Employment Law Blogs - Morea Law LLC

How Many Employees Trigger Coverage Under Federal Employment Laws?

Whether a business has one part-time employee or is a bustling corporation with hundreds on the payroll, there are employment laws that the business must follow. Unfortunately, many business owners are unaware of which laws apply or the fact that as a business grows, it will be subject to new employment laws.

This is the first of a series of three blog posts that will help businesses understand which of the major federal, New Jersey, and New York employment laws apply to their business.

Let’s explore how employee numbers trigger compliance with key federal employment laws.

One Employee:

The Immigration Reform and Control Act of 1986 (IRCA) – requires employers to verify the identity and employment authorization of all employees.
Section 1 of the 1866 Civil Rights Act (Section 1981) – prohibits race discrimination.
The Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) – provides leave rights and job protection for military service members.

Two Employees:

The Fair Labor Standards Act (FLSA) establishes federal minimum wage and overtime requirements.
The Equal Pay Act of 1963 (EPA)- prohibits discrimination on account of sex in the payment of wages.

15 Employees:

Title VII of the Civil Rights Act of 1964, as amended (Title VII) – prohibits discrimination on basis of race, color, religion, sex (including pregnancy, childbirth, and related conditions, sexual orientation, and gender identity) or national origin.
The Americans with Disability Act (ADA) prohibits discrimination on the basis of a disability.
The Genetic Information Nondiscrimination Act of 2008 (GINA) – prohibits discrimination based on employee genetic information.

20 Employees:

The Age Discrimination in Employment Act (ADEA) – prohibits age discrimination against workers 40 years old or older.

50 Employees:

The Family and Medical Leave Act (FMLA) – provides up to 12 weeks of job protected leave for specified family and medical reasons with continuation of group health insurance.

Employment laws may seem like a tangled mess, but fear not! By understanding which laws apply to your business based on its size, you are already one step ahead of the curve. So, whether your business is a one-person show or a corporate juggernaut, take the time to ensure it is on the right side of the law.

If you have questions about your business’s employment practices, or are unsure about whether your business needs to comply with certain employment laws, please schedule a complimentary consultation with us through our online scheduling system.

Information contained in this blog is provided for informational purposes and does not constitute legal advice or opinion. You should consult with an attorney regarding the specifics of your matter or legal issue.

New York’s “Freelance Isn’t Free Act” Becomes Effective May 20, 2024, and Brings Significant Changes to Independent Contractor Arrangements

by Mike Morea

On November 22, 2023, Governor Hochul signed into law the New York Freelance Isn’t Free Act, which mandates written contract, payment, record keeping, and anti-retaliation requirements on businesses that hire freelance workers. The Act is similar to New York City’s Freelance Isn’t Free law that was enacted in 2017, however, the State version is broader in scope and applies statewide. It becomes effective on May 20, 2024.

“Freelance Worker” Under the Act

A “freelance worker” is defined as “any natural person or organization of no more than one natural person, whether or not incorporated or employing a trade name, that is hired or retained as an independent contractor by a hiring party to provide services” of $800 or more. The $800 threshold is determined by looking at either a single contract or the aggregate of all contracts between the freelancer and the hiring party within a 120 day period.

The Act only exempts four classes of workers from its requirements; namely (1) attorneys; (2) licensed medical professionals; (3) sales representatives (as defined by law); and construction contractors (as defined in the Act).

Written Contract Required

The Act requires that whenever a business or individual retains the services of a freelancer, the terms of the engagement must be memorialized in a written contract. The contract must include:

The names and mailing addresses of the parties;
An itemization of the services to be provided;
The value of the services;
The rate of compensation;
The date upon which payment is due or the mechanism to determine the payment due date; and
The date by which the freelancer must submit a list of services rendered for purposes of receiving timely compensation.

Freelance workers must be paid on or before the date set forth in the contract, but no later than 30 days after completion of services.

Additionally, written freelancer contracts must be maintained for a minimum of six years.

Penalties for Non-Compliance

The Act provides for double damages (i.e., 200% of underpayment), injunctive relief, and attorneys’ fees and costs for a failure to pay pursuant to the contract or in violation of the Act. Non-payment claims are subject to a six-year statute of limitations.

The failure to enter into a written contract can result in statutory damages of $250. Additionally, the Act authorizes the attorney general to commence a civil action against any individual or entity that engages in a pattern or practice of violating the Act, with potential civil damages of up to $25,000.

