April 27, 2010
To: Staffing Companies of New York
Re: Lobby Day in
After
a period of quiescence, the
As
you may or may not know, the Assembly has introduced and passed what is being
called the Fair Pay Act. It purports to
ban discrimination in setting pay rates that results in paying protected
minorities less than other workers. This
bill would be clearly duplicative of existing Equal Employment Opportunity
legislation except that it also re-introduces the concept of “comparable
worth,” which holds that a government panel can deem different jobs similar in
value and require that they be compensated equally. This would be a huge distortion of the labor market by allowing the government,
using “job comparison methodologies” to set wages instead of a free
market. It is difficult to conceive of a
worse labor policy to enact in the face of
Unfortunately,
this bill has already passed one house, the Assembly, so we have to oppose it
in the Senate. It too is Democratically
controlled, but the leadership in the Senate is very concerned about holding on
to their slim two seat majority, and thus are more inclined to listen to the
more cautious views of small businesses and upstate New Yorkers.
Tuesday,
May 4th, NYSA will convene in
Sincerely,
Alec Courtney
Alexander
A. Courtney
President,
Tri-City Manpower, Inc.
NYSA
Legislative Chair
Counsel’s Corner
NEW YORK STATE
DEPARTMENT OF LABOR ISSUES ADDITIONAL GUIDANCE FOR NEW HIRE WAGE NOTIFICATIONS
by Joel A. Klarreich, Esq.
As we previously reported, New York has amended Section 195(1) of the State’s Labor Law to require, among other things, that employers provide certain information in writing to employees at their time of hire (i.e., before any work is performed). Section 195(1), as amended, requires that employers notify each employee in writing “at the time of hiring of the rate of pay and of the regular pay day… and obtain a written acknowledgement from each employee of receipt of this notice.” The amendments also require that employers notify all employees who are eligible for overtime compensation in writing of their respective hourly and overtime rates of pay.
In October 2009, the New York State Department of Labor issued guidance specific to staffing firms (the “Staffing Guidelines”), as we previously advised.[1] (The Staffing Guidelines are available here: http://www.labor.state.ny.us/formsdocs/wp/LS50.pdf.)
More recently, in order to assist all employers comply with the wage notification requirements, the Department of Labor issued “Guidelines for Written Notice of Rates of Pay and Regular Payday” (the “General Guidelines”), which implement the amendments and provide protections for workers that extend beyond the provisions of the Labor Law itself. (The General Guidelines are available here: http://www.labor.state.ny.us/formsdocs/wp/LS52.pdf.)
Staffing Firms Must Notify Temporary
Employees of Their Specific Overtime Exemption (If Any) at the Time of
Assignment
The General Guidelines provide that the written wage notification given to an exempt employee must explicitly state his or her specific exemption from overtime. Thus, according to the General Guidelines, employers must determine whether their new employees are exempt from overtime and, if so, provide the employee with the basis for the exemption in the written notice.
On the other hand, the Staffing Guidelines provide that temporary employees must be informed of the specific basis for their overtime exemption “either verbally or in writing … [w]hen a temporary help firm assigns [the] employee to perform work at or services for other organizations …” (emphasis added).
Because the General Guidelines expressly acknowledge that “separate guidelines have been developed by the Department for use by temporary help firms,” it seems clear that staffing firms should continue to rely on the Staffing Guidelines and supply temporary employees with the basis for their specific overtime exemption at the time of assignment either verbally or in writing.
The Staffing Guidelines Remain in
Effect
As mentioned above, temporary help firms must continue to comply with the Staffing Guidelines.
The Staffing Guidelines provide that temporary help firms must supply the following information in writing to the applicant-employee “at the time of initial interview or hire”: (i) the range of hourly wages he or she will likely earn based upon his or her qualifications and assignment suitability (the range may not be excessively broad, but rather based upon a good faith estimate of the typical wage earned by similarly qualified employees working at assignments similar to those for which the individual is eligible and likely to be assigned); (ii) the designated pay day, unless the designated pay day cannot be established at that time (if a fixed pay day cannot be established at the time of hire/interview, the applicant-employee must be informed that the pay day may vary depending upon the usual practice at the assignment; and (iii) the employee’s rights, “in general,” to overtime compensation as contained in the model temporary help firm wage notification form, discussed below. (Staffing firms must also provide the applicant-employee with a copy of the form, obtain the individual’s signature on the form, give the individual a copy of the signed form and keep the original signed form in the employer’s files for six years.)
