New York Employment Lawyer Blog

Under the New York State Labor Law, it is illegal for an employer to require an employee to pay back wages paid for days the employee didn't work.

Section 193(1) of the New York State Labor Law prohibits employers from making any deductions from an employee's wages except those made (a) in accordance with any other law, or (b) for the benefit of the employee and authorized in writing by the employee. Such authorized deductions are limited to payments for insurance premiums, pension or health and welfare benefits, contributions to charities, payments for U.S. savings bonds, payments for union dues and assessments, and "similar payments for the benefit of the employee."

In other words, while an employee may authorize an employer to take away or subtract wages, the clear language of section 193(1)(b) limits the types of deductions to those enumerated and to "similar payments."

In Angello v. Labor Ready (2006), the New York Court of Appeals held that "subtracting from wages a [payment] that goes directly to the employer or its subsidiary violates both the letter of the statute and the protective policy underlying it." The Court then noted that all the deductions authorized by Labor Law §193(1)(b) are either "monetary or supportive," and as such, the term "similar payment" must also be either "monetary or supportive" to be allowed. The "monetary" deductions are all investments of money for the later benefit of the employee, such as deductions for insurance premiums, pension or health and welfare benefits and payments for United States bonds. The "supportive" deductions are all investments used by someone other than the employee or employer to support some purpose of the employee, such as contributions for charitable organizations or payments for dues or assessments to a labor organization.

Consequently, requiring an employee to pay back wages already paid for days off from work does not benefit the employee in any way, and is thus illegal under New York Labor Law. The same reasoning holds for any attempt by the employer to deduct payments from wages to cover the cost of anticipated future use of unpaid leave.

Additionally, although section 193(2) provides that the employer cannot require the employee to make any payment by a separate transaction that would be prohibited as a deduction, in Huntington Hospital v. Huntington Nurses Association (E.D.N.Y. 2004), the Eastern District of New York held that "such overpayments could be sought in a separate proceeding." Therefore, while an employer may not make any deductions from an employee's wages to recover overpayments, employers may seek relief in a separate proceeding against the employee, i.e. an action in civil court.

To limit potential liability, we recommend that all New York employers consult with a New York wage and hour attorney before making any wage deductions that are not explicitly authorized by New York Labor Law §193.

Pursuant to federal law, it is unlawful for any employer to knowingly hire a worker who is not authorized to work in the United States. To comply with the law, employers are required to verify the identity and employment eligibility of all employees by completing the I-9 Employment Eligibility Verification Form ("Form I-9") for each new hire. The law requires that the employer complete a Form I-9 for all new hires, regardless of whether employer believes the new hire is undocumented. In fact, employers are required to verify the employment eligibility of all employees within three days of hire and must retain the completed Form I-9 for at least three years or one year after employment terminates, whichever is later.

The Immigration and Nationality Act ("INA") contains an anti-discrimination provision, which protects employees against document abuse discrimination as it relates to Form I-9. Document abuse discrimination occurs when an employer improperly requests that an employee produce more documents than are required by Form I-9 to establish the employee's identity and employment authorization. It can also occur when an employer improperly requests that an employee present a particular document, such as a "green card," to establish identity and/or employment authorization, when an employer improperly rejects documents that reasonably appear to be genuine and belong to the employee presenting them, or when an employer improperly treats groups of applicants differently when completing Form I-9, such as requiring certain groups of employees who look or sound "foreign" to produce particular documents the employer does not require other employees to produce.

As long as the documents presented are listed on the list of acceptable documents and appear to be genuine on their face and to relate to the person, the employer must accept them. Failure to do so constitutes illegal document abuse discrimination.

The INA's provision against document abuse discrimination covers employers with 4 or more employees, and protects all employment-authorized individuals.

If an employer is found to have engaged in document abuse discrimination under the INA, the employer may be ordered to hire or reinstate, with back pay, individuals directly injured by the discrimination, post notices to employees about their rights and about employers' obligations, and/or educate all personnel involved in hiring about complying with the anti-discrimination laws. The court may also award attorney's fees to prevailing parties if it determines that the losing parties' argument is without foundation in law and fact.

For more information and/or assistance with respect to the I-9 process as well as the anti-discrimination provisions contained in the INA, please contact a New York employment attorney today.

Lawsuits brought under the FLSA seeking unpaid minimum or overtime wages are typically brought as "collective actions," pursuant to 29 U.S.C. § 216(b), not Federal Rule of Civil Procedure 23 ("Rule 23"). However, in the same federal lawsuit, plaintiffs will often include state law claims, bringing them as class actions under Rule 23.