Takeaways

Starting on May 20, 2024, all businesses (or individuals) in New York that hire an individual, or business with only one person working for it, will need to comply with the Act. Business owners should note, however, that the Act does not address the proper classification of a worker as an independent contractor or an employee. Thus, when hiring freelancers businesses should carefully review the nature of the anticipated relationship, and consult with experienced counsel, to ensure both the proper classification of workers and compliance with the Act if a worker is properly classified as a freelancer.

If you have questions about the Act or the classification or your business’s workers, please schedule a complimentary consultation with us through our online scheduling system.

Understanding the Difference Between HR Consultants and HR Attorneys: Which One Does Your Business Need?

by Mike Morea

A Human Resources (HR) consultant and an HR / employment law attorney are two distinct roles within the field of human resources, and they serve different functions. Yet many small business owners often confuse the two roles. This post will aim to clarify the distinction for anyone who is confused by the difference between the two roles.

HR Consultant Provide Administrative Services

HR consultants assist with a wide range of HR activities, including organizational development, talent acquisition, performance management, training, and employee relations.

HR consultants often have expertise in HR best practices, industry trends, and can help organizations implement effective HR strategies.

HR Attorneys Provide Legal Services

An HR attorney, on the other hand, is a licensed lawyer who specializes in employment law and HR-related legal issues. They provide legal advice and representation to employers on matters related to employment contracts, workplace policies, discrimination, harassment, and other legal compliance issues.

HR attorneys may be involved in drafting and reviewing employment contracts, providing guidance on labor law compliance, representing employers in legal disputes, and offering counsel on terminations and workplace investigations. HR attorneys play a crucial role in helping organizations navigate legal challenges related to their workforce.

Although Both HR Consultants and HR Attorneys Help Businesses with Human Resources Matters, They Provide Very Different Services

The primary difference between an HR consultant and an HR attorney is that the consultant is essentially an administrative or strategic role, while the attorney provides legal advice. While both roles may be necessary to ensure compliance with employment laws, an HR consultant does not (and legally cannot) provide legal advice. Similarly, a business would not want to pay an attorney to perform administrative HR functions.

In summary, while both HR consultants and HR attorneys work in the realm of human resources, their roles and expertise differ. HR consultants focus on providing general HR guidance and services, while HR attorneys specialize in employment law and offer legal advice to ensure organizations comply with relevant laws and regulations. Depending on the size and needs of a particular business, organizations may choose to engage both types of professionals.

If you have questions about your business’s employment practices, or are unsure about whether your business complies with applicable employment laws, please schedule a complimentary consultation with us through our online scheduling system.

New York Extends Statute of Limitations for Discrimination Claims to Three Years

by Mike Morea

Effective February 15, 2024, the statute of limitations for unlawful discrimination under the New York State Human Rights Law (NYSHRL) becomes three years. Previously only claims for sexual harassment were subject to a three year statute of limitations under the NYSHRL, with all other claims of discrimination having a one year statute of limitations.

The NYSHRL is an expansive law that protects individuals from workplace discrimination. Protected categories under the NYSHRL include, without limitation, race, creed, color, national origin, citizenship or immigration status, actual or perceived sexual orientation, military status, sex (including pregnancy), disability, predisposing genetic characteristics, marital status, status as a victim of domestic violence, religion, prior criminal arrests or prosecutions that were terminated favorably for the individual, familial status, and gender identity or expression (including a person’s transgender status).

Importantly for business owners and managers, the NYSHRL imposes personal liability for unlawful discrimination not only on the business, but also on individuals who (1) have an ownership interest in the employer; (2) exercise control over personnel decisions; or (3) aided and abetted discriminatory conduct.

The expansion of the statute of limitations increases the potential liability of employers in New York as individuals will now have up to three years to bring a claim for alleged unlawful discrimination. To reduce the risk of business and personal liability, employers should review their employment policies and anti-discrimination practices and revise or update them as necessary.

Starting March 12th, New York Employers Will Be Prohibited from Requiring Access to Employee Personal Accounts

by Mike Morea

On March 12, 2024, New York Labor Law Section 201-i becomes effective and prohibits employers from requesting or requiring that an applicant or employee disclose a username, password, or other means to access a personal account or service. This will effectively ban New York employers from demanding access to employee (or applicant) personal social media accounts, videos, photographs, blogs, instant messages, or similar electronic content.