At the time of specific assignment, the Staffing Guidelines require that the temporary help firm notify the employee either verbally or in writing of (i) the specific designated pay day for the particular assignment; (ii) the actual hourly rate of pay for the assignment; and (iii) the overtime rate of pay he or she will receive, or, if applicable, that the position is exempt from overtime compensation and the basis for the overtime exemption.
Finally, the Staffing Guidelines provide that employees of temporary help firms must receive with each paycheck a statement listing (i) the number of hours worked, regular and overtime, for the wages in the paycheck; and (ii) the actual regular and overtime wage rates paid for the hours worked.
Special Requirements for
Commissioned Sales Employees
Because it is extremely difficult for employers to specify the hourly rate of pay for commissioned sales employees, staffing firms may have struggled to comply with the wage notification requirements with respect to such commissioned employees (e.g., recruiters).
The General Guidelines clarify how the new wage notification requirements relate to such commissioned employees. Specifically, the General Guidelines provide that an employer will be in compliance with the amendments with respect to commissioned sales employees if the notice:
(1) meets all of the requirements of Labor Law Section 191(1)(c), which as we previously reported requires, among other things, that the terms of employment for commissioned salespersons is (i) reduced to a writing, (ii) signed by both the employer and employee, and (iii) includes a description of how wages, salary, draw, commissions and all other monies earned and payable are calculated;
(2) informs the salesperson if he or she is eligible for overtime pay, and if not, specifies the exemption under which he or she falls;
(3) advises the salesperson of the method of calculating his or her overtime pay, including commissions as part of the regular rate;
(4) informs the salesperson of his or her designated pay day or method for determining when the salesperson will be paid;
(5) is acknowledged in writing as received by the employee; and
(6) is kept on file for six years.
In order to satisfy the new commissioned salesperson notification requirements, employers should consider simply attaching their commissioned salesperson’s employment agreement (which agreement must comply with Section 191(1)(c)) to a wage notice containing any additional information required by the General Guidelines (i.e., the information listed in (2) through (4), above).
Model Notices Issued
Although the Department of Labor’s guidance has been inconsistent with respect to whether employers are required to use any particular or official notice form, it has stated in the General Guidelines that “no particular form is required” to comply with the wage notification requirements. Thus, while the Staffing Guidelines state that staffing firms must provide temporary employees with the “Notice and Acknowledgement of Wage Rate(s) / Temporary Help Firms” form (available here: http://www.labor.state.ny.us/formsdocs/wp/LS51.pdf), it is likely that firms may alter the form or adopt their own substantially similar form (provided the form otherwise meets the requirements of the Staffing Guidelines).[2]
The Labor Department has also issued a series of additional model notice forms relating to other employment compensation arrangements, such as for other hourly employees and exempt employees. (The additional model notice forms are available here:
http://www.labor.state.ny.us/workerprotection/laborstandards/workprot/lshmpg.shtm.)
Conclusion
Staffing firms which have not already done so must act to comply with the amended Section 195(1) and ensure their wage notification forms and conduct complies with the Department of Labor’s guidance.
* * * * * * * * * * * * * * * *
Joel
A. Klarreich, Esq. is a partner at the New York City law firm of Tannenbaum
Helpern Syracuse & Hirschtritt LLP, where he chairs the Corporate, Staffing
Industry and Franchise Departments. Jason B. Klimpl, Esq., an associate at the
firm, assisted in the preparation of this article.
This
article is general in nature and is not intended to be a substitute for legal
or tax advice or a legal opinion rendered in response to a specific set of
facts. This article may be considered attorney advertising in some jurisdictions.
[1] The Staffing Guidelines apply to temporary help firms’ temporary employees, as opposed to their in-house employees, such as recruiters.
[2] The New York State Department of Labor’s Division of Labor Standards has taken the position that staffing firms must provide their FEIN on the wage notification form. The New York Staffing Association will continue to work with the Division to represent the concerns of the staffing industry with respect to this issue.
