Article by Carolyn D. Richmond
There is no reason to believe that the workplace assault against restaurants and other hospitality establishments will slow down in 2020. With a record-setting number of changes to New York State (“NYS”) employment laws in 2019, government officials and the plaintiffs’ bar feel emboldened, and, therefore, in 2020, we anticipate a significant uptick in workplace regulations.
Below is a brief summary of the top three issues for 2020 New York hospitality to which employers should pay careful attention.
1. The #MeToo Movement.
2019 saw significant changes in NYS concerning anti-discrimination laws. Protected categories such as transgender status were expanded, statutes of limitations extended, and legal burdens to establish claims, weakened. Because of these changes, we anticipate that anti-discrimination lawsuits and governmental agency charges will increase precipitously.
What’s an employer to do?
- Review its Employment Practices Liability Insurance (“EPLI”) coverage. Understand any policy exclusions (such as wage and hour claims); ask about the deductible and policy limits; and, insure that you understand who gets to select counsel—you or the insurer.
- Train, train, and train. Find an anti-harassment and discrimination training program that works best for your business. A one-size-fits-all approach to training never works. Train managers and non-exempt employees separately. Consider the value of one-on-one e-training for non-exempt employees to cut down potential cross-talk about claims that one employee may have. Ensure training is provided to employees in all necessary languages. Consider refresher courses throughout the year and sessions that drill down on more specific topics that may be more pressing in your workplace.
- Remember, all the training in the world does not work if corporate culture does not change from the top down. Buy-in from owners and top management is mandatory. Ensure that everyone attends training – including owners and top management – and do not make exceptions when it comes to policy enforcement simply because the violator of the policy is a high-performer or high-level employee.
- Make sure that harassment and discrimination complaints are handled promptly and appropriately. Not every business can afford to have a human resources (“HR”) professional, no less a team. However, every business must have the appropriate professional handle complaints of discrimination and harassment; failing to do so can be fatal to the business. Consider putting in place a reporting “hotline” that can be handled by a team from outside of your business. Line up appropriate outside counsel or HR professionals who can properly and promptly investigate claims when they are raised. Make sure that whoever handles the complaint and investigates the allegations has the respect of your workplace, especially ownership and management. Finally, handle the results appropriately—not every complaint means someone has to be fired, but it does mean that you have to apply policies and mete out discipline consistently.
2. Labor Costs
An increasing refrain from New York employers is that labor costs have spiraled out of control and have simply made it cost-prohibitive to operate. The minimum wage in New York City is now $15.00 an hour, and the rest of the State is quickly catching up. In
addition, labor costs have risen because of the cost of recruiting in such a tight labor market (not to mention price of housing in the New York City area). Moreover, predictive scheduling laws, paid sick/safe time laws, and other government mandates have increased the cost of labor for most operators.
Recent changes to the minimum salary level for exempt employees has also resulted in increased overtime. The minimum weekly statutory level for a salaried, exempt employee has gone up exponentially in the past year: $1,125 per week in New York City; $975 per week in Westchester and Long Island; and, $885 per week for the rest of the State. We have also seen increased scrutiny of exempt status across the food service industry—in particular, sous chefs and line managers who are often treated as exempt. Remember, it is not the salary alone that determines whether an employee is entitled to overtime—the job duties and function play an equally important role. Back pay claims in NYS have a 6-year statute of limitations resulting in significant financial risk if an employer misclassifies an employee as exempt from overtime.
What’s an employer to do?
- Understand the specific wage and hour and employment laws that affect your jurisdictions—burdens change dramatically between New York City and its suburban counties alone.
- Evaluate software that is available to aid in predictive scheduling, leave time, overtime, and related functions.
- Train. Train. Train. If your business is subject to predictive scheduling laws, it can be a nightmare to understand and implement properly. Training all managers, operations team members, and HR is imperative.
- Conduct a labor audit to insure that your business is using labor efficiently across all shifts. Ascertain whether outsourcing certain job categories (e.g. porters or pastry) can save costs without affecting customer service or quality control. Annually review exempt status by comparing job descriptions to actual work performed. Work with outside counsel on planning and implementing appropriate labor audits.
3. Americans with Disabilities Act (“ADA”)
There is likely not a business in New York that has escaped some kind of ADA lawsuit. Title III of the ADA covers private employers with respect to public accommodations. The nation’s courts have been bombarded with an ever-increasing number of ADA suits. The suits generally concern three distinct areas: traditional brick and mortar access issues (e.g. entrance ramps, signage, and seating); the applicability of the ADA to internet sites; and, most recently, whether gift cards need to be in braille. Unless the laws are overhauled by federal, state and local legislatures, which is unlikely in the near term, these nuisance suits will not abate.
What’s an employer to do?
- Make sure that any vendor or professional retained for development and construction, and website design/maintenance has an understanding of the ADA. Make sure all vendor agreements cover legal compliance obligations and liability.
- Engage an appropriate ADA consultant and review any necessary brick and mortar changes that can be remedied prior to a suit. The same process can be conducted with respect to internet sites.
- While having braille gift cards available would certainly limit liability, it is likely not required or an easy (i.e. cost-efficient) solution. We anticipate that 2020 will bring a number of court decisions about this very issue. Review with counsel what alternatives there may be for sight-impaired guests —they do exist.
- Train managers and front of house employees on the law and policies surrounding accommodating guests with disabilities. There has been a noticeable rise in claims over the past several years concerning service animals and access to restaurants, hotels, and other food service venues. This becomes as much a PR issue as a legal one—understand how to navigate this issue.
Carolyn D. Richmond is a partner in the New York office of Fox Rothschild LLP and Chair of the firm’s Hospitality Practice Group. She advises restaurants, hotels, caterers and other food service providers on a wide range of employment, civil rights and labor issues. Carolyn writes and speaks frequently on hospitality industry and employment-related topics and serves in numerous leadership positions, including Labor Counsel to the New York City Hospitality Alliance and is an appointed member of the Cornell University Council.
