2025, Are You Ready for It?
Dear Reader:
It’s the end of another era. We’re back to December, and we know this time of year all too well – we’re long past the cruel summer, about a fortnight away from yet another year – ‘tis the damn season and it’s time to speak now so you can enter 2025 fearless(ly) because employment laws can be a nightmare dressed like a daydream leaving you haunted, if you’re not properly prepared. Read the manuscript below to avoid employment law becoming your albatross next year.
At the Federal Level
Grab Your Passport and My Hand - Is your I-9 Documentation in Order?
With a new administration coming in January, which promised mass deportation and a general crackdown on immigration, employers should ensure that they are in compliance with I-9 documentation. During Donald Trump’s last administration, I-9 audits were higher than during either the Obama or the Biden presidencies, and that should be expected this term.
Employers should audit their own I-9 compliance to ensure each of their employees has filled out their I-9 Form (accurately and completely) and provided proper supporting documents for verification, such as a passport, green card or E-Verify confirmations, and that the employer section of each I-9 has been properly completed.
I-9 Forms are required to be completed by employees no later than their first day of work for pay and employers are required to fill out the second section no later than the third business day from when the employee started work for pay.
Employers should also audit to ensure proper compliance with recordkeeping. Employers are required to maintain both the I-9 Forms and the supporting documentation for the duration of an employee’s tenure and up to three years after an employee’s termination. It is imperative that employers properly train any employees who onboard employees with proper I-9 compliance and documentation.
New York Developments
New Year’s Day - 2025 New York Minimum Wage Increases
Minimum wage in New York increases effective January 1, 2025 based upon the table above. As a reminder, only hospitality employees are permitted to take a tip credit for minimum wage.
Additionally, the weekly salary rate for executive and administrative exempt employees will increase effective January 1, 2025 to $1,237.50 per week in New York City, Long Island and Westchester, and to $1,161.65 per week in the remainder of New York state. As a reminder, however, the weekly salary threshold for exempt employees for non-minimum wage purposes (like method and frequency of pay protections) was increased in March 2024 to $1,300. Thus, to be exempt for both minimum wage and frequency/method purposes, an exempt employee must be paid at least $1,300 per week ($67,600 annually).
Employers should audit their payrolls to ensure anyone classified as exempt is receiving the requisite minimum weekly salary and that anyone making minimum wage receives the required increase, effective January 1.
A Lavender Haze - New York Prenatal Leave
New York employers should ensure their policies are amended to reflect the new paid prenatal time off requirement, which goes into effect January 1, 2025. The amendment to the New York Paid Sick Leave Law requires all employers, regardless of size, to provide 20 hours of paid leave to employees receiving prenatal care in a 52-week period. That 52-week period begins upon the first use of leave. The leave is only for the employee actually receiving the prenatal health care and not spouses, partners or other support persons.
Prenatal care means time off for the employee to receive health care during the employee’s pregnancy or related to the pregnancy, such as physical exams, medical procedures, monitoring, testing and discussions with health care providers regarding the pregnancy. This includes appointments related to fertility treatment and end-of-pregnancy care. It does not, however, include any postnatal or postpartum appointments.
The 20-hour leave allocation is additional paid time that employers must provide on top of any other paid sick or family leave. Employers are not permitted to require medical records for such leave requests. Additionally, employers may not dictate which leave an eligible employee must take if leave outside prenatal leave is available, nor may they require an employee to exhaust a particular leave prior to using the paid prenatal leave.
The paid prenatal leave may be taken in one-hour increments and is paid at an employee’s regular rate of pay or minimum wage, whichever is greater.
Employers should review and revise their policies to ensure compliance, and train managers and human resource employees to ensure they are familiar with relevant leave options and how they function.
Long Story Short – New Requirements for New York Retail Employers
Effective March 4, 2025, the Retail Worker Safety Act will go into effect, requiring New York employers with 10 or more retail employees to adopt and maintain a workplace violence prevention training and policy.
The policy has specific requirements that must be met such as outlining instances that may place employees at greater risk for workplace violence (e.g., working late or early hours, exchanging money, etc.), methods employers use to prevent any workplace violence, information about federal and state laws protecting retail employees and their remedies related thereto, and an anti-retaliation statement. A model policy will be provided by the State, and employers may use the model policy or adopt a policy that meets such minimum requirements.
The training program also has specific requirements that must be met, including a requirement that it be interactive. The State will also be releasing a model training program. Similar to the anti-harassment training requirement, employers must provide the policy at the time of hire and at each annual training, along with the information presented at the violence prevention training program. Covered employers should ensure they review and revise their policies and training programs to comply with this new law.
