June 2017 Employment Law Update
HR TIP OF THE MONTH
Understand The Benefits of Severance Pay, The Law And How To Do It Right
Generally speaking, the law does not require payment of severance to a terminated employee unless the employer has contractually agreed to do so through some form of agreement or policy. As a result, some employers may question why they should offer severance pay. The most common answer is that the severance pay is conditioned upon the terminated employee providing a release of claims. Therefore, an offer of severance can be a cost-effective means for an employer to avoid the time, expense, disruptions and uncertainties that come with a lawsuit or threatened lawsuit. However, the request for a release of claims will trigger certain legal requirements and obligations. For example, under the federal age discrimination law, employees that are 40 years of age or older must be provided 21 days (and sometimes as much as 45 days) to accept the severance offer and 7 days to revoke their acceptance of said offer. Other laws may limit the employee’s ability to release certain claims. Employers should consult with their counsel to insure their severance agreements are legally compliant and to insure that they fully understand the impact of the law on said agreements.
Independent Contractor Protection Law In Effect In New York City As Of May 15
New York City’s Freelance Workers Protection Law went into effect on May 15, 2017. The law covers “freelance workers,” which includes independent contractors, but excludes lawyers, doctors and sales representatives. The law affords freelance workers who will provide an individual or business more than $800.00 in total services the right to a written agreement which must include:
- The name and address of the hiring party and the freelance worker;
- An itemization of all services the freelance worker will provide;
- The value of those services;
- The rate and method by which the worker will be compensated; and
- The date on which the hiring party must pay the contracted compensation or the mechanism by which such date will be determined (e.g., within twenty days of invoice)
Any individual or business that fails to comply with the law will be subject to the imposition of significant monetary damages.
New York City Passes Ban On Salary History Inquiries
Mayor Bill de Blasio has signed an amendment to the New York City Human Rights Law (“NYCHRL”) which makes it unlawful for employers to ask job applicants about their salary history or to rely on salary history during the hiring process. Not only does the law prohibit asking an applicant or the applicant’s current/former employer about the applicant’s salary, it also prohibits the search or review of public records to obtain such information. Employers may still tell applicants about the salary range for the position for which they applied, and nothing prohibits the employer from considering the applicant’s salary history if the applicant first volunteers such information. New York City employers should insure that their hiring processes, practices and forms are modified to comply with this new law. The law goes into effect on October 31, 2017.