These and other considerations are discussed in my article Avoiding Legal Pitfalls When Re-Opening Your Workplace: What Nonprofits and Businesses Need to Know.

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On October 25, 2016, in the Matter of Yoga Vida NYC,  a decision sure to have rippling effects through many industries, the New York State Court of Appeals–the highest court in New York State — ruled sensibly and logically, that certain yoga instructors were independent contractors, not employees. Specifically, the Court found that substantial evidence supported a finding that non-staff yoga instructors were independent contractors where the non-staff instructors:

1) set their own schedules; 2) chose how they were paid (hourly or on a percentage basis); 3) were paid only if a certain number of students attended their classes; 4) were not restricted as to where they could teach (whereas staff instructors who were employees could not work for competitors within certain geographical areas); 5) could inform students of classes they taught at other locations; and 6) were not required to attend meetings or receive training.

The Court further opined that evidence of incidental control by the yoga studio, including an inquiry by the studio as to whether the instructors held proper licenses to teach yoga; the fact that the yoga studio published a master schedule on its website; and the fact that the studio provided space for the classes, did not support the conclusion that the instructors were employees.

Employers should understand that, depending on the facts, some yoga instructors or other kinds of instructors may be deemed to be employees while others will be deemed independent contractors.

NYC Now Protects Freelancers/Independent Contractors

On November 16, Mayor de Blasio signed into law a bill that protects New York City freelancers/independent contractors by requiring that whomever hires a freelancer provide a written contract for the freelancer’s work, pay him/her in full and on time, and that the hiring party does not retaliate against the freelancer for exercising his/her rights.

More specifically, the law requires any person or entity who engages a freelancer to have a written contract with that freelancer for any work over $800.  The contract must itemize all services to be provided, the value of those services, the rate, the method of payment, and the payment due date or the mechanism by which such date will be determined.

The client must pay the freelancer on a timely basis and may not require the freelancer to accept less than the full amount of the contract in exchange for timely payment. If the contract does not provide the payment date or the mechanism by which such date will be determined, payment must be made no later than 30 days after the completion of the freelance worker’s services under the contract.

The party engaging the freelancer/independent contractor bears the burden of showing there is a written contract if any dispute arises regarding the terms of engagement.

The freelancer may bring a complaint with the Director of New York City’s Office of Labor Standards or bring an individual cause of action in state court. Violation of this law may result in damages equal to the value of the services, double damages, statutory damages, injunctive relief and attorney’s fees and costs. Where there is evidence of a pattern or practice of violations, the Corporation Counsel may bring a civil action in court on behalf of the City, and a civil penalty up to $25,000 may be imposed.  The law takes effect in 180 days from its signing, or on May 15, 2017.

Any nonprofits that are planning to engage freelancers should be mindful of this new law and ensure their independent contractor engagements are in writing and compliant with the new law.

In light of the above developments, it would be wise for New York employers to confer with their employment counsel to ensure their workers are properly classified and that their independent contractor agreements are properly drafted.

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In a March 3, 2015 Dilbert comic strip, the boss tells his subordinates that because of a study showing that tall people earn more than shorter people, the company will not be doing performance reviews but will instead simply measure the height of each employee and then pay them accordingly. The boss then adds: “Alice will earn 10% less than the men. I think that’s the law.”

Well, jokes like those about women earning less than their male counterparts for doing the same job–as a matter of fact, if not a matter of law– may soon be “history” or “herstory” if laws like the one recently passed in Massachusetts and the one proposed this week in New York City take hold. On August 1, 2016, Massachusetts became the first State in the nation to prohibit employers from asking about a job applicant’s salary history or past benefits before extending an offer of employment with compensation, in a new pay equity law. Although Massachusetts had already passed a pay equity law requiring equal pay for comparable work back in 1945, this new law goes further.

The Massachusetts pay equity law also prohibits employers from requiring employees not to talk about wages, benefits or other compensation, or not to inquire, discuss or share information about any other employee’s wages, benefits or other compensation. An employee who prevails in a lawsuit under this new pay equity law may also recover his/her reasonable attorneys’ fees and costs.

The law does, however, allow an employer who is sued for alleged violation of the law to raise an affirmative defense to liability by showing that, within 3 years and before the commencement of the action, it had conducted a self-evaluation of its pay practices in good faith and can demonstrate that reasonable progress has been made towards eliminating compensation differentials based on gender for comparable work in accordance with that evaluation. A copy of the Massachusetts bill can be found here: https://malegislature.gov/Bills/189/Senate/S2119.

This provision of Massachusetts’ pay equity law is truly groundbreaking in the United States, and may be one of the first real impactful acts to alter the pay disparity at the outset of employment between men and women performing comparable work.

Why this law when federal and State equal pay laws have been “on the books” for decades? As the Dilbert comic strip makes plain, those laws have largely failed to accomplish their intended purposes. Paying new hires based on salary history rather than market-competitive rates has historically disadvantaged women who may have been victims of wage discrimination at a prior job, taken a break from the workforce to bear children or made other economic sacrifices that later disadvantaged them when they sought new employment despite their performing work comparable to that of their male counterparts.

Massachusetts is now attempting to level the playing field for women by requiring employers to essentially pay women based on their worth to the employer or in the marketplace.

New York City may be next on the gender pay equity path. On the “high heels” of Massachusetts’s law, on August 10, 2016, New York City’s Public Advocate Letitia James announced a proposed bill that also would prohibit New York City employers and employment agencies from asking job applicants about salary history, including benefits. See http://pubadvocate.nyc.gov/news/articles/pa-james-announces-legislation-close-gender-wage-gap.

New York employers may recall that, effective January 19, 2016, New York State amended New York’s Labor Law Section 194, by enacting a gender pay equity law. That law requires that any differential in rate of pay between a man and woman performing the same job be based on a bona fide factor other than sex such as education, training or experience. Such a factor may not be based on a sex-based differential, and must be “job-related and consistent with business necessity.” But the New York State law does not go as far as the one in Massachusetts to prohibit inquiries about salary history.

Like the Massachusetts law, New York State’s gender pay equity law prohibits employers from paying women less than their male counterparts for performing comparable work. Failure to comply with the New York State law may result in liquidated damages of up to 300% of the amount of unpaid wages (you read it right).

As the New York State legislature explained in passing the gender pay equity law last year, “[d]espite existing protections under the law, women in New York earn 84 percent of what men earn and jobs traditionally held by women pay significantly less than jobs predominately employing men. In New York, on average, a woman working full time is paid $42,113 per year, while a man working full time is paid $50,388 per year. This creates a wage gap of $8,275 between full-time working men and women in the state.”

And as noted elsewhere by the New York State legislature, “[d]espite the enactment of the federal Equal Pay Act and the state Equal Pay Law in 1963 and 1966 respectively, there are still incidences of discrimination in pay based on sex.” New York’s gender pay equity law–like Massachusetts’ new law– also prohibits employers from “forbidding employees from sharing wage information that would otherwise deny women workers the ability to discover whether their wages are unequal to their male counterparts” (despite the fact that the National Labor Relations Board had already made it unlawful for many years for covered U.S. employers to prohibit employees from discussing their compensation in the workplace).

Some other States like California have their own equal pay laws as well. California has also introduced legislation that would bar inquiries into a job applicant’s salary history.

In view of the above legal developments and more expected to come throughout the U.S., employers would be well advised to consider reviewing their pay practices and adjusting as needed to ensure that employees performing the same jobs are paid comparably to their counterparts of a different gender and are paid based on their worth to the employer and market-rate, regardless of gender.

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