The plaintiffs, in Myers v. Hertz Corp. (October 27, 2010), were Station Managers classified as exempt from receiving overtime under the executive exemption. Although their job titles were "managers," the plaintiffs claimed that their management duties formed only a small part of their overall duties. Rather than analyzing each individual station manager's duties, the defendant determined that the position was exempt because it entailed primarily managerial responsibilities involving supervision of workers, enforcement of company policies, management of inventory and other tasks.

In this case, a collective action under the FLSA was initially sought and denied by the district court. In denying the motion, the district court ruled that the FLSA's similarity analysis required a highly individualized assessment of the duties of each potential plaintiff station manager, making a collective action improper.

This led the plaintiff to pursue class certification under Rule 23 based on alleged violations of unpaid overtime under New York Labor Law § 191. The court denied this motion too, holding that the plaintiff failed to satisfy Rule 23's commonality, typicality and predominance requirements because the main issue to be decided in the case, whether each potential plaintiff was properly classified as an exempt employee, required a fact-intensive inquiry.

The plaintiff appealed the decision to the Second Circuit, which affirmed the district court's denial of class certification under Rule 23. The Court noted the applicability of the exemption requires an analysis of the actual duties performed by each manager. According to the Court, more individualized proof than generalized proof would be necessary in this matter to resolve the factual and legal questions for each plaintiff station manager. As the Court held, "[t]he existence of a blanket exemption policy standing alone, is not itself determinative of the 'the main concern in the predominance inquiry: the balance between individual and common issues.'" The Court further explained that such a policy does not establish whether all plaintiffs were actually entitled to overtime pay, and that the question of entitlement to overtime pay is still answered by examining the employee's actual duties.

Although the Court held it did not have jurisdiction to review the district court's refusal to conditionally certify the plaintiffs' FLSA claims, it nonetheless provided guidance with respect to the two-step standard district courts should apply to motions seeking certification of a collective action under § 216(b) of the FLSA.

To obtain conditional certification under the FLSA (allowing notice to be sent to potential opt-ins), the Court stated that plaintiffs must "make a modest factual showing that they and potential opt-in plaintiffs together were victims of a common policy or plan that violated the law." This typically occurs before substantial discovery has been completed and was described by the Court as a "low standard" of proof. However, the court cautioned that while it's a low standard, it cannot be satisfied simply by "unsupported assertions."

At the second stage, normally after discovery has taken place, the Court must determine whether the collective action should continue to go forward as a collective action or whether it should be decertified. The Court does this by determining whether the plaintiffs who have opted in are in fact similarly situated to the named plaintiffs.

The determination as to whether an employee is exempt under the FLSA and New York Labor Law can be especially difficult and confusing, and as such, all New York employers should always first consult with a New York overtime attorney.

Although an employee handbook provision disclaiming the handbook as a contract would normally prevent the handbook from being interpreted as an enforceable contract, a separate signed employment agreement incorporating the terms of the handbook will make those terms enforceable.

In Currier McCabe & Assoc. v. Maher (July 15, 2010), the employee signed an employment agreement in which he acknowledged that he had read the handbook and agreed to its terms. However, the handbook included a disclaimer providing that the "[p]olicies set forth in this handbook are not intended to create a contract, nor are they to be construed to constitute contractual obligations of any kind or a contract of employment between [the employer] and any of its employees." As the Court acknowledged, "[the disclaimer's] stated purpose [was] to prevent the policies, in and of themselves, from being construed as an implied employment contract."

The handbook also included a section in which the employer agreed to pay for educational and training courses for its employees, but that first year employees who left their positions within one year of obtaining such training were required to repay the educational expenses paid by the employer.

The employee in this case took graduate classes, and pursuant to the terms in the handbook, the employer paid his tuition. The employee then resigned from his position during his first year of employment and within two (2) months after completing his degree program. He thereafter refused to reimburse the employer for his tuition and related expenses, causing the employer to sue for breach of contract.

The employee argued that the disclaimer prevented any of the handbook's terms, including the tuition reimbursement provision, from being contractually binding. The employer argued that the employee's express agreement to the terms and conditions of the handbook rendered the disclaimer legally irrelevant.