March 31, 2010
Certain Concerns of the
the New York State Department of Labor’s Wage Notification Guidance
I. Employer FEIN Issue
The “Notice and Acknowledgement of Wage Rate(s) for Temporary Help Firms” (LS 51) contains a line onto which staffing firms must enter their FEIN.
Notably, however, the model notices issued by the Department of Labor (i.e., LS 54, LS 55, LS 56, LS 57, LS 58, and LS 59) for all other employers provide that such employers’ provision of the FEIN is merely “optional.” There is no valid reason why staffing firms are subject to disparate treatment with respect to the requirement to provide a FEIN.
Moreover, an employer’s confidential FEIN is akin to its social security number, which many states have gone to legislative lengths to protect. The FEIN is used in various important and confidential corporate, business, tax, and other filings. Thus, the misuse of a company’s FEIN could greatly damage its interests and reputation. The requirement presents a particular danger to staffing firms, which would be forced to provide the sensitive FEIN to potentially thousands of applicant-employees.
The I.R.S. has recognized the extremely sensitive nature of an employer’s FEIN. Thus, when applying to the I.R.S. to access to a company’s FEIN, a third-party must first obtain proper authorization by becoming a Third Party Designee and filling out the requisite paperwork.
Finally, it is unclear why an employer’s provision of other contact information (such as entity name, address, and other information) is insufficient to properly indentify such employer, whether to the applicant-employee or the DOL official reviewing the form.
Accordingly, staffing firms should not be required to provide their FEIN on the wage notification form.
II. Overtime Exemption Basis Notification Issue
The “Guidelines for Written Notice of Rates of Pay and Regular Payday” (LS 52) (the “General Guidelines”) provides that employers must inform their employees whether they are exempt from overtime (and the basis for the exemption) “at the time of hiring, before any work is performed.”
On the other hand, Section II of the “Guidelines for Notice and Acknowledgement of Wage Rate(s) for Temporary Help Firms” (LS 50) (the “Staffing Guidelines”) provides that staffing firms must inform employees whether they are exempt from overtime (and the basis for any such exemption) orally or in writing at the time of specific assignment. In its introduction, Guidelines expressly recognize that “[t]emporary help firms cannot [i.e., are unable to] supply this information at the time of hire ….”
However, there are instances in which a staffing firm may know whether an employee will or will not be exempt from overtime (and the basis for any such exemption) immediately upon hire. Repeatedly informing an employee of his or her overtime status at the time of specific assignment would be redundant, unnecessary, and overly burdensome where the staffing firm has already informed the employee of his or her status at the time of hire.
Considering the above (and the spirit of the Staffing Guidelines), the Staffing Guidelines should be modified to provide that staffing firms have the option to comply with the General Guidelines with respect to supplying such overtime exemption information to the employee at the time of hire (if known), thereby relieving the staffing firm of the obligation to provide such information at the time of each particular assignment.
March 22, 2010
House Approves Health Care Reform Bill
Urge Your Senators to Oppose
House Changes to Senate Bill
The U.S. House
of Representatives voted late Sunday to approve a sweeping health care reform
bill that, beginning Jan. 1, 2014, would require all but the smallest employers
to pay a penalty to the government if they don’t provide health insurance to
their employees.
In the end,
after weeks of relentless political pressure from Democratic leaders and the
White House, House Democrats approved the Senate health care reform bill by a vote
of 219-212. Not a single Republican voted for the bill; 34 Democrats voted no. Then,
by a vote of 220-211, the House approved a package of amendments to the bill demanded
by Democrats who were unhappy with the language in the Senate bill. The main
Senate bill now goes to the president for signature, although the timing is
unclear.
The tide
turned in favor of the Democrats when Rep. Bart Stupak (D-MI) announced Sunday that
he had reached agreement with the White House on a way to address the concerns
of pro-life Democrats who had threatened to vote no on the Senate bill because they
said it did not go far enough to ensure that no federal money would be used to
fund abortions. To mollify the group, President Obama said he would sign an
executive order barring the use of federal money for such purpose, which
confirms current law.
The House amendments
to the Senate bill now must go to the Senate, which will consider them under
fast-track “reconciliation” procedures that require only 51 votes to pass. The
Democrats’ goal is to complete work on the legislation before the congressional
Easter recess, scheduled to begin Mar. 29. Senate Republicans are expected to
mount a furious effort to block the House amendments by offering multiple
amendments and making points of order which, if sustained by the Senate
parliamentarian, would require 60 votes for Democrats to defeat.
