retaliation where the investigation gets "too close to home," vigorous internal efforts to discover and remedy unlawful discrimination likely will suffer.

Further Delay In NLRB Posting Requirement

The NLRB has announced that it will not yet implement its rule requiring employers covered by the National Labor Relations Act to post a Notice advising employees of their Union rights. The posting requirement was scheduled to take effect on April 30, 2012.

In light of conflicting decisions at the district court level as to whether the NLRB has authority to promulgate the rule in the first instance, the DC Circuit Court of Appeals has temporarily enjoined the NLRB’s rule. The NLRB stated that "[i]n view of the DC Circuit's order, and in light of the strong interest in the uniform implementation and administration of agency rules, regional offices will not implement the rule pending the resolution of the issues before the court."

More to come.

A Lack Of Knowledge Can Be A Dangerous Thing

There's an old saying that goes "beware of he who knows not that he knows not." Recently, I found myself in a predicament to which that adage is applicable, and thought I'd share the experience as an object lesson.

One of my clients issued a proposed, standard AIA Owner/Contractor agreement for signature. Nothing fancy, just the standard form of agreement. The Owner, who happened to be an attorney, delegated the negotiation of the agreement to her father, also an attorney. Neither father nor daughter were experienced in construction law. During the negotiations, I explained repeatedly a number of basic construction law concepts to the attorney-father such as the definition of substantial completion as well as how mechanic's liens work. It appeared that my verbal construction law primer was successful. Remember ... appearances can be deceiving. As time went on, the negotiations devolved into what seemed to be a pathetic exercise in futility.

To illustrate the absurdity of the negotiations, discussion was had ad nauseum as to whether the Owner's written approval was required in order to move an electrical outlet one inch to the right or to the left, if necessary! Sure, let's delay the Project for that while we try to track down the Owner who may have left her cell phone at home and cannot be contacted immediately. Oh, and then there was the demand that the Contractor provide its own manufacturing warranty for each and every screw, nail, piece of sheetrock and other like material which was purchased from a supply house and manufactured by a third party. Are you kidding me? I mean, really ... ARE YOU KIDDING ME?

Ultimately, it appeared that the terms of a Rider to the AIA contract had been agreed upon by the parties. Imagine my frustration when I was informed that the same issues which were resolved previously (to my mind, anyway) remained a "problem." When I asked why an attorney experienced in construction matters hadn't been retained to negotiate the contract, I was told "because my daughter wants me to do it ... I've never done this before, but the concepts are not too difficult." Oh, really? Then why did it take more hours than necessary to negotiate a basic, AIA construction contract? PUHLEEZE! My client walked away from the Project eventually, but relented when the Owner agreed to every term I proposed in the Rider to the contract.

This situation reminds me of the television commercial from a couple of years ago where a guy is trying to save some money, so he calls his surgeon to ask where he should make the initial incision for his self-performed appendectomy. Sheesh! The moral of this story is to retain experienced professionals to do the job. Just because someone has a professional license doesn't mean they are qualified to practice in a particular area. Getting the right professional from the get-go may expedite resolution of the matter and cost less in the long run. It's simply a matter of not being penny-wise and pound foolish.

NLRB Delays Posting Requirement ... Again!

Effective April 30, 2012, employers covered by the National Labor Relations Act (the "NLRA") must post a Notice advising their employees of their Union rights. The Notice must be posted in a conspicuous place where other notifications of workplace rights and employer rules and policies are posted. The Notice may be downloaded here. The posting date has been postponed previously, and the April 30th date is the most recent, extended deadline imposed by the National Labor Relations Board.

The NLRA covers union and non-union employers engaged in interstate commerce, and applies to most employers in the private sector. There are some exclusions under the NLRA, such as for those employed by federal, state or local governments or who are independent contractors. If you are unsure as to whether you are covered by the NLRA, it is recommended that you contact counsel to determine whether the new Notice requirement is applicable to your situation.

Among other things, the new Notice advises employees of their right to organize, bargain collectively, strike and picket, and to not join or remain a member of a union. The Notice also lists acts that are illegal for an employer to take against an employee, including but not limited to prohibiting talk or solicitation in support of a union during non-work time, questioning an employee about union support, engaging in activities that discourage employees from supporting a union, and threatening to close the workplace if employees choose union representation.

Failure to post the Notice may result in an extension of the six-month limitations period in which an employee may file an Unfair Labor Practice Charge, and may be construed as evidence of an employer’s anti-union animus. The additional extension stems from a legal challenge to the posting requirement, and further extensions may be in the offing. However, it appears (at least to this writer) that the requirement is likely to survive the legal challenge. So, employers ... get ready!

NLRB Postpones Effective Date Of New Rule

The National Labor Relations Board announced recently that it is postponing the effective date of its new, final rule requiring that all employers covered by the National Labor Relations Act post a notice informing employees of their right to organize. The new effective date is January 31, 2012. Apparently, implementation of the new rule was postponed in order to provide additional time for employers to prepare properly and to become better informed about its requirements. Stay tuned for more.

NLRB Says Employers Must Notify Workers Of Right To Unionize

Last week, the National Labor Relations Board (the "NLRB") issued a final rule requiring that all employers covered by the National Labor Relations Act post a notice informing employees of their right to organize. The new rule also sets forth a list of various types of unlawful employer conduct. It will be an unfair labor practice if an employer fails to post the notice. The requirement to post is effective on November 14, 2011.

Prior to the new rule, employers were required to post notices of workers' rights only if a violation of labor law occurred. Interestingly, labor organizations are not required to issue information about the rights to refrain from joining a union and to opt out of union dues obligations. Not a particularly equal playing field, eh? If the government is going to require employers to post a notice of workers' rights, then the notice should cover all such rights, not just the ones favorable to organized labor.

This is an important development in the field of labor relations as posting of the notice may give rise to an increase in union organizing campaigns, thereby increasing employer costs in a variety of areas. Presumably, a form notice will be available for posting from the NLRB. We shall see.