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Get It Right From the Start: Human Resources Compliance

Summarized from New York State Bar Association Journal, January 2010, “Get it Right From the Start: Human Resources Compliance for the New Law Practice” by Nancy B. Schess.

Being an employer in New York means that you will be subject to numerous rules and
regulations. Without proper knowledge of these laws, making a mistake is virtually guaranteed.
This article will provide an overview of the more important laws with which every lawyer should
be familiar. Then, the article will address some best practices for human resources compliance.

I. Employment Law
In New York, there are a myriad of laws that govern every aspect of the employee-
employer relationship from hiring to firing. One of the most important, and also one of the most
misunderstood, is the concept of “employment at will.”

A. How Employment at Will Works
The concept of at will employment means that an employer may terminate an employee for
any, or no, reason at all, with or without notice. The same holds true for the employee. This
may seem like a boon to employers who think that the doctrine entitles them to an ultimate
defense to any employment claim, but at will status can be unintentionally forfeited in a variety
of ways. Of course an employer may intentionally forgo at will status, but it is when the
forfeiture is unintended that problems can arise.

B. An Employer May Not Discriminate Against Workers
There are also provisions in New York law that trump at will employment status, the most
important of which are the anti-discrimination laws. Federal, state and local laws prohibit
discrimination based on specific protected characteristics of the employee. Many of these laws
require a threshold number of employees for the obligations to arise. What follows is a brief
synopsis of the more important anti-discrimination laws.

1. Federal Anti-Discrimination Laws

a. Title VII of the Civil Rights Act of 1964
Title VII prohibits discrimination in employment based on race, color, religion sex (including
pregnancy), genetic information, and national origin. It also prohibits harassment on the basis of
any of these characteristics and applies to employers with 15 or more employees.

b. Section 1981 of the Civil Rights Act of 1866
Section 1981 prohibits racial and ethnic discrimination. It is broader than Title VII because it
applies to all employers regardless of size, has no cap on damages, provides for personal liability
and has a much longer statue of limitations.

c. Age Discrimination in Employment Act (ADEA)
The ADEA prohibits discrimination based on age and applies to employers with more than
20 employees.

d. Americans with Disabilities Act (ADA)
The ADA prohibits discrimination against employees with a disability (or perceived
disability) who are able to perform the essential functions of their job with or without reasonable
accommodation. It requires that employers make reasonable accommodations unless it would
pose an undue burden and applies to employers with 15 or more employees.

e. Family and Medical Leave Act (FMLA)
The FMLA applies to employers with more than 50 employees. The act provides for up to
12 weeks of unpaid leave for certain medical and family situations. Leave is available for the
birth and care of the employee’s child, the placement of a child for adoption, to care for an
immediate family member with a serious health condition, for the employee’s own serious health
condition, or in order to deal with an exigency arising out of the active duty of a family member
in the military. Employees may also request up to 26 weeks of unpaid leave to take care of a
family member who has suffered an injury in the line of duty. Employers may not retaliate
against employees who take leave under this law.

f. Equal Pay Act (EPA)
The EPA requires that men and women receive equal pay for equal work. It applies to all
employers, regardless of size.

2. State and Local Anti-Discrimination Statutes in New York

a. New York State Human Rights Law (NYSHRL) The NYSHRL prohibits discrimination on
the basis of race, color, gender, age, national origin, creed, disability, genetic characteristics,
sexual orientation, military or marital status, or status as a domestic violence victim or prior
arrest or conviction. The law applies to employers with more than four employees.

b. New York City Human Rights Law (NYCHRL) The NYCHRL is similar to the NYSHRL,
but also prohibits discrimination based on a person’s arrest or conviction of stalking or other
sex offenses. It also applies to employers with more than four employees.

c. Distinctions from Federal and State Law
All of these statutes overlap and provide different remedies. For example, the NYCHRL is
much broader and more expansive than its federal and state counterparts and several New York
court decisions have narrowed the defenses that an employer may use under city law.

3. Summary of Retaliation Claims
Most anti-discrimination statutes also prohibit an employer from retaliating against an
employee who has filed a complaint or otherwise participate in an employment discrimination
claim. Retaliation claims may succeed even where discrimination claims fail.

The US Supreme Court decided Burlington Northern and Santa Fe Railway Co. v. White in
2006, which lowered the standard for proving retaliation by broadening the types of conduct that
can be considered actionable. Under this case, retaliation exists where materially adverse action
is taken that would dissuade a reasonable person from making, or supporting a charge.


4. Remedies Available for Violation of Discrimination Laws
Remedies under these laws are broad and dramatic. A plaintiff may be awarded a
combination of remedies including back pay, reinstatement, compensatory and punitive damages
and front pay. The ADEA also provides for mandatory liquidated damages up to the amount of
back pay, if the violation is found to be willful. Civil penalties are also available under both the
NYSHRL and NYCHRL. Most statues provide that the plaintiff may be entitled to attorney fees.

C. Other Laws Regulating the Workplace
There are many other laws besides these with which the lawyer must be familiar.

1. Wage/Hour Laws
The federal Fair Labor Standards Act (FLSA) regulates minimum wage and overtime and
includes specific rules for who is eligible for overtime and how it must be calculated. New York
Labor Law governs the same topics as well as frequency of payments, whether an employer must
pay for unused vacation at termination, deductions from wages and more. An employer cannot
get around the FLSA’s overtime rules by simply declaring an employee as “salaried” or
“professional,” which depends on factors such as what kind of work the employee does, the
employee’s training and education and the amount of supervision the employee requires.
Remedies associated with violations of these laws may include liquidated damages, attorney
fees and personal or criminal liability. Wage and hour compliance should be a priority in your
personnel compliance program.