If the Senate
makes even one change to the House amendments, it must go back to the House for
further action, which could delay, or even derail, passage of the amendments. If
Congress can’t agree on amendments, it would leave the original Senate bill
intact, with significant implications for employers.
Employer “Shared Responsibility”
Provisions
Under the Senate
bill, “large” employers (those with 50 or more full-time employees) that do not
offer health insurance coverage to their employees would pay a government assessment
if they have even one employee who is eligible for and receives government tax subsidies.
If a large employer
does not offer health insurance coverage to any of its employees and has an employee
who receives a tax subsidy, it would pay up to $750 annually for every
full-time employee. The fee would be assessed on a monthly basis ($62.50). If a
large employer offers coverage to some employees but not others, and has one or
more employees who receive tax credits, the employer would pay either $3,000
for each full-time employee receiving a tax credit or $750 for every full-time
employee, whichever amount is less. Those fees also would be assessed monthly.
Under the
original senate bill, “full-time” was defined as someone who works an average
of at least 30 hours per week, but the bill failed to specify over what period
of time an employee had to work full-time. Thus, a key ASA goal was to amend
the bill to require employees to work a reasonable period of time to be
considered full-time. ASA, along with other major employer groups, urged a
quarterly work requirement of 390 hours, but the Senate set the period at one month.
Hence, staffing firms can exclude employees who don’t work full-time for the
full month from their monthly assessment headcount. Without the amendment, staffing
firms could have been forced to pay a full month’s assessment for one week’s (or
even one hour’s) work—a catastrophic result that a high-level Senate aide said was
where the legislation was headed had ASA not intervened.
To the
dismay of employers, the House amendment introduced last week increased the maximum
annual employer assessment from $750 per full-time employee to $2,000 per year—or
$167 per month. In response to this dramatic increase, ASA sent a letter to House
Speaker Pelosi and Senate Majority Leader Reid stating, in the strongest terms,
that the staffing industry could not absorb fees at that level. In addition, ASA
sent an alert to all staffing firms last week urging them to oppose the bill because
of the unacceptable impact of such fees on the industry.
If Congress
fails to agree on amendments to the Senate bill, the maximum annual assessment on
firms that don’t provide health insurance would remain at $750 per full-time
employee. Therefore, ASA is urging all staffing firms to immediately contact
their Senators and urge them to vote “no” on the amendments bill. A sample
letter and Senators'
contact information is available on the ASA Web site. If you use the sample letter, be sure to fill
in the blank indicating the number of jobs you provide in your Senators’ state
each year. You can add other pertinent company-specific information, but keep
it short.
“Two-Tier” Health
Plans
Many
staffing firms have asked whether the legislation would allow staffing firms to
continue to offer their temporary and contract employees a lower level of
health insurance coverage than they offer to their regular full-time employees,
or no coverage at all.
The Senate
bill provides that all group health plans must satisfy nondiscrimination
provisions of the Internal Revenue Code that currently apply only to
self-insured health insurance plans. Under current law, a self-insured health plan will be considered discriminatory
if it favors highly compensated individuals with regard to eligibility or
benefits. A plan can comply with the rules by satisfying either of two tests:
covering a specified percentage of employees or covering a nondiscriminatory
classification of employees. Employees with less than three years of
service, employees under age 25, and part-time or seasonal employees, among
others, can be excluded when applying the tests.
Most
staffing firms provide group health coverage to their regular full-time headquarters
and branch office staff, but not to their assigned employees. Hence, satisfying
the percentage coverage test would be problematic. But staffing firms generally
should be able to satisfy the rules by covering a nondiscriminatory classification of employees—for example,
its home office or branch staff, or employees assigned to particular
clients. Several large staffing firms maintain self-insured health plans
and have operated under these rules for many years without problems.
Whether a
plan covers a nondiscriminatory classification of employees is based on the
facts and circumstances of each case. ASA outside benefits counsel says that Internal
Revenue Service rulings provide a reasonable basis for asserting that a
staffing firm plan that covers its regular full-time office staff and not its
assigned temporary and contract employees is a reasonable classification,
provided that, on the particular facts, the firm can demonstrate that the plan
provides coverage to its regular full-time employees in all compensation
ranges, with the lower and middle ranges being covered in more than nominal
numbers.
