Winter 2008
All We Do Is Work
SM
LOng IslandEMPLOYER
A BULLETIN
ON
EMPLOYMENT, LABOR, BENEFITS AND IMMIGRATION LAW
New York State’s
Response to the
Misclassified Worker
T
he classification of workers as independent contractors has come under increased scrutiny from
federal and state government agencies and legislators, pro-labor organizations and employee advocacy
groups. Efforts to establish clearer guidelines and
impose greater sanctions on employers who misclassify workers as independent contractors has been
motivated, in good part, by the desire to bring
increased revenue to the state and federal governments. An employer is not required to pay state
unemployment insurance taxes, workers’ compensation premiums, or federal Social Security and
Medicare contributions, on behalf of independent
contractors. Independent contractors also are not
covered by minimum wage and overtime laws and
most workplace safety and discrimination statutes,
and are excluded from participating in the formation of unions.
The need for New York businesses to classify workers properly has been brought into sharp focus by
Governor Eliot Spitzer’s September 10, 2007,
Executive Order establishing an inter-agency Task
Force to better prevent worker misclassification.
Task Force members will consist of representatives
from an assortment of key agencies and offices,
including from the Commissioner of Labor. The
Task Force will issue an annual report detailing its
actions (in enforcement and education) and suggesting legislative amendments. While no statutory
changes have been made to the enforcement mechanisms available to State agencies, the Task Force is
responsible for facilitating the filing of complaints
and the identification of potential violators. To this
end, the Task Force will seek ways in which affected
agencies can “pool, focus and target investigative
and enforcement resources.”
FOR
CLIENTS AND FRIENDS
OF
JACKSON LEWIS LLP
Legislation in other states addressing the worker
misclassification issue may provide direction for the
New York Task Force. New Jersey Governor Jon
Corzine signed the Construction Industry
Independent Contractor Act, which includes criminal penalties, fines of up to $150,000, private causes
of action for aggrieved employees (including attorneys’ fees) and debarment from public works projects for knowing violations of the law. Connecticut
Governor Jodi Rell also approved legislation that
allowing the Connecticut Department of Labor to
issue “Stop Work Orders” against companies that
misclassify workers as independent contractors.
Illinois and Massachusetts passed laws establishing a
presumption that a worker is an employee unless the
putative employer can demonstrate the individual
operates or works for an independently established
business operation. In Kansas (where an estimated
$40 million a year in state payroll taxes is lost due
to misclassification), a law went into effect on July
1, 2007, authorizing penalties for an employer’s
intentional misclassification of workers and allows
the Kansas Departments of Revenue and Labor to
engage in information sharing to enforce the new
law.
Based on hearings before a U.S. Congressional
Subcommittee that examined employee misclassification, the Task Force likely will continue to focus
on retail industry employers, as well as employers
in the construction industry, janitorial and security
services, media groups, manufacturing and the
high-tech industry.
As New York employers await the Task Force’s first
report for guidance on enforcement and for a clearer
definition of independent contractor, companies
should continue to follow Department of Labor
and IRS guidelines.
For additional information regarding
this topic, please contact Jeffrey W. Brecher at
(631) 247-4652; brecherj@jacksonlewis.com or
Craig S. Roberts at (631) 247-4616;
robertsc@jacksonlewis.com.
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INSIDE THIS ISSUE:
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3
New York Court of Appeals
Agrees to Weigh In on Scope
of State Whistleblower Law
BACK TO BASICS
MANAGEMENT EDUCATION
OPPORTUNITIES
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Jackson Lewis News
SHRM-LI Corner
LOng IslandEMPLOYER
JACKSON LEWIS
LONG ISLAND OFFICE
Jackson Lewis LLP
58 South Service Road, Suite 410
Melville, NY 11747
Phone: (631) 247-0404
Fax: (631) 247-0417 or 0418
www.jacksonlewis.com
EDITORIAL BOARD:
Matt Halpern, Esq.,
631-247-4603,
halpernm@jacksonlewis.com
Jeffrey Brecher, Esq.,
631-247-4652,
brecherj@jacksonlewis.com
Roger S. Kaplan, Esq.
631-247-0404
kaplanr@jacksonlewis.com
Mei F. So, Esq.
212-545-4000
som@jacksonlewis.com
This update is provided for
informational purposes only. It is
not intended as legal advice nor
does it create an attorney/client
relationship between Jackson Lewis
LLP and any readers or recipients.
Readers should consult counsel of
their own choosing to discuss how
these matters relate to their individual circumstances. Reproduction
in whole or in part is prohibited
without the express written consent
of Jackson Lewis LLP.
This update may be considered
attorney advertising in some
states. Furthermore, prior results
do not guarantee a similar
outcome.
