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November, 2019
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Dear Clients, Colleagues and Friends,
 
Did we have autumn this year?  Because it seems like we went right from summer to winter. Thanksgiving is approaching very soon and then we quickly get to the end-of-year holidays. Enjoy all of the celebrations and family gatherings!
 
Here at M&B, as always, we are staying on top of all the new legal developments so you can relax and take it easy. As always, feel free to contact us with any questions by e-mailing cbook@mb-llp.com.
 
We are very pleased to welcome Jennifer Kim to our team! Jennifer is a recent grad of Cardozo Law School and a 2014 alumna of Brandeis University. Jennifer is very quickly acclimating, and working very hard to help our clients.
  
MINIMUM WAGE INCREASES FOR 2020

Minimum wage for all NYC employers will be $15 per hour for the upcoming year and will remain at $15 per hour. Large NYC employers who have already been paying their employees at $15 per hour should continue paying their employees appropriately. Smaller NYC employers who were paying their employees $13.50 per hour, pursuant to the 2019 minimum wage rate, must increase minimum wage payments for their employees to $15 per hour for 2020.
 
Starting January 2, 2020, for those in Nassau, Suffolk and Westchester, though, it goes up from $12 to $13 per hour. For the rest of NY State, it will go up to $11.80 per hour. And for our fine friends in NJ, minimum wage will increase to $11 per hour.
  


 

CLARIFYING NYC PROTECTIONS FOR FREELANCERS AND INDEPENDENT CONTRACTORS
 
NYC recently passed a law that will expand discrimination, harassment, and retaliation protections to freelancers and independent contractors. The amended law will also include freelancers, independent contractors, and other workers in the count towards the NYCHRL's requirement that employers of NYC must have four or more employees for the NYCHRL to apply to them. The new law will take effect beginning January 11, 2020.
 
The anti-discrimination, harassment, and retaliation protections of the NYCHRL will cover not only those individuals defined as "employees," but also freelancers and independent contractors, as is already the case for interns. We expect there will be more developments and additional guidance issued by the Commission to address some of the ambiguity of the new law.
 
As for the law's four-employee requirement, employers must include: (i) freelancers, independent contractors, and interns, as well as (ii) the employer's parent, spouse, domestic partner, or child, if they are employed by the employer (take note that these relatives are not protected by the NYCHRL). To be covered by the NYCHRL, employers must have four or more employees in their workforce starting from the period beginning 12 months prior to the unlawful discriminatory practice through the end of such discriminatory practice. It is important to keep in mind, however, that the gender harassment provisions of the NYCHRL apply to all New York City employers, whether or not they meet the four-employee threshold.

PROVIDING TIMELY AND SUFFICIENT COBRA NOTICES TO QUALIFYING EMPLOYEES CAN SAVE MONEY FOR EMPLOYERS
 
Generally, when an employee voluntarily or involuntarily leaves her job, he or she may be eligible to receive continued health benefits under the federal Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). Currently, employees in New York with employer-sponsored health plans can continue their healthcare coverage for up to 36 months under the federal COBRA law, plus additional coverage under New York's "Mini-COBRA" law.
 
Employers are required to provide COBRA notice to qualified employees. This notice provides information on the continuation coverage, when and for how long the coverage would be available, how it is provided and/or extended, and the name and contact information of the Plan Administrator, among other relevant and necessary information.  A model of this notice is provided by the U.S. Department of Labor (DOL): https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra

Though the process might seem straightforward, there have already been lawsuits against employers in Florida for their failure to provide this COBRA notice. One notable lawsuit filed this past August in Florida is a suit against Coca-Cola alleging that it did not properly notify qualified employees of their right to continuation coverage for themselves and/or qualified beneficiaries in their family through COBRA. Simply failing to provide qualifying employees this notice will result in a $110 per person per day statutory penalty.  
 
If such allegations hold up in court, employers will have to be more meticulous in reviewing their COBRA notices and making sure qualified employees are properly notified of their continuation coverage. When and if multiple allegations are brought alleging the COBRA notice violation and the notices are not provided in a timely fashion, causing coverage loss to employees, employers are at risk of racking up statutory penalties to be paid.
 
Employers should make certain to have strict procedures to timely provide COBRA notices to qualifying employees about their continuation coverage. Employers should also review current versions of their COBRA notices and make sure there are no deficiencies in the documents. Just a little more effort in establishing these practices will help employers save hundreds and thousands of dollars that they had no reason to lose.
  
NEW JERSEY EMPLOYERS MAY SOON BECOME DISINCENTIVIZED FROM USING INDEPENDENT CONTRACTORS
                        
NJ is aiming to make it the most difficult state in the US in which to maintain an independent contractor relationship. First, there is new legislation introduced to establish a new, and very difficult, test to demonstrate that someone is an independent contractor. Under the proposed legislation, for the purposes of all NJ employment laws (e.g., minimum wage, wage payment, overtime, unemployment, etc.), there would be a presumption that all individuals whom companies pay to perform services are employees, unless the company can demonstrate three elements: 
  • The individual has been and will continue to be free from control or direction over the performance of the service, both under the individual's contract of service and in fact; and
  • The individual's service is either outside the usual course of the business for which that service is performed, or outside of all the places of business of the enterprise for which they perform the service; and
  • The individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the work performed.
If the company cannot establish all three elements, then the worker is an employee and not an independent contractor.

Next, the state is taking efforts to provide greater benefits for independent contractors. Efforts to provide benefits to independent contractors would come in the form of contributions from "contracting agents", or businesses supplying independent contractors, to "qualified benefit providers" who will assign the contributions to the respective independent contractors entitled to each benefit, or contribution. Contracting agents that will be required to contribute such funds will be those that have used 50 or more independent contractors during 12 consecutive months within New Jersey. These funds will equal either 26 percent of the total fee collected from the consumer for each service performed by the contractor or six dollars for every hour the contractor performed for the consumer, whichever is lesser. Further, these contributions must be made to the qualified benefit provider at least every month and no later than 15 days after the end of the month in which the contractor's services were provided to the consumer.

Workers who are not covered by the bill would include any person who (1) contracts to solicit orders as a sales representative of the principal entity; (2) is bound to a collective bargaining agreement; (3) is involved in selling financial products or services; or (4) is licensed in the state to practice real estate.

Although these laws have not yet been enacted, there is a high likelihood that both will become law. In preparation for such possible enactment, NJ employers should review their current workforce, check for proper classification of its workers, and be prepared to potentially increase spending for utilizing independent contractors if deemed an eligible organization under the bill. Please contact us if you have any questions.

Moskowitz & Book, LLP  | cbook@mb-llp.com  | http://mb-llp.com/


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