Additionally, retailers who have 500 or more employees (counting all employees nationwide) are required to provide panic buttons in the workplace in 2027.
Everything Has Changed - New York COVID Paid Sick Leave Sunsets
Believe it or not, COVID sick leave is about to be a thing of the past. New York COVID Paid Sick Leave sunsets on July 31, 2025, and such leave will no longer be available after that date. Instead, employees may use any other accrued paid leave for any COVID-related absences, such as New York State Paid Sick Leave, New York Family Leave or New York City’s Earned Safe and Sick Time Act. Employers should review and revise their policies to remove reference to COVID sick leave after July 31.
The State of Arbitration Agreements in New York Are Down Bad Post EFAA
In 2022, the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA) amended the Federal Arbitration Act providing that a plaintiff could avoid compulsion to arbitration based on a previously entered into arbitration agreement when the case included claims of sexual assault or harassment. Notably, the law provided a plaintiff with the choice of whether to invoke its terms and appeared to indicate that the entire case, not just the claim related to sexual harassment or assault would be permitted to proceed in court, rather than in arbitration. Two recent New York cases have provided further insight into how the EFAA will be construed in New York. In the cases, the Courts have erred toward broad interpretation of the EFAA providing wide leeway to plaintiffs in pleading, timing and nature of the claims.
In the most recent case, the Southern District of New York, in Diaz-Roa v. Hermes Law, P.C., No. 24-cv-2105 (LJL), 2024 U.S. Dist. LEXIS 212472 (S.D.N.Y. Nov. 21, 2024) found in order for the EFAA to apply to a case, a plaintiff need only allege a dispute, a nonfrivolous claim of sexual assault or to conduct alleged to constitute sexual harassment and that the dispute relates to such sexual conduct in order to have the entire case free from arbitration. “The alleged conduct need not ultimately be found to actually constitute sexual harassment so long as the plaintiff alleges that the conduct constitutes sexual harassment.” The Court explained the sufficiency of such claims must be reserved for a merit’s adjudication later.
In so doing, the Diaz-Roa Court rejected the defendants’’ argument that a plaintiff must allege a claim for sexual harassment or assault that passes the Federal Rule 12(b)(6) pleading threshold set forth in Twombly or Iqbal and further rejected an argument that a case should be split and the claims related to sexual harassment or assault should be adjudicated by court while the remaining claims of a case should remain in arbitration per the parties’ arbitration agreement. The Court found “[v]irtually by definition all of the claims to which the EFAA applies will arise from the relationship that the plaintiff has with his or her harasser or assaulter,” and as such, the entire case should remain together. The Court further found the Twombly pleading requirement inappropriate because the only question in front of a court at this stage was who the proper adjudicator should be and to use the Twombly standard to determine whether the claims had merit would put the cart before the horse.
Ultimately, the Diaz-Roa Court found the EFAA appropriately applied to bar the plaintiff’s compulsion to arbitration where she had alleged she was wrongfully terminated when she attempted to exercise vested shares and that she had experienced sexual harassment from her employer inasmuch as she was encouraged to flirt with potential clients, use her appearance to attract business, become romantically involved with individuals in the industry, and endure her supervisor becoming fixated on her appearance, sliding his body behind her on a scooter and comparing her to a piece of steak at a business dinner.
Additionally, this summer, the Second Circuit in Olivieri v. Stifel, 112 F.4th 74 (2d Cir. 2024) held if a plaintiff’s harassment/assault claims had originally occurred prior to the EFAA, but were subject to the continuing violation doctrine — in essence, the hostile work environment continued after the passage of the EFAA — then her claims “reaccrued with each successive act that was part of the single continuing course of conduct underlying the hostile work environment,” and the EFAA was appropriately applicable and could prevent compelling arbitration.
The Court also rejected the defendants’ argument that the plaintiff’s retaliation claim was not subject to the EFAA, finding the retaliation resulted from a sexual harassment complaint, and as a result, is “related to conduct that is alleged to constitute sexual harassment.”
This case expands the interpretation of the EFAA in two ways: first, in making it applicable to acts that occurred prior to the EFAA (assuming there is a continuing violation) and second, expanding the definition of sexual harassment to include claims of retaliation stemming from a sexual harassment complaint. Employers wishing to enforce arbitration agreements should be mindful of these additional hurdles. As a result, the main takeaway should be to avoid harassment claims in the first instance and ensure employees and managers are properly trained.