Jackson Lewis LLP represents
management exclusively in
workplace law and related
litigation. Our attorneys are
available to assist employers in
their compliance efforts and to
represent employers in matters
before state and federal courts
and administrative agencies.
For more information, please
contact the attorney(s) listed or
the Jackson Lewis attorney with
whom you regularly work.
© 2008, Jackson Lewis LLP
New York Court of Appeals Agrees to Weigh
In on Scope of State Whistleblower Law
N
umerous states have enacted legislation providing protection to employees who complain
about their employer’s illegal conduct. New York
did so in 1984 when it enacted the State
Whistleblower Law, Section 740 of the State Labor
Law. Section 740, however, provides only limited
protection. The law protects only those employees
who disclose activities that are in actual violation of
the law; an employee’s reasonable belief that an
employer violated the law is insufficient. See Bordell
v. General Elec. Co., 88 N.Y.2d 869 (1996). Thus, if
an employee complains about an alleged illegal
activity but no actual violation of law is found, the
employee has no claim under Section 740. This is
true even if they are fired for disclosing the alleged
violation. The violation the employee discloses also
must be one that creates a “substantial and specific
danger to the public health or safety” or constitutes
“health care fraud” (defined in the Penal Law as providing materially false information for the purpose
of requesting payment from a health plan). See N.Y.
Labor Law § 740(2)(a). Thus, even if an employee
discloses illegal conduct, if that conduct does not
create a danger to the public health or safety, and
that danger is not “substantial”, the statute is inapplicable.
Due to these limitations, health care workers reporting patient neglect were not covered by Section 740
because, although the wrongdoing they disclosed
may have presented a danger to the health and safety of the individual patient, it did not threaten the
health and safety of the public at large. See e.g., Kern
v. DePaul Mental Health Services, Inc., 152 A.D.2d
957 (4th Dept. 1989). In reaction to decisions like
this, in 2002 the New York legislature enacted
Labor Law Section 741. Under Section 741, unlike
Section 740, an employer is prohibited from taking
any retaliatory action against an employee who discloses an activity, policy or practice of the employer
that the employee in good faith, “reasonably
believes” constitutes improper quality of patient
care. N.Y. Labor Law § 741. The employee need
not prove an actual violation to recover. The
employee also is not required to prove the activity
reported creates a substantial danger to public
health or safety; a practice that constitutes “a significant threat to the health of a specific patient” is
enough.
Although Section 741 broadened the protection for
health care workers, disputes have arisen regarding
exactly who is covered by the law. While the
statute states it applies to “any person who performs
health care services,” it does not define or explain
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who those employees are. Nurses and doctors would
be covered, but what about other workers in a hospital that perform administrative work related to
health care services?
The New York Court of Appeals has agreed to
resolve the question. The case involves an employee
who worked for Staten Island University Hospital as
the “Manager of Volunteer Services” and later as
“Director — International Patient Program” who
alleged her employer violated Section 741 after she
reported improper patient care. She was responsible
for coordinating and developing the appropriate
services to be offered to international patients, coordinating marketing of the program, managing and
training personnel providing translation services,
developing activities for international patients, and
collecting patient satisfaction questionnaires. But
she did not directly provide medical treatment.
A federal district court dismissed the complaint,
finding that she was not covered by the whistleblower law because she did not provide “health care services”. On appeal, the United States Court of
Appeals for Second Circuit acknowledged the statute
simply was unclear whether individuals providing
services beyond the provision of medical treatment
were covered. See Reddington v. Staten Island University
Hospital, No. 06-4152 (2d Cir. Dec. 14, 2007). The
Court noted that the law might apply to a hospital’s
insurance claims processor or pharmacist, but not
necessarily. Finding the scope of the law to be of
“great importance to the public policy of New
York”, the Second Circuit asked New York’s highest
court to resolve the question by answering the following certified question: Does the definition of
employee in New York Labor Law § 741 encompass
an individual who does not render medical treatment, and under what circumstances? On January
10, 2008, the New York Court of Appeals accepted
the request and agreed to hear the case.
If the State court interprets the statute broadly,
employers in the health care industry will face
greater exposure to whistleblower claims. Even
employees who do not perform medical treatments
could be covered. The Court may craft a standard
that ties coverage only to those individuals who have
the knowledge and training to form a reasonable
belief that the employer has engaged in a practice
that constitutes improper patent care. A decision is
expected in the next few months.
For additional information regarding this topic,
please contact Jeffrey Brecker at (631) 247-4652 or
breckerj@jacksonlewis.com.
BACK TO BASICS
In “Back to Basics” we provide answers to employment and labor law questions that often plague employers.
An employee requested paid bereavement leave
for the death of her spouse’s grandparents.
Do employers have to provide paid time off for
bereavement purposes?