Specifically, the law prohibits employers from requesting, requiring, or coercing an employee or applicant to:

Disclose any username and password, password, or authentication information for accessing a personal account through an electronic communications device;
Access the employee’s or applicant’s personal account in the presence of the employer; or
Reproduce in any manner photographs, video, or other information contained within a personal account.

The law also prohibits employers from retaliating against applicants or employees who refuse to disclosure personal account information.

The law defines a “personal account” as “an account or profile on an electronic medium where users may create, share, and view user-generated content….” An “electronic communications device” is defined as “any device that uses electronic signals to create, transmit, and receive information, including, but not limited to computers, telephones, personal digital assistants and other similar devices.”

Importantly, the law only applies to personal accounts, so accounts used for business purposes are generally not subject to the law. The law also does not restrict an employer from viewing accounts that are publicly accessible. It is an affirmative defense if the employer sought access to personal accounts to comply with a federal, state, or local law.

Because the law becomes effective in less than two months, employers in New York should review their hiring, technology, and social media policies, and update them, if necessary, to ensure compliance with the new law.

If you have questions about your business’s hiring, technology, or social media policies, please schedule a complimentary consultation with us through our online scheduling system.

The U.S. DOL Finalized its Employee or Independent Contractor Classification Rule

by Mike Morea

On January 10, 2024, the U.S. Department of Labor (USDOL) published its final rule defining “independent contractor” under the Fair Labor Standards Act (FLSA). The final rule becomes effective March 11, 2024. The final rule rescinds the USDOL’s 2021 rule, which had arguably expanded the definition of an independent contractor under the FLSA. The USDOL has also published “Frequently Asked Questions” about the final rule.

According to the USDOL, the final rule is designed to ensure that workers who are employees are paid the minimum wage and overtime they are entitled to under the FLSA. The final rule is also intended to return the analysis of whether a worker is an employee or independent contractor to the “economic realities test” used prior to the adoption of the 2021 rule.

Under the final rule courts and the USDOL will look at six factors to determine whether workers are employees or in business for themselves (i.e., independent contractors). Those factors are:

The worker’s opportunity for profit or loss depending on managerial skill;
The investments by the worker and the potential employer;
Permanence of the work relationship;
The nature and degree of control exercised by the potential employer;
Whether the work performed is integral to the potential employer’s business; and
The worker’s use of skill and initiative.

None of those factors are given more weight than another and the USDOL has stated that other factors may be relevant if they indicate whether workers are in business for themselves, as opposed to being economically dependent on the employer for work.

New Jersey employers should be reminded that New Jersey’s “ABC Test” uses a much more expansive definition of “employee” and workers who might qualify as independent contractors under the FLSA may be employees under New Jersey law.

Employers that are utilizing independent contractors should consult with experienced counsel to determine whether the final rule impacts those workers’ independent contractor status.

If you have questions about the classification or your business’s workers, please schedule a complimentary consultation with us through our online scheduling system.

FinCEN’s Online Portal is Now Accepting Beneficial Ownership Reports

by Mike Morea

As we previously posted, the Beneficial Ownership Information Reporting Rule (BOI Rule) of the Financial Crimes Enforcement Network of the U.S. Treasury (FinCEN) was scheduled to take effect January 1, 2024. The BOI Rule requires companies such as corporations, limited liability companies, and other entities created to report information about their beneficial owners. FinCEN is now accepting BOI reports, which can be filed here.

As a reminder, entities formed or registered after January 1, 2024, must report their initial beneficial ownership information within 90 days of formation or registration. Entities formed or registered before January 1, 2024, have until January 1, 2025, to report their initial beneficial ownership information.

Beneficial owners under the BOI Rule are individuals or entities who (1) exercise substantial control over the company (such as C-Suite executives and important decision makers); or (2) own or control at least 25% of the company’s ownership interests.

The following information must be reported about each beneficial owner:

Name;
Date of birth;
Complete current address;
The unique identifying number and image of a U.S. passport, State issued driver’s license, foreign passport, or a state, local, or tribe-issued ID.

Entities formed after January 1, 2024, must also provide the same information for the “Company Applicant” (i.e., the individual who formed or registered the entity).

