Significant Employee versus Independent Contractor Developments

All companies must now be familiar with the Labor Department’s new rules defining independent contractor versus employee status for several reasons.  In addition to working for principals as an independent worker, many rep firms hire employees to assist in their businesses.  When are workers employees? When are they contractors?  These are differences in definitions that have huge legal implications.

In light of recent cases involving Uber drivers, and a push to recover more revenue (e.g., last year the Labor Department forced companies to pay tens of millions of dollars in back wages to more than 100,000 workers in the janitorial, temporary help, food services, day care, and hotel industries), the Labor Department recently issued new guidelines intended to help companies answer that increasingly complicated question.  The shift is to classify workers as employees, so EORA employers must be more careful because they owe a higher duty to employees than they do to independent contractors.  Additionally, contractors aren’t eligible for overtime pay, unemployment insurance or workers’ compensation. They typically pay all their Social Security taxes compared to employees, who split their cost with employers.

The new standard is broader than guidelines previously followed by many states and the IRS.  Now, a worker who is “economically dependent” on the employer should be treated as an employee; by contrast, a worker must be in business for themselves to be an independent contractor.  No longer is the focus primarily on how much control the employer has over the worker.

Thus, businesses who utilize independent sales personnel or contractors who supply administrative, supervisory, or managerial duties should speak to their accountants about whether they should modify the arrangement to make them employees.  Paying workers as employees could possibly minimize legal and tax exposure.  If both parties still desire independent status, preparing a simple document reflecting this could help the parties clearly understand the legal relationship.

If you need guidance on the legal consequences of employee versus independent contractor status, contact an experienced employment attorney who will help ensure that your rights are protected.  Call Steven Mitchell Sack at (917) 371-8000.

Beware of Signing Employment Contracts with Restrictive Covenants

Restrictive covenants are provisions in employment agreements that prohibit a person from working for a competitor after leaving his or her employer. The effect of such clauses varies greatly. In addition from limiting a former employee’s job opportunities, a restrictive covenant allows an employer to restrict the former employee from starting a business or forming a venture with others that competes against the former employer; contacting or soliciting former or current customers or employees of the former employer; and using confidential knowledge, trade secrets and other privileged information learned while working for the former employer. Many employers also place time and geographical restrictions in these covenants.

Believe it or not, such restrictive clauses are not always enforceable. Although every case is different, judges have been taking dimmer views of such attempts to restrict an employee’s livelihood. Whether or not such covenants are legal, defending lawsuits involving restrictive covenants is time-consuming and expensive, so employers should avoid placing such clauses in an employment contract. Many employers have a better chance of having their covenants enforced with a shorter geographic restriction, when such customers were procured by the company (not the employee) and when the prohibition period is no longer than 6-12 months.

Many employers have a tendency to “hang” such a clause over the individual’s head by threatening to institute legal action after a person’s resignation or termination. This can discourage employees from contacting prospective employers and customers in their industry. In many states, a covenant is not enforceable if it restricts a person’s right to work (especially if their trade is the only means of support); when the covenant is used by the company solely to protect its turf; when trade secrets are not involved; or if the person must work to support a family member with special needs or if their spouse is seriously ill. If your ex-employer threatens to sue you in order to enforce the covenant, be sure to contact an employment attorney immediately. During the trial, judges tend to be more sympathetic to the employees, so it wouldn’t be wise to badmouth your former employer in court.

Before an employee starts a job, they should carefully review and resist signing contracts with restrictive covenants, especially those that contain a liquidated damages provision (meaning that the company will ask the former employee to return part of their compensation or forfeit their benefits in the event they violate the agreement). They should also read what the covenant entails. If they feel the time restriction is excessive (i.e., two years), they should negotiate for a shorter timeframe (such as three months) and insist on the right to receive continued salary and other benefits while the restrictive covenant is in effect. Everything is negotiable before you sign on the dotted line.

Once your signature is on the contract, you may be bound by its terms. Also, be sure to obtain a copy of the agreement, then put it in a safe place. This saves you time and legal fees in trying to find it when you resign or are terminated.

If you are asked to sign an employment contract that contains a restrictive covenant, please contact an experienced employment law attorney first. Call Steven Mitchell Sack at (917) 371-8000.