No. New York does not require employers to
provide paid time off for bereavement purposes. Many employers, however, voluntarily
provide paid leave for the death of a close
family member (mother, father, sibling, child,
grandparents), but do not extend leave for the
death of in-laws, or limit it to the parents or
siblings of their spouse, not ordinarily the
spouse’s grandparents. However, nothing
prohibits an employer from voluntarily doing
so. Once a policy has been established, an
employer should follow it, updating it as
necessary.
Can an employer in New York conduct
random drug tests?
Yes. Random drug testing often is viewed
as the most effective drug test because the
continuing chance of being tested inhibits
illegal usage. However, random drug tests
may be costly since a significant number of
employees must be tested during each testing
cycle throughout the year, in order to maintain the credibility of the program. The U.S.
Department of Transportation provides special rules for random testing for employees
subject to its authority.
If you have an employment law question for
“Back to Basics,” e-mail Jeffrey W. Brecher, Esq.,
at brecherj@jacksonlewis.com.
MANAGEMENT EDUCATION OPPORTUNITIES
Each year Jackson Lewis, in conjunction with the Long Island Chapter of the Society for Human
Resource Management, presents a series of monthly labor and employment law breakfast programs.
One session is held each month between October and July. The sessions run from 8:30 – 10:00 a.m.
at the Melville Marriot. The cost is $45 per session and proceeds go to SHRM-LI. The remaining
sessions scheduled this year are:
March 20, 2008
Benefits “Q and A”: Get The
Benefit From our Benefits Experts
June 19, 2008
The EEOC’s and OFCCP’s New Systemic
Discrimination Initiatives
April 17, 2008
Managing Business Exposures Successfully:
Are You “All In” For The Continual
Wave Of Workplace Risks?
July 17, 2008
Dealing With HR Dilemmas
In The Digital Age
May 15, 2008
Wage/Hour Update: The Nitty Gritty
Of Commissions, Bonuses, Incentive
Payments, Wage Deductions,
Paid Time Off And Travel Time
For further information contact,
Wendy Mellk at (631) 247-4614 or
mellkw@jacksonlewis.com.
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JACKSON LEWIS NEWS
LOng IslandEMPLOYER
Continuing the Firm’s national expansion, the firm
has opened new offices in Detroit, Las Vegas,
Phoenix, New Orleans, and Philadelphia. Jackson
Lewis now has 34 offices nationwide, making it
one of the largest labor employment law firms in
the country.
We are pleased to announced that two attorneys
in the Long Island office, Jessie Cadet and Craig
Roberts, have been elevated to partner. Jessie
advises clients on affirmative action matters and
Craig advises clients on a variety of employment
law issues with particular emphasis on wage and
hour compliance and disability management.
Congratulations to both!
The 19th Annual Jackson Lewis Corporate Counsel
Conference will be held at the Bellagio Hotel and
Casino in Las Vegas, Nevada, on April 23-25, 2008.
“The Evolving Workplace 2008” will cover emerging issues and preventive strategies with a focus on
disability and leave management. Guest speakers
will include James Carville and Mary Matalin,
Washington’s ultimate “political power couple”,
who will discuss the presidential election in a special
morning session.
We are pleased to announce that Paul DeCamp has
joined the firm as Partner. Paul joins the firm upon
completing his service as Administrator of the U.S.
Department of Labor’s Wage and Hour Division.
Appointed by President George W. Bush, Paul led
the federal agency that interprets and enforces the
Fair Labor Standards Act, the Family and Medical
Leave Act, the Davis-Bacon Act, the Service
Contract Act, and close to seventy other federal
statutes. Paul is in the firm’s Washington D.C.
Region office and co-chairs the Firm’s Wage and
Hour Practice Group.
Corner
Not a SHRM member? You are missing out on being a part of one of the best chapters in a large and
vibrant 200,000+ member professional organization. Did you know that in addition to the Legal
Hotline staffed by Jackson Lewis, membership includes:
•
•
•
•
Job Bank
On-line Membership Directory
Networking Opportunities
Monthly Meetings
•
•
•
•
Newsletters
Annual Conference
Undergraduate Scholarship
Graduate Scholarship
To find out how to register and to learn more about the Long Island Chapter of SHRM,
please go to www.shrmli.org.
UPCOMING EVENTS
Wednesday, February 27th
HR Scorecard & Metrics
Dinner Meeting – 5:30 – 8:30 p.m.
Mansion @ The Woodlands, Woodbury
Wednesday, March 26th
Best Practices in HR Training Delivery
Dinner Meeting – 5:30 – 8:30 p.m.
Mansion @ The Woodlands, Woodbury
Friday, April 11th
HR: Staying in Tune with Diversity
17th Annual Conference & EXPO – 7:30 a.m. – 4:30 p.m.
Crest Hollow Country Club, Woodbury
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