Article contributed by Gregg Kligman, Meister Seelig & Fein LLP Hospitality Group
As restaurateurs settle into a new year, it might be tempting to skim past the details in pursuit of big-picture goals. But over time, small oversights can snowball into mountains of unnecessary liabilities.
At Meister Seelig & Fein (MSF) PLLC, we work regularly with restaurant and hospitality clients whose legal questions stem from common workplace issues. While nearly universal, these issues are crucial, and they’re deeply human concerns. Within the restaurant industry, we’ll start with one of the greatest pressure points: raising the minimum wage for restaurant workers and sharing pay rates transparently. With Governor Kathy Hochul’s proposed budget for 2024, the alarm bells need to go off in the restaurant community. Pay close attention in the coming weeks as to how her proposal will be received by New York State’s legislators.
The Fiscal Year 2024 Executive Budget reflects Governor Hochul’s goal to tie minimum wage into inflation in future years. In her January 10th State of the State address, she called for raising New York’s minimum wage, which is $15 in New York City, Long Island and Westchester, which has been rapidly falling in value as New York and the nation have faced the highest inflation in 40 years. Those inflation rates translate to the following expected minimum wage increases under Governor Hochul’s proposal: a 60 cent raise in 2024, and 35 or 40 cent raises each year for 2025 and 2026, which would leave the minimum wage at $16.40 downstate and $15.55 upstate by 2026.
Recognizing the existence of pay disparity, particularly for women and minorities who have faced a long history of unequal pay practices, pay transparency legislation went into effect in NYC and Westchester toward the end of last year and will go into effect for the rest of New York in September 2023. Wherever they’re located, New York restaurants should develop wage ranges for anticipated new hires and include those ranges in any advertisements or postings for jobs, promotions, and transfers in order to ensure compliance with these new requirements.
While pay is a longstanding concern, new issues are shaping legal conversations in the restaurant industry. At the federal level, we witnessed the Speak Out Act becoming law in December of 2022. The Speak Out Act prohibits the use of pre-dispute, non-disclosure, non-disparagement agreements for claims of sexual harassment and sexual assault. This legislation piggybacks on the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, a law that invalidates pre-dispute arbitration agreements, which would prevent individuals from bringing sexual assault and sexual harassment claims to court.
To effectuate these historic changes, how should restaurant employers revise their fine print? First, they need to review their new hire package and employment agreements to ensure that they comply with The Speak Out Act and the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act or 2021. Employers should also review their sexual harassment policy in anticipation of New York State finalizing updates to its Model Sexual Harassment Policy. The state recently issued proposed updates to the model policy which includes a provision on supervisor responsibilities, a new section on bystander intervention and addresses gender identity issues and remote work. Once the new model policy is finalized, employers must revise their employee handbooks to ensure compliance. Our MSF team can certainly help you with those updates.
We are also entering into a new era of COVID-19 protocols and policies. In November of 2022, NYC lifted its Private Employer Vaccine mandate, marking a new era of COVID-19 protocols and policies. However, restaurants in New York State must continue to comply with COVID leave laws, which remain in effect statewide, and New York’s paid family leave law, which now covers siblings. In all states, employers should keep a pulse on statewide and local changes and update their employee handbooks accordingly.
In addition to employee handbooks, I encourage restaurant owners to assess their workplace posters to ensure that the new “Know Your Rights” Workplace Discrimination is Illegal” poster issued by the Equal Employment Opportunity Commission (EEOC) is posted in the workplace, which updates the previous “EEO is the Law” poster. Additionally, as of December 2022, New York employers must provide employees with all workplace posters electronically in addition to placing them in a clear location in the restaurant.
Whether you’re revising a policy, onboarding a new employee, or delivering a to-go cocktail, the small moments matter. By attending to new laws as well as everyday transactions, restaurateurs can avoid the overwhelm of last-minute policy changes; not to mention, the legal woes that arise from forgotten details.
At MSF, we help our clients sift through the weeds and implement changes strategically throughout the year, to the benefit of both restaurateurs and employees. An informed, empowered, and respected staff is a restaurant’s most powerful asset, and will allow restaurateurs to sustain a healthy workplace for years to come.
Gregg Kligman is counsel at Meister, Seelig & Fein LLP. The New York City-based law firm deals in all aspects of business litigation. Mr. Kligman specializes in the management side of employment counselling and litigation. As many businesses look to rebound and rebuild from the COVID-19 pandemic, employer-employee relations, and the law that follows, remain as complicated as ever. In the glimmer of light at the end of the COVID-19 tunnel, Mr. Kligman provides the latest, need-to-know information for owners and operators in the restaurant and hospitality industry.