Small Employer Exemption
Small employers
are exempt from paying employer assessments. Under the Senate bill, an employer
will be considered “small” if it employed less than 50 full-time employees on average
business days during the preceding calendar year. The House amendment would
include hours worked by employees on a part-time basis—i.e., less than 30 hours
per week—in determining whether an employer meets the 50-employee threshold. Seasonal
workers employed for 120 days or less in a calendar year may be excluded in
determining whether an employer has 50 full-time employees. The term “seasonal
worker” will be defined in regulations to be issued by the U.S. Secretary of
Labor.
Once final legislation
is signed by the president, ASA will undertake a comprehensive analysis of the new
law. In the coming weeks and months, we will develop workshops, Webinars, and
educational programs and materials to help ASA members understand the new
requirements and help them prepare for the coming changes. Because the employer
assessment provisions don’t go into effect until Jan. 1, 2014, there is time to
assess options and plan strategies.
Ed Lenz
March [date], 2010
RE: Health Care Reform
Dear Senator [last name],
Staffing
firms employ over two million temporary and contract workers throughout the
The staffing industry has worked
with Congress over the past year in support of health care reform legislation
that would reduce costs for individuals and businesses and expand coverage for
more Americans. We’ve also worked to ensure that the unique operational
concerns of firms that employ temporary and contract workers are considered in
the legislation.
Extremely high employee turnover
(over 300% annually) makes it impractical for staffing firms to provide health
insurance for most employees. Firms would have to pay fees in lieu of coverage.
The health care amendments passed by the House would impose an annual fee of $2,000
per employee—almost triple the fee in the original Senate bill. And because those
fees are not tax deductible, the actual financial cost would be much higher.
Companies like mine are making it
possible for American businesses to put people to work in an uncertain economy.
As the recovery gains surer footing, businesses will resume hiring workers on a
permanent basis. Meanwhile, the jobs we provide offer important incomes and critical
lifelines for millions of Americans, and a chance to be first in line when
permanent jobs return.
There is no way my company can
absorb the employer fees imposed by this legislation without hurting our ability
to continue to create new jobs. Therefore, as an employer who is now hiring, I
strongly urge you to vote “no” when the house amendments come to a final vote
in the Senate.
Sincerely,
Your Name Here
February 24, 2010
NY City Council to Introduce Employer Paid Sick Leave
Bill-YOUR Help is Needed to Fight It!
By Jim Essey, Metro Legislative Chair
The NY City Council is in the final stages of introducing a
bill that would compel employers to provide up to 9 days of paid sick leave per
year. NYSA has hired a lobbyist to work with the Council on the final
bill to lessen the cost implications for our industry. We are asking for
a carve out entirely for temporary employees. Failing that, we are proposing a
waiting period before people are covered and a minimum hours worked test per
week before someone can accrue hours. Our position is that this employer
mandate will increase our costs of doing business which very likely would be
passed on to customers in the form of higher rates. This could either
hurt our customers or reduce demand and lose jobs at the very time NY needs
jobs.
We are planning some meetings with key City Council members
to discuss our proposed bill changes. In these meetings, it will be
helpful if we can tell the members specific companies in their districts that
would be hurt by our higher pricing. To this end, please review the list
of council members below and their districts. Then look at your client list and
see if you service any companies in those specific geographic districts. If you
do, please fill out the spreadsheet and indicate the company name and
their address. Be sure to save your changes to the spreadsheet and then
send back to Jennifer Kelley at jennifer@nystaffing.org. Please know that all companies will be kept confidential and only shared with our lobbyist and General Counsel.
Additionally, if you know any of the Council Members on the
list personally please let us know so we can include you in the meeting with
that member. Personal relationships really make a big difference in situations
like this.
If you have any questions or would like to discuss this further, please feel
free to contact me at jessey@tempositions.com
or 212 916-0859.
