In our on-going efforts to ensure that our valued clients and contacts are kept abreast of legislative and other important changes, we are pleased to present our June 2009 issue of The KZR Alert. This Alert highlights significant recent developments at EEOC and under New York wage and hour and discrimination laws.

• EEOC Complaints Skyrocket: The Equal Employment Opportunity Commission ("EEOC") recently issued alarming statistics for FY 2008 reporting on charge filing at the agency. EEOC reports that in FY 2008 almost 95,500 complaints were filed, representing a more than 15 percent increase over FY 2007. Age cases rose most sharply, by almost 29 percent, followed by retaliation claims (22.6 percent), sex bias claims (14 percent), religious discrimination (14 percent), national origin (13 percent) and disability (10 percent). This increase is the second consecutive annual increase in charge filing after three years of relatively steady activity.

  The Commission believes that the drastic increase in age cases shows that older workers are suffering disproportionately during this recession. In our experience, however, age cases are often a “catch-all” for workers in no other protected class. Federal age laws protect any worker over 40 and state laws often are even broader.

  Since the statistics report filings only through September 2008, it is expected that FY 2009 will see an even greater increase in charge activity given the unprecedented levels of job loss since that time.

  Action Item: Employers should review their procedures for terminating employees, whether based on economic factors or individual performance, to ensure that they will withstand scrutiny if challenged. In particular, if implementing a reduction in workforce, be sure to determine whether the decisions will have an adverse impact on any protected class.

• Spread of Hours Pay - The Most Forgotten Obligation: Many New York employers are unaware of the “Spread of Hours” provision in the Labor Law. This provision states that when certain employees work more than 10 hours in a single day or work a split shift over 10 hours, they are entitled to an extra hour of pay. This obligation exists where an employee's rate of pay is at or close to minimum wage.

  To determine whether Spread of Hours pay is triggered, compute the total minimum wages due to an employee for the day and compare that amount to the compensation actually received by the employee. If the compensation actually received does not equal the minimum required, then an additional hour's pay at minimum wage is owed. Said another way, an employee who works 11 hours in a day, must earn an amount equal to minimum wage times 12. Otherwise, the employee must be paid an extra hour's pay for the day. The Department of Labor (“DOL”) interprets the obligation as requiring an hour's pay at minimum wage although some courts have held that the extra hour's pay must be at the employee's regular rate.

  Claims relating to Spread of Hours pay are becoming increasingly popular in burgeoning wage/hour litigation as well as increasing DOL investigation activity. These claims can be expensive for many reasons including that they can go back for six years and are often well suited to be brought as class actions.

  Action Item: Employers should review their payroll to determine if an employee paid at or around minimum wage is entitled to an extra hour's pay. To avoid a potential liability, employers may also calculate the minimum threshold for each job or work schedule and consider setting the pay scale at or above that rate.

• Defenses against Discrimination Charges No Longer Apply under the New York City Human Rights Law: Depending upon the size of the business, employers in New York City may be subject to federal, state and city laws against discrimination. Several years ago, the New York City law was amended to expand its scope of application that made the law significantly broader than its federal and state counterparts. Cases interpreting the amended law, however, had not yet come through the courts and so employers have been without clear direction on how this new law would affect workplace obligations.

  New York State courts have now had two opportunities to rule on aspects of the amended law -- and in both cases issued decisions which greatly expanded employee rights and limited employer defenses.

  • In Zakrzewska v. The New School, 598 F.Supp.2d 426 (SDNY 2009), the Court held that the affirmative defense to claims of harassment available under federal and state law is not available under the City's anti-discrimination laws. Under federal and state law, employers can defend against certain types of discrimination claims by showing that the employer took specific proactive measures to prevent and respond to discrimination and harassment in the workplace. This "roadmap" under federal and state law has been a significant impetus for employers to review their internal policies and procedures and provide in-house training for managers and staff.

    Although the Court found that the New School was able to establish all of the proactive conduct required by the defense, the Court held that the defense does not apply under the amended law and that the New York City statute imposes liability on employers even where an employer has followed all of these steps.

  • In the second case, Williams v. New York City Housing Authority, 872 N.Y.S.2d 27 (1st Dept. 2009), an employee claimed that she was subject to a hostile work environment. Since 1986, the United States Supreme Court has held that to be actionable, sexual harassment must be “severe or pervasive.” Finding that this excluded claims in which there was lesser but still demeaning conduct, the Court held that that liability can be imposed under the City’s law even where the conduct is not severe or pervasive.

  Under New York City law, therefore, employers are subject to a much stricter standard where they are liable for acts of any manager or supervisor, regardless of whether anyone else was aware of the conduct, and for the acts of a co-worker if a manager or supervisor knew or should have known of the conduct.

  Both of these cases are subject to appeal and may be overruled in the future, but for now, New York City employers must assume that they will apply to any claims against them.

  Action Item: Employers with New York City operations should review and strengthen their internal discrimination and harassment procedures and provide training to comply with the higher level of responsibility imposed under the City law.

As always, if you have questions about these or any other topics affecting personnel in your workplace, please do not hesitate to contact me.