NYC Employers Fined for Not Allowing Employees Sick Leave

In 2014, New York City Mayor de Blasio signed into effect the Earned Sick Time Act, and later approved further amendments that would offer employees greater protection by expanding the Act.  Recently, companies such as Best Buy and FedEx have been fined for not complying with the law that went into effect in April 2014.

Originally, the right to paid sick leave applied to businesses with 20 or more workers.  The new amendment decreased the amount of necessary workers to 15 as of (late) 2015, therefore including an estimated additional 355,000 employees. Also, certain economic benchmarks were used to implement paid sick leave, after the new amendments were passed, economic benchmarks are no longer an issue.  Additionally, another amendment provided that the definitions of family members were expanded to include grandparents, grandchildren and siblings; providing immediate coverage to employees who would otherwise have been “phased in”; and removed the exemptions that applied to the manufacturing sector.  In total, approximately 500,000 workers who did not previously have paid sick leave acquired it as a result of the new legislation.

FedEx was recently fined $33,600 for violations.  An employee complaint launched an investigation that revealed workers were denied sick leave between April 1, 2014 and December 7, 2014.  As a result, FedEx was required to credit sick leave to 165 employees and pay out $15,000 in restitution to another 30 employees.  In addition, other employers in New York such as Best Buy, American Girl Place, Primo Cappuccino, Lismir Cards and the East Harlem Council for Human Services have all been fined for noncompliance.

Many workers’ advocates celebrated the law’s expansion which prevents workers from having to choose between their jobs and their health, or the health of their family members.  Low wage workers no longer need to fear being fired as a result of taking a sick day.

If you feel you have been wrongly denied sick leave, contact an experienced employment attorney who will help ensure that your rights are protected.  Call Steven Mitchell Sack at (917) 371-8000.

The Zika Virus and Workers’ Compensation

The Zika virus, which was originally identified in 2015, has spread to approximately 33 countries.  Many of the countries are in the Americas.  Recently, the World Health Organization has announced an international health emergency because it is now thought the virus is linked in causing microcephaly.

Microcephaly is a condition in which babies are born with developmental issues and small heads.  The virus has also been linked to Guillain-Barre syndrome, an autoimmune disorder that can cause paralysis.  With these possible symptoms and concerns, employers must be careful when sending employees into Zika-infected areas.

When tasked with a job duty requiring possible exposure to a serious illness, workers may be hesitant or even unwilling to complete the task.  Many positions are at-will, meaning that employers may terminate employees at any time.  Workers may fear that refusing to complete a task which may expose them to an illness will result in termination.

According to the Occupational Safety and Health Act, employees have the right to refuse participation in a dangerous task.  Going to a dangerously infected area most likely would be considered a dangerous task, especially for pregnant women.  Employers have the right to terminate employees unless the task poses an immediate risk of death or serious injury.  Whether Zika-infected areas meet the immediate risk of death or serious injury requirement would be a question of fact for a court or jury to decide.

If you have concerns regarding employment law issues, contact an experienced New York employment law attorney who can ensure that your rights are protected.  Call Steven Mitchell Sack at (917) 371-8000 or email him at sms@StevenSack.com.

Attorney General Schneiderman Announces $46,000 Settlement with C&S for Firing Employees Injured on the Job

Attorney General Eric T. Schneiderman announced on July 22 of last year a settlement of $46,000 with C&S Wholesale Grocers for terminating employees who were injured on the job. The settlement followed an investigation by the Attorney General into C&S Wholesale Grocers, popularly known as “C&S”, the largest wholesale grocery company in the country.

The investigation followed an appeal in which the Attorney General’s Office successfully represented the Worker’s Compensation Board. The dispute concerned C&S’s written company policy of firing employees who were injured in a “preventable accident” during their initial 90-day employment probationary period. New York State Worker’s Compensation Law (WCL) §120 prohibits employers from termination of or retaliation against employees who claim or attempt to claim Worker’s Compensation benefits. The Appellate Division in July 2013 upheld the Worker’s Compensation Board’s decision that C&S’s policy was unlawful because it prevented probationary employees from seeking care and compensation for work-related injuries. Read more

Steve Sack to Discuss Proposed Worker Schedule Rules for Seattle Employers on “Fox & Friends”

Steven Mitchell Sack, “The Employee’s Lawyer,” will appear on “Fox & Friends” on Saturday, February 27 at 6:45 a.m. to discuss the new rules that are being proposed in Seattle on how companies establish their employees’ work schedules.