For many small closely-held entities, the reporting will usually be relatively straightforward. However, entities with more complex management or ownership structures will likely need to consult with counsel to identify all the individuals or entities qualifying as beneficial owners under the BOI Rule. Violations of the BOI Rule can carry a civil penalty of $500 per day and criminal penalties of up to $10,000 and two years in prison.

If you have questions about identifying your entity’s beneficial owners or BOI Rule reporting obligations, please schedule a complimentary consultation with us through our online scheduling system.

It’s Time Again for Employers to Comply with Year End Obligations and Prepare for the New Year

by Mike Morea

As we remind our readers each year, as year-end approaches, business owners need to remain mindful of their year-end human resources compliance obligations and prepare for upcoming minimum wage increases.

Minimum Wage Increases

New Jersey

Effective January 1, 2024, the New Jersey minimum wage will increase as follows:

$15.13 per hour for most employers.
$13.73 per hour for seasonal and employers with less than six employees.
$5.26 per hour with a tip credit of $9.87 per hour for tipped employees.
$12.81 per hour for agricultural employees.
18.13 per hour for long-term facility staff.

New York

Effective January 1, 2024, New York’s minimum wage will increase as follows:

$16 per hour for all employers in New York City, Long Island, and Westchester county.
$15 per hour for employers in the remainder of the state.

Additionally, the salary basis requirement for executive, administrative, and professional exemptions from overtime increases to $1,200 per week in New York City, Long Island, and Westchester and $1,124 in the rest of the State.

New Jersey Employee Notices

Employers in New Jersey with 50 or more employees must provide each employee with Gender Equity Notices by December 31, 2023. This is an annual requirement and employers must obtain acknowledgments of receipt from each employee. The form Gender Equity Notice can be found here.

New Jersey employees with 10 or more employees should issue their annual notices under New Jersey’s whistleblower law, the Conscientious Employee Protection Act (CEPA), which can be found here.

Failure to comply with any of these requirements could expose an employer to fines or liability.

If you have questions about your business’s employment practices, please schedule a complimentary consultation through our online scheduling system.

The New Beneficial Ownership Reporting Rule: A Guide For Small Businesses

by Mike Morea

Attention, small and medium-sized businesses! The Beneficial Ownership Information Reporting Rule (BOI Rule) of the Financial Crimes Enforcement Network of the U.S. Treasury (FinCEN) takes effect in January 2024. The BOI Rule will bring significant changes to company transparency and reporting obligations. FinCEN has released a detailed FAQ about the new regulation. We have provided a summary below with information businesses should be aware of concerning the BOI Rule.

What is the BOI Rule?

The BOI Rule requires companies such as corporations, limited liability companies, and other entities created by a filing with a secretary or state, to report information about their beneficial owners. The rule aims to enhance financial crime prevention and market integrity by shedding light on the true decision-makers behind businesses.

Who is a beneficial owner?

Beneficial owners under the BOI Rule are individuals or entities who (1) exercise substantial control over the company; or (2) own or control at least 25% of the company’s ownership interests.

Beneficial owners who exercise substantial control include senior officers (e.g. C-Suite executives); anyone with the ability to appoint or remove a senior officer; and other important decision makers.

Does it apply to my business?

The BOI Rule applies to most businesses, with limited exemptions. However, the deadline for reporting beneficial ownership varies depending on when the business was formed or registered:

Companies formed or registered after January 1, 2024, must report their initial beneficial ownership information within 90 days of formation or registration.
Companies formed or registered before January 1, 2024, have until January 1, 2025, to report their initial beneficial ownership information.
Companies formed or registered after January 1, 2025, must report their initial beneficial ownership information within 30 days of formation or registration.

What information needs to be reported?

The rule requires identifying and reporting the following details about beneficial owners:

Name;
Date of birth;
Complete current address;
Unique identifying number and image of a U.S. passport or State driver’s license.

What should businesses do now?

FinCEN is expected to release an electronic filing system in early 2024. We will post an update when that happens. Even though the filing system is not available yet, business owners should not wait to start the process of complying with the BOI Rule. Instead, consult with your legal counsel now to discuss your specific needs and ensure a smooth transition to BOI Rule compliance. Depending on the structure of a business, the BOI Rule can be complex and it is an evolving regulation. Seeking legal guidance now can help businesses navigate the requirements efficiently and minimize potential mistakes.

If you have questions about your business’ BOI Rule reporting obligations, please schedule a complimentary consultation with us through our online scheduling system.

