NY Employers Face New Strict Harassment Laws

On April 12, 2018, New York Governor Andrew Cuomo signed into law the New York State budget, which includes several significant measures directed at both private and government employers regarding sexual harassment in the workplace. The signing of the budget bills triggers the countdown to the effective dates of the various provisions, as follows, with my comments in italics:

Effective immediately – Expanded protections against sexual harassment under the New York State Human Rights Law to “non-employees,” including contractors, subcontractors, vendors, consultants, and other persons providing services pursuant to a contract. Previously only actual employees could bring charges.

Effective immediately – The new policies allow for publicly-funded payouts for substantiated claims of harassment against state employees, but would require them to reimburse the government within 90 days. This will not apply however to settlements that do not include an admission of liability. Since most -if not all – settlements do not contain an admission of liability, this payback provision would only likely apply to cases won in court.

Effective July 11, 2018 – Prohibitions on the use of nondisclosure clauses in settlements or agreements relating to claims of sexual harassment, unless the condition of confidentiality is the preference of the complainant, as well as prohibitions on mandatory arbitration clauses for claims of workplace sexual harassment. To be enforceable, the agreements must also give the complainant 21 days to consider signing, and 7 days to revoke. Ending mandatory arbitration is a major shift change for employers who seek arbitration to reduce costs and avoid juries. The non-disclosure provisions of the new law mean employers need only add a paragraph in the agreement that non-disclosure is the preference of the complainant. Most complainants and their lawyers want to settle and if they have to sign an NDA with that language in order to settle they likely will. Employment firms should immediately amend their NDAs to reflect this language and the new time components. As for the arbitration provision, a large employer may challenge this section of the law as violating the Federal Arbitration Act which could preempt State restrictions on arbitration

Effective October 9, 2018 – Mandatory distribution of written anti-harassment policies in the workplace and annual anti-harassment training for all employees, both based on models to be developed and published by the New York State Department of Labor and Division of Human Rights.The model training must include: (1) an explanation of sexual harassment; (2) examples of conduct that would constitute unlawful sexual harassment; (3) information concerning the federal and state statutory provisions concerning sexual harassment and remedies available to victims; and (4) information concerning employees’ rights of redress and all available forums for adjudicating complaints. The training must also include information addressing the conduct and additional responsibilities for supervisory personnel. NY joins California, Connecticut and Maine in legislating mandatory training. No one knows what the guidelines for this will be when Albany decides to issue them. Right now more instruction/guidance on this issue is due to come on or about July 11. Either way, this is a new significant burden especially on small employers. Large and even mid-sized companies already likely have something like this in place (if their lawyers and general counsel have not been asleep for the last decade or so). But for small employers and businesses, this new training will be a new experience and burden for them. I am assuming that on-line training will be allowed as mandatory live training would really be burdensome, but again no guidance on this issue has come from Albany. Small companies have no experience whatsoever with Human Resource training issues so I expect lots of new companies will be created to address this need.

Effective January 1, 2019 – Requirement that bids on certain state contracts contain language affirming that the bidding entity has implemented a written policy addressing sexual harassment in the workplace and that it provides annual sexual harassment preventing training to all of its employees. Again,just a new line of text to add in the bidding process but it is likely that NY State will audit for compliance. So you can’t just say it, you actually have to do it.

What should employers do right now? Employers would be wise to review and revise their employment manuals and arbitration clauses; have anti-harassment policies in writing; make sure their managers know that care must be taken to avoid harassment of not just employees but vendors, agents and independent contractors; when the Department of Labor issues its model policy and training program, employers who have existing policies and programs should ensure that their policies and programs measure up to the Department of Labor’s model. One key component to look out for is the definition the DOL will use to define “sexual harassment.” So we will keep an eye and ear out for the DOL guidelines and will update this article when they come out.

This new legislation changes the landscape of sexual harassment law and compliance in the workplace. While it sends a strong and needed message that such behavior will not be condoned in NY workplaces, it remains to be seen whether the requirements it puts into place will be over-burdensome on small and mid-sized companies already stressed by rising rents; rising minimum wages; and stricter record-keeping and reporting requirements for wages, payrolls and tips.

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