The Seattle City Council recently proposed a set of rules that shifts the power away from employers when it comes to how employees are not only paid but scheduled to work. Although it is still being drafted, the proposed ordinance would guarantee workers at least eleven hours of downtime between shifts, allow workers to receive their work schedule two weeks in advance or else be paid time-and-a-half if shifts are added inside that timeframe and require employers to pay employees for a few hours of work not performed if shifts are taken away.

This 11-hour downtime provision in the bill is to prevent the practice of “clopenings,” in which employees who stay late at night to close are also asked to open up the store the next day. The city also ratified raising the minimum wage to $15 an hour.

Fox News Channel can be seen on Channel 26 (cablevision). Channel 360(DirecTV), Channel 205 (DISH Network), Channel 315 (RCN Cable). Channel 44/202 (Time Warner), and Channel 118/1543 (FiOS).

New York City Calls Uber Drivers Freelancers

New York Uber execs are off the hook; the drivers they employ are now considered freelancers, not employees, thanks to a statement by Meera Joshi, chairwoman of New York City Taxi and Limousine Commission.

New York allows drivers to work for several companies simultaneously, curbing their risk for unemployment or inconsistent income. “We have wholeheartedly supported driver flexibility as independent contractors when we allow them, much to the consternation of the industry, to drive for several bases,” Ms. Joshi said in a Bloomberg Television interview.

Uber Technologies Inc., founded in San Francisco, is a civilian-driven and rideshare taxi service, and the first of its kind. Since 2009, several companies including Gett and Lyft have developed similar smart phone apps for civilian taxi service in cities around the world. Uber in New York City has suggested that since drivers only connect with passengers through a company app and rely on tips for their wages, they are independent contractors, not employees, of the company. Joshi expressed agreement with Uber’s view. “A driver is not [just] an Uber driver,” she said. “That’s a flexibility the driver is entitled to.”

The city’s view comes in contrast to a California Labor Commission ruling last month that a company driver must be considered an employee and therefore entitled to minimum wage, overtime, worker’s compensation, and reimbursement for work-related expenses, including out-of-pocket gas, maintenance and car insurance. The California Labor Commission’s ruling said Uber drivers are entitled to these benefits as an employee of the company, favoring former San Francisco Uber driver Barbara Ann Berwick, who won over $4,000 in the lawsuit.

If you have questions about your employee rights, contact an experienced attorney who will fight for your right to receive compensation and care for injuries sustained on the job. Contact an experienced New York Employment Attorney today.  Call Steven Mitchell Sack at (917) 371-8000 or email him at sms@StevenSack.com. You can also visit his website at www.theemployeeslawyer.com.

How Should Potential Employees’ Criminal Record be Considered?

It is increasingly difficult for potential employees to find job positions after they have been arrested or convicted of a crime. According to the U.S. Equal Employment Opportunities Commission, Title VII of the Civil Rights Act of 1964 defines parameters of the hiring process to avoid discrimination, including whether to conduct a criminal background check and how to weigh those applicants who have an arrest or conviction record. Title VII of the Civil Rights Act of 1964 prohibits employers to discriminate based on an applicant’s race, color, natural origin, sex, or religion. It is important to adhere to these guidelines in order to be an equal opportunity employer.

If an employer checks the criminal background of a potential employee, it is important for the employer to understand the difference between an arrest record and a conviction record. Title VII stresses that an arrest is not dispositive of actual criminal behavior. The American justice system treats those accused of crimes as innocent until proven guilty in a court of law, and so employers should not consider an arrest as evidence the potential employee committed the alleged acts.
However, in the case of a conviction, it is permissible for the employer to consider the potential employee as having actually carried out the acts convicted of. This can work against potential employees because convictions do not entirely equate to the person having committed the crime. In a court of law, a plea deal carries the same meaning of conviction as if the defendant went through a trial and was convicted. There have been many times when a defendant has pled to a lower charge to avoid the threat of a more serious conviction after a trial, or where the defendant does not understand the process and feels they have no choice but to accept a plea deal, or is unable to afford the time or money in proceeding to trial. Therefore, it is possible for applicants to be refused a position whether they actually committed the crime or not.
Title VII encourages an employer to conduct an “individualized assessment” of a potential employee. A suggested screening process is to look at the nature of the conviction, when it occurred in relation to the criminal background check, and the type of job the applicant is being considered for. There are times when the conviction record can be solely relied on in making the hiring decision, and this can even extend to underlying behavior in an arrest record if the employer feels the alleged behavior makes the applicant “unfit” for the specific position.
If a potential employee’s criminal record is considered as a factor in whether to hire or not, the employer should inform the applicant during the interviewing process. If you are an individual with an arrest or conviction record, an experienced employment attorney can help you in approaching potential employers and how to handle criminal background checks. If you are an employer, an experienced employment attorney can help you understand Title VII better, and how to go about the hiring process when interviewing applicants with arrest or conviction records. For these and other employment law concerns, please contact employment attorney Steven Mitchell Sack at 917-371-8000. Read more

