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February, 2020
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New York State Plans to Heighten Regulations Surrounding 
Misclassification of Gig Economy Workers
Governor Cuomo has authorized a new task force, called the "Digital Marketplace Worker Classification Task Force," to propose stronger regulations surrounding the proper classification of workers. This move recognizes that gig economy workers are not eligible for benefits that full-time employees enjoy.   It is also influenced by the passage of California Assembly Bill , or the AB5, late last year, which demonstrated California's efforts to reshape the state's gig economy.  If this task force is unable to propose legislation by May 1, 2020, Governor Cuomo will delegate this responsibility to the New York State Department of Labor (NYSDOL).

The NYS task force will likely mirror some aspects of the California bill and use a variation of the ABC Test (3-factor test to classify workers as independent contractors) in its approach to making its recommendations. In short, the ABC Test in California provides that the employer must prove that the following three elements exist in order to classify certain workers as independent contractors:
  1. The worker is free from the control and direction of the employer in connection with the performance of the work, both under the contract for the performance of the work and in fact;
  2. The worker performs work that is outside the usual course of the employer's business; and
  3. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
NYC has already passed the Freelance Isn't Free Act in 2017, which protects freelancers from wage and hour violations. It is only a matter of time before NYS catches up to California. Meanwhile, NJ failed to get a similar bill pasted last month that essentially mirrored AB5 to amend the state's current ABC Test, which, if passed, would have created stricter rules for misclassification for employers. Though it failed, further revisions to this NJ bill will be made in hopes to have it passed on its next attempt.
All in all, NYS and NJ may not be trailing too far behind California in their efforts to regulate employers' practices of hiring and utilizing independent contractors. In preparation for these forthcoming changes by each state's lawmakers, NYS and NJ employers should review their relationships with their current independent contractors and ascertain whether they are accurately classified as independent contractors as opposed to employees. If you are a NYS or NJ employer with any questions or concerns about these impending changes, contact Chaim Book at cbook@mb-llp.com. 

New York City Human Rights Law Guidance on 
Protecting Rights of Independent Contractors

As we reported in our  past newsletter in late 2019, the NYC Human Rights Law (NYCHRL) expanded its anti-discrimination, harassment, and retaliation protections to freelancers and independent contractors. This means employers with four or more workers (including employees, freelancers, and independent contractors) are covered by the NYCHRL, effective January 11, 2020. In addition, the NYC Commission on Human Rights (NYCCHR) released a detailed factsheet to provide an explanation of those covered under the new law, the added protections, sexual harassment training requirements, and more:  
  • Freelancer or Independent Contractor: For purposes of the NYCHRL, there is no difference in terminology between "freelancer" and "independent contractor." A worker who is not an employee is a freelancer or an independent contractor. Note that the label itself is not definitive regarding whether a worker is a freelancer/independent contractor or an employee.
  •  Annual Sexual Harassment Prevention Training: NYC employers of 15 or more workers (consisting of employees, independent contractors, and freelancers) must provide sexual harassment prevention training. Independent contractors and freelancers must complete annual training if they (i) work more than 80 hours in NYC in a calendar year and (i) worked for such employer for at least 90 days. Independent contractors and freelancers need not complete more than one annual training if they can furnish proof of the training to all their employers during the year.
  •  App/Platform Operators: Any person or entity that operates an app or a platform that allows its users to hire independent contractors may be liable under the NYCHRL if they either: (1) directly engage in discriminatory acts against an independent contractor using their app/platform to find jobs, and/or (2) knowingly allow the hiring party using their app/platform to discriminate against or harass the independent contractor(s).
Because independent contractors and freelancers are covered by the NYCHRL's anti-discrimination laws, NYC employers employing independent contractors and freelancers must remember to issue notices that inform employees, independent contractors, and freelancers about pregnancy accommodations and anti-sexual harassment in the workplace. Information on anti-sexual harassment must also be posted in a conspicuous area in the workplace.
If you are a NYC employer utilizing independent contractors and/or freelancers and are covered under the NYCHRL, contact us with any questions or concerns about this law. If you are an independent contractor or freelancer working for a NYC employer and believe you have a potential claim against your employer under this new law, contact Chiam Book at cbook@mb-llp.com. 

New York City Employers Banned from Testing 
for Cannabis on  Prospective Employees
 Starting May 10, 2020
It has already been a little less than a year since Mayor Bill De Blasio signed the bill that will ban testing of marijuana and THC (the active ingredient in marijuana) by prospective employers during pre-employment screenings. This bill became law on May 10, 2019 and will be effective this upcoming May 10, 2020.
Overall, this new law will consider it unlawful discrimination for NYC employers to require job candidates to undergo a drug test for marijuana or THC. This law comes with exceptions, however, depending on certain job categories. The following employment positions will not be exempt from being tested for marijuana pre-employment: police and law enforcement officers; caregivers of children, patients, or other vulnerable persons (i.e., teachers, teachers' aides, day care center employees, nursing home and group care facility workers); construction and safety-related workers; commercial drivers; and other positions that might potentially impact the health or safety of individuals in a significant manner as determined by the Department of Citywide Administrative Services (DCAS). Furthermore, this law will not apply to certain union members if their respective collective bargaining agreements require drug testing. If drug testing is otherwise required by federal or state statutes, federal contracts or grants, and the U.S. Department of Transportation, this law will also be inapplicable.
A similar ban on pre-employment marijuana testing may become law in New York State (NYS) in light of Governor Andrew Cuomo's proposal in his recent 2020 State of the State address to legalize marijuana throughout NYS.
In response to this new law, NYC employers should prepare for the changes and check their job application forms, alter their hiring policies to comply with the law, and train their recruiting personnel accordingly if they have not already done so.

New Jersey Employers Mandated to Provide Pre-Tax Commuter Benefits  to Employees 
Starting March 1, 2020

Beginning March 1, 2020, NJ employers with 20 or more employees and covered by the state's unemployment insurance law are mandated to provide commuter fringe benefits to their employees. This employee benefit is a pre-tax commuter benefit that must comply with the federal tax code, IRC § 132(f).
The transit benefits that must be provided to employees under this new law are "qualified transportation fringe" benefits under IRC § 132(f)(1), which include "transportation in a commuter highway vehicle" between the employee's home and workplace, "any transit pass" and "qualified parking." These benefits are capped at the maximum benefit levels allowable under federal law, which will be deducted accordingly from the employee's gross income pursuant to IRC § 132(f)(2). For 2020, the maximum benefit level permissible under federal law is $270 per month (or $3,240 for the year).
An employer that fails to comply with this new law will be subject to a penalty between $100 and $250 for the first violation. The employer will have 90 days to offer its employees the mandatory pre-tax commuter benefits. An employer who fails to take remedial action will be subject to a penalty of $250 for each additional 30-day period the employer fails to provide such benefits to its employees.
If you have any questions or concerns regarding the creation or management of these required transportation benefits under a plan or program in NJ, please contact Chaim Book at cbook@mb-llp.com. 

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

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