Council Members with influence on the bill (see if you have
any clients in their districts-provide company names and addresses on attached
spreadsheet):
|
Committee Member |
1/21/2010 |
12/31/2013 |
District 24 |
Briarwood,
Fresh Meadows, |
Queens |
|
|
Committee Member |
1/21/2010 |
12/31/2013 |
District 08 |
Manhattan
Valley, East Harlem in |
Manhattan |
|
|
Committee Member |
1/21/2010 |
12/31/2013 |
District 48 |
Manhattan
Beach, Sheepshead Bay, |
Brooklyn |
|
|
Committee Member |
1/21/2010 |
12/31/2013 |
District 47 |
Coney
Island, Gravesend, |
Brooklyn |
|
|
CHAIRPERSON |
1/21/2010 |
12/31/2013 |
District 31 |
Rosedale,
Laurelton, Springfield |
Queens |
|
|
Committee Member |
1/21/2010 |
12/31/2013 |
District 12 |
Edenwald,
Co-Op City, Wakefield, |
Bronx |
|
|
Committee Member |
1/21/2010 |
12/31/2013 |
District 32 |
Ozone Park, Howard Beach,
|
Queens |
Jim Essey
President/CEO
e-mail: jessey@tempositions.com
site:www.tempositions.com
Tel:212 916-0859
Fax:212 867-1759
420 Lexington Avenue, 21st Floor
New York, NY 10170
April 30, 2009
In a recent meeting of the Metro Chapter Board of Directors, it was brought to our attention that a bill has recently passed the New York State Senate that could potentially affect the staffing industry. This bill, viewed by clicking here, is to be voted on by the State Assembly and signed into New York law. NYSA's proposed changes are underlined in this document. It is imperative that all staffing firms are aware of this bill.
The bill states that all employers must give each employee, in writing, a document that states what their rate of pay is and overtime wages are. The employee must sign in agreement that this is the correct offer for the position and the employer must keep this document on file. The purpose of this bill is to eliminate wage issues that have occurred with day labor workers. Unfortunately, there was no consideration given to how this bill would affect staffing companies. What will happen to the staffing industry, if this is passed, is crucial to how our companies are ran. Because we offer jobs in so many different ways - orally, on the day of, over the phone, etc. with different pay amounts for different jobs, this means that because of this new law - you as a staffing firm will have to provide and receive written acknowledgment from each temp you send on a new assignment - EACH AND EVERY TIME. The sheer amount of additional administrative work causes a huge problem for our industry, not to mention for our workers who will have to commute to our offices and sign paperwork before they can go on a job that they normally would have been able to go directly to from home. This will cause a decline in the services that the staffing industry is able to provide for clients, considering it will take much longer for workers to arrive on-site to begin the job.
It is imperative that we collectively work together to amend this bill so that we can continue to operate as usual. NYSA is working to give you several ways you can help.
1. Attend Lobby Day in Albany on May 4-5
This is an opportunity to meet with 10 State Senators and Assemblymen in one-on-one meetings to express our opinions and concerns on the impact this bill will have to our industry. Information about who we will be meeting with can be found by clicking here. The registration form to attend can be found by clicking here.
2. Send a letter to the New York legislators supporting our proposed changes to the bill.
3. Join NYSA and encourage other staffing firms to join, as well. We represent a unified voice for the staffing industry, so the more support we have, the stronger our voice will be. Sign up by clicking here.
October 8, 2008
Peter R. Crouse, Davidoff Malito and Hutcher LLP
No anti-temporary staffing legislation was considered this year which is the result of the work we have accomplished over the past five years in enhancing the industry's positions and profile here in Albany. The draconian "Walmart" bill never saw the light of day and no major move was made to enact the Temporary Workers Bill of Rights legislation. Also, efforts to modify the 7 week bill, were not successful.
Our efforts to forge a productive working relationship with the New York State AFL/CIO has been fruitful and was a major factor in our ability to see the 7 week enacted into law. That legislation takes effect January 1, 2009.
With New York State facing historic budget deficits in the 2009-10 fiscal year we are preparing for any Executive or Legislative effort which may negatively impact on the NYSA. Also, a potential change in Senate leadership from Republicans to Democrats is also in play.
We continue to encourage all members to interact with state legislators representing districts within which NYSA owners operate. It is important to continue to bold those relationships at home, which in turn assists us in our efforts here in Albany on statewide issues affecting the industry.
Finally, fund raising efforts have once again greatly assisted us in our efforts to show support of legislators who are favorable disposed toward our issues.
We look forward to representing NYSA during 2009 and plan for another productive lobby day to build upon the growing presence of the industry here in Albany.