Understanding New Jersey’s Pregnancy and Maternity Leave Laws

by Mike Morea

We often get questions from our New Jersey clients about the rights of employees who are going out on pregnancy and maternity leave. New Jersey’s support for pregnant women includes paid leave benefits under the Temporary Disability Insurance (TDI) and Family Leave Insurance (FLI) programs. This issue can be confusing to business owners who have not dealt with the issue in the past due to several overlapping laws and state benefit programs; namely temporary disability benefits and family leave insurance. Adding to the potential confusion for employers, pregnancy and maternity leave involve both disability and family leave issues, and depending on the circumstances, pregnant women may be entitled to both disability and family leave job protection, or just disability related job protection.

Pregnancy leave typically qualifies as protected disability leave

Pregnancy related medical conditions can qualify as disabilities under New Jersey’s Law Against Discrimination (NJLAD), requiring employers to provide reasonable accommodations for those conditions. New Jersey generally considers a normal birth to involve four weeks of disability before birth and six weeks to eight weeks after birth, depending on whether the birth was a normal delivery or a c-section, respectively. These “standard” times for pregnancy related disability leave can be longer if the mother has pregnancy related medical complications (which would also qualify as a disability), provided that a longer leave period does not impose an undue hardship on the business. During this time, pregnant women may receive temporary disability benefits, which are calculated based on their average weekly wage. This average weekly wage is determined by the earnings in the eight calendar weeks immediately before the week in which the disability begins, and it significantly influences the amount of benefits a woman may receive during her leave.

Maternity leave qualifies as protected family leave for certain employees

Employers with 30 or more employees in New Jersey are also subject to the New Jersey Family Leave Act (NJFLA), which provides job-protected leave to care for a family member or bond with a newborn or adopted child, under the enforcement of the NJ Division on Civil Rights. The NJ Family Leave Act ensures that employees in New Jersey have the right to take leave for their own serious medical conditions or to bond with a new child without fear of losing their job. Thus, once an employee’s pregnancy-related disability ends, the employee may be entitled to up another 12 weeks of job-protected leave under the NJFLA. To be eligible for protection under the New Jersey Family Leave Act, the employee must have been employed for at least one year and worked 1,000 or more hours in the prior 12 months.

Adding to the potential confusion, employers with 50 or more employees are also subject to the Family and Medical Leave Act (FMLA), which provides up to 12 weeks of job-protected leave for employees to care for themselves or family members. FMLA and NJFLA leave can overlap, but because NJFLA does not cover care for oneself, employees can potentially receive 24 weeks of job-protected leave (12 weeks for the employee’s own medical condition under the FMLA and 12 weeks of bonding time under NJFLA).

Employees on maternity leave are entitled to receive temporary disability benefits and family leave insurance benefits in New Jersey

In addition to job protections, during a pregnancy related leave of absence, the employee will generally be entitled to claim 10 to 12 weeks of temporary disability insurance (TDB) through the state for the time the employee is unable to work, administered by the Division of Temporary Disability. New Jersey also provides Family Leave Insurance (NJFLI) benefits, or family leave benefits, through the state. An employee’s eligibility for NJ family leave insurance benefits starts after the pregnancy-disability and eligibility for temporary disability insurance benefits ends. NJFLI provides up to 12 weeks of benefits for bonding with a new child, with the weekly benefit rate based on the employee’s average weekly wage. NJFLI, however, does not confer job protection.

The New Jersey Department of Labor and Workforce Development has published an overview explaining the overlap of the wage replacement programs and job protection laws, which can be found here.

Conclusion

As the above summary shows, pregnancy-related leave can be confusing. Understanding both state laws and federal job protection laws is crucial to ensure full legal compliance and protection for employees. This includes navigating the complexities of temporary disability and family leave, which are essential aspects of pregnancy and maternity leave. Given the numerous laws potentially impacted by pregnancy, maternity leave, and the interplay between temporary disability and family leave benefits, when presented with an employee pregnancy, employers should consult with knowledgeable counsel. This will help ensure that employees receive their legal job protections and benefits during pregnancy and that the employer complies with all applicable laws, including the federal Family Medical Leave Act (FMLA) program and the NJ Family Leave Act (NJFLA).

If you have questions about your business’ pregnancy or other leave of absence policies, please schedule a complimentary consultation with us through our online scheduling system.