The Court found that the written agreement set "forth the terms of [the employee's] employment and, regarding the handbook, provides only that [the employee] also agrees to its terms and conditions. The handbook's initial provision stating that its 'policies' are not intended to create a contract is merely a disclaimer." The employee's execution of a separate contract in which he expressly agreed to the handbook's terms created his contractual obligations. "[The employee's] express agreement to the handbook's terms and conditions reasonably implies that the parties did not intend the disclaimer to make this agreement ineffective but, rather, intended the handbook's substantive terms and conditions -- including the tuition reimbursement provision -- to be contractually binding."

A New York federal court recently held, in Guinup v. Petr-All Petroleum Corp. (August 23, 2010), that because Plaintiff's primary duties as Store Manager were managerial in nature, Defendant properly classified Plaintiff as exempt under the Fair Labor Standards Act ("FLSA").

The FLSA states that an employee who works more than 40 hours in a given week must receive overtime pay of at least one and one-half times his regular rate of pay for each hour worked over 40 in that week. However, if the employee is employed in an executive capacity, he is exempt from overtime pay.

The U.S. Department of Labor set forth the following requirements for application of the executive exemption: (1) the employee is compensated on a salary basis at a rate of not less than $455 per week; (2) the employee's primary duty is management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof; (3) the employee customarily and regularly directs the work of two or more other employees; and (4) the employee has the authority to hire or fire other employees or the employee's suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight.

In this case, Plaintiff worked as the Store Manager of Store 360, a combination convenience store and gas station. Throughout her employment with Defendant, Plaintiff's supervisor only visited her store, on average, once per week for between one hour and half the day. Although there were other employees who also worked at Store 360 at various times, as Store Manager, Plaintiff was the only exempt, salaried employee at her store. All of the other employees were non-exempt employees who were paid on an hourly basis.

Plaintiff argued that she was not exempt under the FLSA because her primary duty as Store Manager was not the management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof.

With regard to this requirement, the Court laid out four factors to be weighed in determining an employee's primary duty: (1) the relative importance of the exempt duties as compared with other types of duties; (2) the amount of time spent performing exempt work; (3) the employee's relative freedom from direct supervision; and (4) the relationship between the employee's salary and the wages paid to other employees for the kind of nonexempt work performed by the employee.

In this case, Plaintiff performed a number of managerial tasks, including interviewing and hiring new employees, scheduling, training, writing performance evaluations, reporting employee and customer injuries to corporate, discussing sales performance and promotions with corporate, conducting surveys of competitors' gas prices and convenience store business, and controlling "shrink." Plaintiff was also responsible for making recommendations to corporate regarding product ordering and pricing, new hire pay rates, employee discipline and termination, and certain Store 360 security measures. Furthermore, Plaintiff accepted phone calls at home from her subordinates at Store 360 regarding incidents that arose at Store 360 when she was not working.

Therefore, while Plaintiff also performed a number of non-managerial tasks and may not have been the only employee at Store 360 who trained new employees and corrected employee performance problems, the Court found that Plaintiff's managerial functions were more important to the success of Store 360 than her non-managerial functions. Simply put, Store 360 could not have operated successfully unless Plaintiff performed her managerial functions, such as hiring, training, and scheduling employees, completing the daily paperwork, and regularly reporting various day-to-day issues to corporate.

Moreover, the Court made clear that a local store manager's job is no less managerial for FLSA purposes simply because she has an active district manager. A district manager's periodic visits do not negate a finding that the store manager operates free from supervision when the district manager is absent.

Although this time the Court found in favor of the employer, the determination as to whether an employee should be classified as an exempt executive can be especially difficult and confusing, and as such, employers should always first consult with a New York City wage and hour attorney.

On August 31, 2010, New York Governor Paterson signed into a law an amendment to the New York State Civil Rights Law (Section 79-n), which just took effect on October 29, 2010. The new law requires New York employers to provide employees who are in same-sex committed relationships the same bereavement and/or funeral leave that they provide to heterosexual married employees. The law is applicable to all employers in New York State who provide bereavement leave benefits to employees, regardless of the size of the employer.

Under the new section of the Civil Rights Law, an employer who offers its employees funeral and/or bereavement leave for the death of a spouse, or the death of the parent, child or other close relative of the spouse, must now offer funeral and/or bereavement leave for the death of a "same-sex committed partner," or the death of the parent, child or other close relative of the "same-sex committed partner." The new amendment is not applicable to domestic partners generally, but instead, is limited to "same-sex committed partners." The statute defines "same-sex committed partners" as couples that are "are financially and emotionally interdependent in a manner commonly presumed of spouses." Thus, if an employee suffers the death of a same-sex partner, or of the partner's parent, child, or other relative, the employee will be statutorily entitled to the same type of unpaid leave available to employees in state-sanctioned heterosexual marriages.