2. Employee Retirement Income Security Act (ERISA)
ERISA governs benefits. Also, if you plan to offer medical insurance or a 401(k) program,
then you must make sure to investigate the ERISA obligations regarding these benefits.

3. Obligation to Protect Social Security Numbers and Other Personal Identifying
Information
In January 2009, the New York Labor Law was amended to protect against identity theft.
Employers may not publicly post, publish or keep social security numbers anywhere where
access is unrestricted.
Employers may not communicate personal identification of an employee to the public. This
information includes social security number, address, phone number, e-mail, Internet ID and
password, maiden name or driver’s license.

4. Immigration Compliance
Employees must be legally authorized to work in the US and must demonstrate this to their
employer. No later than three days from the beginning of employment, an I-9 form must be
completed along with specific forms of identification that prove ability to work in the US. The
employer must review and approve these documents and keep the forms for three years after
hiring, or one year after termination, whichever is longer. The files must be kept separate from
the personnel file.



II. Best Practices for Core Personnel Policies
The number of workplace lawsuits is on the rise. A practice employer can protect
himself through many small steps that merely require attention, thought, time and resources. The
investment will pay off by avoiding problems that could otherwise be devastating.
The first step is to establish policies and procedures that address issues in your particular
workplace. An employee handbook is the ideal means for communicating policies to the staff.


A. The All-Important Employee Handbooks
The handbook should be the first place an employee turns for the answers to all their
questions. It is also the first place an attorney will look when contemplating or defending a
claim against your business. Some of the best handbooks follow the following basic rules.

1. They Include Appropriate Disclaimers
The handbook should first include a complete statement of employment status and should also
delineate that nothing in the handbook is a contractual right to remain in the employ of the
business. Also, reserve the right to modify, revoke, suspend, terminate or change all policies
with or without prior notice.

2. They Include Legally Required and Recommended Policies
Before proceeding with a handbook, investigate and understand those laws that apply to your
business as well as those policies that are needed to help your practice run smoothly.

3. They Communicate the Firm’s Expectations
The handbook is primarily a communication tool and should let employees know what you
expect from them and what they can expect from you. You could include anything from
personal appearance requirements to alcohol and drug policies to the importance of keeping
client confidences.

4. They Make It Easy to Consistently Apply Workplace Rules
Discrimination claims are borne from inconsistent treatment. When the rules are applied
differently to different workers, a question can be raised as to whether a protected characteristic
was the motivating reason for the disparity. Having clear rules that are consistently applied is
the best defense to a discrimination claim and can often be an insurmountable obstacle to
plaintiffs.

5. They Are Written Clearly
An effective handbook is readily understandable and problems often arise because of
ambiguous language. One of the most important sections of a handbook is a detailed Table of
Contents which will make it easy for employees to find the section they need.

B. The Top Five Important Handbook Policies

1. Employment At Will
Clearly communicate the nature of employment and repeat the language in the handbook
along with an acknowledgement that must be signed by employees.
2. Equal Employment Opportunity/Prohibition of Workplace Harassment
Prior to 1998, written policies that prohibited discrimination were used as part of an
employer’s defense to workplace claims. Then, the Supreme Court decided two cases which
elevated the importance of a compliant written policy.
In Burlington Industries, Inc. v. Ellerth and Fargaher v. Boca Raton, the court laid out a way
that employers could avoid liability completely. This defense starts with a compliant written
policy which must contain specific clauses that explain in some detail they types of prohibited
conduct and include a complaint procedure that also explains how a complaint will be handled.

3. Workplace Technology
Technology raises a variety of issues ranging from privacy to harassment to confidentiality.
Social networking sites, such as Facebook and Linkedin, have further complicated these issues.
The policy should cover the full array of workplace technology and should define how such
technology should, and should not, be used. The policy should also make clear that employees
do not have privacy rights in their use of technology provided by the employer and that the
employer reserves the right to monitor all technology usage.

4. Vacation
New York employers are not required to offer paid vacation. If they choose to do so, the
policy should be set out in writing. Failure to do so can lead to a civil penalty. The employer is
free to choose conditions which should also be stated in writing. Forfeiture of accrued vacation
on termination should also be noted in the handbook.

5. Time Keeping and Employee Classifications
The handbook should define who is eligible for overtime and should follow state and federal
guidelines for the logistics of how overtime works. The law requires that specific records be
kept all employees and these procedures should be explained in the handbook so the employees
have a resource to consult. Also, you should include a safe harbor provision that may protect
you from liability in case an exempt employee’s pay is reduced and his status placed in jeopardy.

III. Conclusion
Failure to anticipate workplace issues can have costly consequences. With some prior
planning and thought you can handle the range of compliance issues that may arise in the
workplace and even limit your potential liability.

This publication is distributed with the understanding that the author, publisher and distributor are not rendering legal, accounting or other professional advice or opinions on specific facts or matters, and, accordingly, assume no liability whatsoever in connection with its use.

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