Out of the Woods - Some Good News for New York Employers
The Second Circuit in Guthrie v. Rainbow Fencing Inc., 113 F.4th 300 (2d Cir. 2024) held that plaintiffs must allege injury in fact to having standing in federal court to sue for violation of wage notice laws. In August, the Second Circuit held that an employee lacked standing to bring a claim in federal court for statutory damages for an employer’s failure to provide Wage Theft Protection Act compliant wage notices and wage statements because the plaintiff had not alleged any harm other than the statutory violation itself. The Court held a plaintiff “must show some causal connection between the lack of accurate notices and the downstream harm.”
The Court acknowledged the Wage Theft Protection Act was intended to prevent wage theft and the required wage statements were an effort to provide an opportunity for employees to advocate for themselves against wage theft. However, it found that unless a plaintiff could show they “would have undertaken such advocacy and plausibly would have avoided some actual harm or obtained some actual benefit if accurate notices had been provided, the plaintiff-employee has not established a concrete injury in fact sufficient to confer standing.” The Court further concluded it was possible that a plaintiff may suffer an injury in fact sufficient for standing when insufficient notices prevented an employee from obtaining full wages, but a plaintiff must “support a plausible theory as to how he was injured by the defendants’ failure to provide the required documents.”
Importantly, this should not signal a free pass to employers for noncompliance with the Wage Theft Protection Act. Instead, the Court laid out a blueprint for how plaintiffs may properly plead these claims, and it is likely many plaintiffs will adjust their pleadings accordingly. Additionally, outside of private causes of action, there are fines that may result from failing to comply with the wage notice and statement requirements. Despite this win for an employer, employers should continue to ensure compliance with the Wage Theft Protection Act and audit their records to confirm each employee has received requisite pay notices and that their wage statements are in compliance with the Act’s numerous requirements.
In a second recent win for employers, King v. Aramark Servs., 96 F.4th 546 (2d Cir. 2024), the Second Circuit held an out-of-state employee who occasionally worked remotely in New York could not pursue claims under New York State Human Rights Law against a non-New York corporation when the impact was not felt primarily in New York. The plaintiff in this case worked at Aramark, a Delaware corporation with a principal place of business in Pennsylvania.
The plaintiff was hired for an assigned a role in a Virginia office overseeing Virginia and West Virginia facilities. Because of her need to be available and travel between Aramark facilities, she was required to rent a home in Virginia. However, she maintained a home office in New York and Virginia, both of which she worked from regularly throughout her employment. The Court found the “lion’s share of the discriminatory conduct” alleged, including her termination, was directed at her in Virginia, not New York. The Court found the discriminatory act did not affect her employment within New York and NYSHRL did not authorize a private cause of action against a nonresident foreign corporation that occurred outside of New York. The Court concluded the fact that Aramark permitted the plaintiff to sometimes work from New York and some of the discriminatory conduct alleged took place while she was working from her New York home did not change its conclusion. Notably, had the termination occurred while the plaintiff was in New York, this may have been a different result, but it is reassuring to employers who are attempting to be flexible and permit out-of-state remote work that they will not be subject to the plaintiff-friendly New York Human Rights Law while doing so, provided any discrimination that happens while the employee is in New York is “tangential.”
Welcome to New York – Potential New Law Would Provide Leave for Pet Care
In looking at what may be coming from New York, and New York City specifically, the New York City Council is considering a bill that would amend the Earned Safe and Sick Time Act to permit employees to use time under the act to care for their lawful pets who may need “medical diagnosis, care or treatment of a physical illness, injury or health condition that needs preventative medical care.” If passed, it would be the first such law in the United States. The bill is pending with New York City’s Council Committee on Consumer and Worker Protection. Notably, if passed, the law would not require employees to provide additional time off, but instead, only permit another use of ESSTA time. Stay tuned to see if this becomes law.
New Jersey Developments
I Think I’ve Seen This Film Before - New Jersey Pay and Promotion Transparency Law
Effective June 1, 2025, New Jersey employers with 10 or more employees will be required to join the ranks of New York employers and disclose wage information in new or transfer job postings advertised internally or externally. New Jersey employers must disclose, at a minimum, a range of hourly wage or salary, and a general description of benefits and other compensation programs for which the position would be eligible.
Additionally, and unlike other pay transparency laws, for example, New York’s, covered employers will be required to “make reasonable efforts” to make known to all current employees in relevant departments promotion opportunities that are advertised internally or externally prior to making a promotion decision. The law excepts promotions made based on years of experience or performance or “on an emergent basis due to an unforeseen event.”