This law does not, however, require employers to provide bereavement and/or funeral leave to employees. Instead, it ensures that if bereavement leave is offered to employees as a benefit, then an employee who is in a same-sex committed relationship is permitted to use bereavement leave in the same manner as if the employee's partner were his or her spouse. Simply put, it explicitly prohibits employers from discriminating against "same-sex committed partners" in the granting of bereavement and/or funeral leave.

All New York employers that currently offer bereavement and/or funeral leave are advised to update and revise their employee handbooks and personnel policies to ensure that they are in compliance with the new law. Moreover, employers should always consult a New York City employment discrimination attorney when deciding whether, pursuant to the company's policy, an employee in a same-sex relationship is entitled to funeral and/or bereavement leave.

Under the Occupational Safety and Health Act of 1970 ("OSH Act"), employers are responsible for providing safe and healthy workplaces for their employees. Section 11(c) of the OSH Act, which is enforced by the Occupational Safety and Health Administration ("OSHA"), prohibits retaliation against employees for filing a health or safety complaint or for exercising a wide range of other rights afforded to them by the OSH Act. Basically, it protects an employee's right to file a complaint with OSHA or to bring health and safety issues to the attention of his or her employer without fear of termination or other retaliation.

On October 14, 2010, OSHA announced that it obtained a consent judgment ordering The John Galt Corp. and two of its former managers to compensate a worker who was fired for raising a health and safety issue during an asbestos removal project that the company oversaw in New York City.

In this case, the worker alleged that he had been fired after requesting additional respirator cartridges for himself and for fellow workers performing asbestos removal at the site. OSHA brought a legal action, and as a result, the defendants signed a consent judgment that orders them to pay the worker $55,000 in back wages and expunge all references to suspension or dismissal from his personnel file. The judgment also prohibits the defendants from discriminating against employees who file a complaint with OSHA, participate in an OSHA inspection or otherwise exercise their rights under Section 11(c) of the OSH Act.

On October 20, 2010, OSHA announced that it filed a lawsuit against Promesa Systems Inc., a New York City nonprofit organization providing care to individuals with developmental disabilities, for allegedly firing an employee who voiced workplace safety and health concerns and filed a complaint with OSHA. A few days after the employee advised the defendants that she would consult OSHA regarding an assignment that they had given her, the defendants suspended her during an internal investigation which included a review of her on-the-job performance. At the end of the company's investigation, the employee was fired. OSHA found evidence that the internal probe was used as a pretext to terminate the employee for her whistleblower actions.

The complaint seeks a judgment ordering all appropriate relief for the worker, including reinstatement, back pay with interest and compensatory damages, as well as prohibiting the defendants from future violations and having them post and comply with a workplace notice that they will not discriminate against employees who engage in protected safety and health activities.

It is always smart for employers to consult with a New York City employment attorney before terminating or disciplining an employee who has recently complained.

Pursuant to Title VII of the 1964 Civil Rights Act, "[e]very employer . . . shall post and keep posted in conspicuous places upon its premises where notices to employees, applicants for employment, and members are customarily posted a notice to be prepared or approved by the Commission setting forth excerpts from or, summaries of, the pertinent provisions of this subchapter and information pertinent to the filing of a complaint." Sec. 2000e-10.

Employers who fail to comply with this requirement may lose their right to a statute of limitations defense. In Wei Hong Zheng, et. al., v. Wong, et. al. (E.D.N.Y. 2009), an employee working in the restaurant of a hotel-casino in Atlantic City filed a complaint alleging that she had been discriminated against and fired because of her race, sex and/or national origin.

The statute of limitations for filing a complaint under Title VII is 300 days from the alleged discriminatory act. However, the employee in this case did not file her complaint until 364 days following her termination. The employer therefore filed a motion to dismiss on the ground that the Title VII claims were barred by the statute of limitations.

However, the employee argued that her claims were not barred because the employer failed to post the required Title VII notice and that, without the benefit of the mandatory notice, she was unaware of her rights under the law and did not learn of them until after she had consulted with an attorney.

The Eastern District of New York (New York federal court) found that the employer's failure to post the notice excused the two-month delay. The Court held that an employer's failure to post the required Title VII notices will equitably toll the 300-day limitations period until such time as the employee learns or reasonably should have learned of her rights through some other means.

Contact a New York City employment discrimination attorney to confirm that your company is complying with the mandatory notice requirements.