New Legislation Protects Homeowners and Workers Involved in Mold Abatement

New York State Governor Andrew Cuomo signed a bill to protect workers and homeowners who are involved in mold assessment, remediation, and abatement on residential property. The law modifies a licensing requirement for contractors and enforces Environmental Protection Agency standards when dealing with mold.

Black mold can cause serious health complications, most commonly affecting the pulmonary, respiratory and immune systems. The new law protects homeowners by ensuring their contractors are legally licensed and formally trained. Mold removal employees also benefit with employer-provided personal protection equipment, including N-95 masks, long gloves, and protective goggles in accordance with EPA guidelines.

“This is a great step in the right direction,” New York State Senator Diane J. Savino said. “We will be able to ensure that all New York City contractors, as well as our average New Yorkers, are adequately equipped and trained [for] various jobs dealing with mold.”

The new law also protects homeowners from fraud by requiring a mold assessment independent of the remediation contractor, posted notice of the project and the contractor’s license, and a follow-up independent assessment of the work done.

“Many Superstorm Sandy victims unfortunately found that those who claimed to fix their mold problem were actually unqualified scammers who took their money and left their homes in [a] dangerous condition,” Assemblyman Todd Kaminsky said. “This bill establishes that those who are given licenses for mold inspection and remediation will be duly qualified to perform those tasks.”

New licenses will be issued by the State Department of Labor following completion of a thorough training program.  Contractors are prohibited from advertising and operating without a license. Failure to comply or violating the law will result in civil penalties ranging from $2,000 to $10,000.

You have the right to work in a healthy environment. If your employer is not compliant with the law or forces you to work in unsafe conditions, contact an experienced employment attorney who will strive to ensure that your rights are protected. Contact an experienced New York Employment Attorney who will get you the compensation you deserve. Call Steven Mitchell Sack at (917) 371-8000 or email him at sms@StevenSack.com. You can also visit his website at www.theemployeeslawyer.com.

Investigation of Employee’s Social Network Sites

In today’s technology driven society, almost everyone has some type of social media account.  While most young people think nothing of the reflection your page might have regarding prospective employment, it is estimated that three-quarters of employers look at applicants’ Facebook presence to see what they’re doing outside of work.  While CareerBuilder.com estimates approximately 1 in 10 young people have been denied jobs based off their Facebook postings, there are laws that protect a worker’s privacy when it comes to what these employers may take into account when selecting a new hire.

An excerpt from author Steven Sack’s book The Employee Rights Handbook, describes the laws surrounding employer’s growing curiosity to search current and prospective employee’s social media pages: “While no law prohibits employers from searching online social network sites to conduct background checks of job applicants, some states, including New York, have laws prohibiting companies from refusing to hire workers as a result of legally permissible recreational activities (such as the use of alcohol or cigarettes) before or after the work day.”

Sack later advises “Be aware that if you are denied a job because you post negative comments about an employer’s labor practices, this may violate the National Labor Relations Act.  You may also have a viable lawsuit resulting from a breach of your privacy rights in this area.” In addition, you may also have protection from the First Amendment, which protects workers from being fired for posting complaints about their jobs or employers.  In a recent case, a teenager’s position was revoked by her employer the day before she was to begin work, because she tweeted complaints about the position.

If you feel you have been wrongly denied a job based on your social media presence, or you feel your privacy rights have been violated during your employment, contact Steven Mitchell Sack, an experienced New York employment law attorney.  Call (917) 371-8000 or visit  www.theemployeeslawyer.com.