Covered New Jersey employers should ensure they train their employees responsible for hiring and promotions regarding these new requirements to ensure compliance.
Non-Disparagement Clauses – Hi, I’m the Problem It’s Me – Under NJLAD’s Non-Disclosure Prohibition
In May of this year, the New Jersey Supreme Court in Savage v. Twp. of Neptune determined that the prohibition in the New Jersey Law Against Discrimination (NJLAD) against “any employment contract or settlement agreement which has the purpose or effect of concealing the details relating to a claim of discrimination, retaliation, or harassment (hereinafter referred to as a ‘non-disclosure provision’)” includes broad non-disparagement clauses. The Court reasoned, “[t]o accuse someone of misconduct is to disparage them. To provide details about allegations of discrimination, retaliation, or sexual harassment by an employer, then, would naturally “tend to disparage or impugn” the employer’s “reputation.” Savage v. Twp. of Neptune, 257 N.J. 204, 220-21, 313 A.3d 65, 75 (2024). As a result, the Court found the non-disparagement clause was an agreement that would prevent the employee from revealing details about claims of discrimination directly in conflict with the NJLAD. Therefore, the Court invalidated the non-disparagement provision of the agreement and remanded the case to permit the plaintiff to apply for attorneys’ fees.
Notably, the Court determined it was possible to permit a non-disparagement clause that was very narrowly tailored. However, to do so, it must except not only the claim that may be the subject of the relevant settlement agreement, but any claim, including past, present or future claims of discrimination, harassment or retaliation. In most cases, it will likely be difficult to achieve the result once intended from a non-disparagement clause based upon this ruling. Employers should understand when entering into settlement agreements that non-disparagement clauses are unlikely to be enforceable, unless very narrowly tailored, and if so tailored, likely will not prevent the kind of speak you typically hope to with such clauses.
You’re Losing Me – There’s No Private Right of Action for NJ Employer Marijuana Violations?
The Third Circuit had some good news for employers in a ruling that came down December 9 in Zanetich v. Wal-Mart Stores East, Inc., No. 23-1996, 2024 U.S. App. LEXIS 31051, at *1 (3d Cir. Dec. 9, 2024). The Third Circuit held the New Jersey Cannabis Regulatory Enforcement Assistance and Marketplace Modernization Act (CREAMMA) did not permit a private right of action, and, thus an applicant denied a position because he tested positive on a pre-employment drug test for marijuana was unable to pursue his claims, and his case dismissed. Instead, the Court held such law was enforced only by the New Jersey Cannabis Regulator Commission (CRC), the regulatory body created to enforce CREAMMA. New Jersey enacted CREAMMA when marijuana became legalized and regulated. CREAMMA, among other things, prohibits discrimination against an applicant or employee based upon their use or non-use of marijuana and prohibits adverse action to be taken against employees based solely on a positive drug test showing marijuana.
Although this is good news inasmuch as, unless the State Supreme Court ultimately finds otherwise, employees will not have a private right to sue, this is not a free pass to revert to prior drug testing procedures in New Jersey. Regardless of lacking a private right of action, CREAMMA is still very much in effect and prohibits employers from discriminating against employees based upon testing positive for marijuana and imposes arduous requirements to test employees for marijuana. The reasoning being there is no such test for marijuana that can immediately determine if an individual is under the influence. Instead, the drug stays in one’s system long after they have finished using, so terminating someone simply because it was in their system would be unfair if the use had been the prior evening while they were off duty.
Employers should familiarize themselves with such requirements if they conduct drug testing pre or during employment to avoid running afoul of CREAMMA. Although it has not yet invoked such power, the CRC still, seemingly, has authority to enforce CREAMMA’s employment requirements. The determination in this case also hinged on his being an applicant and not an employee. It is possible based upon the dicta in the case that had this individual been an employee who had received an adverse action the determination may have been different. Lastly, to the extent this was not the intent of the law, and some of the judges in dissent have insisted it was not, the law may be amended to explicitly provide for a private action.
Is it Over Now?
I can read your mind: “She’s having the time of her life.” It’s true this Taylor Swift-themed post was the most fun I ever had writing a blog post. If you have any questions about any of the upcoming employment laws, I wish you would reach out to discuss further, so I can help you wade through these treacherous waters and help you from saying I did something bad and created bad blood with employees. I hope you each have a restful and relaxing holiday season – whether it’s enjoying snow at the beach, celebrating your champagne problems or traveling to Paris or Florida!!! – have a Bejeweled and Enchanted New Year!