New York State Employers Face Strict New Equal Pay and Sex Discrimination Laws
New York Governor Andrew Cuomo recently signed a series of bills entitled the “Women’s Equality Agenda” that significantly amend the State’s equal pay, sex discrimination, harassment and other laws to provide additional protections for women in and outside the workplace. Among other changes, the amendments broaden the definition of “equal work” for equal pay, add “familial” status as a protected class, require employers to accommodate pregnant workers, authorize treble damages for willful violations, provide sex discrimination plaintiffs with a new right to attorneys’ fees and apply the law’s prohibition on sexual harassment to all employers regardless of size. The amendments, which we briefly summarize below, take effect on January 19, 2016.
Expanded Definition of Equal Pay
New York’s Labor Law, as originally enacted, closely followed the Federal Equal Pay Act in requiring employers to pay women the same as men for work that required “equal skill, effort and responsibility” but permitting pay differentials for seniority, merit and any factor “other than sex.” The amended Labor Law now limits this last requirement to “a bona fide factor other than sex, such as education, training or experience,” and requires any differential to be job related and consistent with business necessity. At the same time, the law excludes pay differential policies that (i) cause a disparate impact on the basis of sex, (ii) where an alternative employment practice exists that would have served the same business purpose and not produced such a differential; and (iii) the employer refused to adopt the alternative practice.
In addition, the amendments expand on the requirement that women are entitled to the same pay as similarly situated men working in the “same establishment” by altering the definition of “same establishment” to include “workplaces located in the same geographical region, no larger than a county.” Presumably, employers with multiple operations located in, for example, Manhattan will be responsible for ensuring pay equity between male and female employees performing the same work across all locations within such an “establishment.”
Right to Discuss Wages
The amendments also prohibit employers from installing a wholesale restriction against asking about, discussing or disclosing wages. While the National Labor Relations Act, which applies to most employers, already mostly prohibits this, the amendments make it an explicit violation of New York’s Labor Law. Employers are permitted, however, to create and implement written workplace policies to all employees that establish reasonable workplace and workday limitations on the time, place and manner for inquiries about, discussion of, or the disclosure of wages. The law says that such policies must be consistent with the standards promulgated by the labor commissioner (which will come in due time) and be consistent with all other state and federal laws. The law does include one specific example, however: employers may prohibit an employee from discussing or disclosing the wages of another employee without the other employee’s prior permission. Further, the law allows employers to prohibit employees whose job is to work with employee compensation data from disclosing that information in most circumstances.
Attorneys’ Fees and Liquidated Damages
The amendments authorize liquidated damages “up to three hundred percent of the total amount of wages found to be due for a willful violation.” That’s: 300%!!!! Obviously, this penalty could be quite substantial in some instances and should encourage all employers to take a proactive stance on ensuring compliance with the amendments. Additionally, the amendments entitle prevailing plaintiffs to recover their attorneys’ fees with respect to “a claim of employment or credit discrimination where sex is the basis of such discrimination.” The amendments include a corollary to this provision permitting a prevailing employer to recover attorneys’ fees, but only if the claim was frivolous and commenced or continued in bad faith.
Discrimination Based on Familial Status
The amendments also add “familial status” as a protected class under the employment discrimination provisions of the State’s Human Rights Law. The law previously only prohibited discrimination on the basis of family status in housing and credit decisions. Under the amendments, employers are prohibited from discriminating against anyone who is pregnant, has a child or is in the process of securing legal custody of a child. Further, this requirement applies at all stages of employment, including the interview and hiring process and to decisions regarding promotions, discipline and termination.
Accommodations for Pregnancy-Related Conditions
Consistent with existing New York City law and certain requirements under the Americans with Disabilities Act, the amendments now require employers to make accommodations for employees with pregnancy-related conditions. Such accommodations typically include modified work schedules, rest and break periods and reassignment to less physically strenuous tasks where the accommodation does not impose an undue hardship on the employer.
Sexual Harassment Laws Apply to All New York Employers
Finally, the amendments eliminate the requirement that only employers with four or more workers are subject to the Human Rights Law’s prohibition on sexual harassment. Under the new law all employers, regardless of size, can be liable for sexual harassment. The amendments do not, however, eliminate the four-employee threshold for other types of harassment.
Takeaways
To the extent the Women’s Equality Agenda merely reinforces requirements under existing law and enhances the penalties and remedies available for violations, it should incentivize New York employers to step up compliance efforts and ensure that current policies intended to prevent sex discrimination and harassment are up-to-date and are having their intended effect. With respect to the more substantive changes the amendments have ushered in, however, particularly the new requirements for establishing equal pay, employers will need to overhaul existing policies and practices.
Like the recently-enacted California Fair Pay Act, the New York amendments increase the pressure on employers to justify pay disparities between the sexes for equal work. However, unlike California’s law, the amendments do not define “same establishment” to include facilities outside the state or entirely abandon the “equal work” standard for the more amorphous and subjective concept of “substantially similar work.” Thus, while we expect compliance with the amendments will be manageable for most employers, now is the time to take a close look at variations in pay among male and female employees and prepare to adjust any discrepancies that are not supported by clear, objective business criteria.
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