By Katherine Brustowicz, David Gabor, Virginia Peabody
I. Maine – Mandatory Vacation Payout Upon Separation from Employment
Maine will follow Massachusetts’ lead in implementing mandatory vacation payout upon employment separation. An amendment to the State of Maine’s final wage statute will require all private employers with 11 or more employees to pay out any accrued but unused vacation time no later than the payday following termination of employment. The change will apply to vacation accrued on or after January 1, 2023.
Covered Employers: The amendment will apply to all private Maine employers with 11 or more employees but does not apply to public sector employers. If a collective bargaining agreement (“CBA”) governs the employees’ employment and includes provisions addressing the payout of vacation time upon employment separation, the CBA supersedes the amended Act.
In the event that an employer sells a business, employees must be paid their accrued vacation within two weeks after the sale date. However, the buyer may, in a written agreement with the seller, agree to be responsible for the accrued but unpaid vacation.
Penalties: Employer noncompliance may result in damages in the amount of the accrued vacation time plus interest and liquidated damages equal to two times the amount owed.
Uncertainties: The short amendment brings with it a splash of ambiguity. The amended Act is silent as to whether the 11-employee threshold includes employees who work in other states. In the absence of any guidance, employers should consider complying with the amendment if they have 11 or more employees and only one works in Maine. For companies that allow employees to work remotely, a review should be performed to determine how many of their remote employees work from Maine.
It is also in conflict with the relatively new Maine Earned Paid Leave Law which, since its enactment in
2021, indicates that if an employer has a vacation policy that clearly specifies unused vacation time will not be paid at the time of separation, then the Earned Paid Leave balance need not be paid.
The amendment does not address the impact on paid time off programs that employers maintain instead of vacation and sick leave programs.
Takeaways: Affected employers should review and update their payroll practices to comply with the amendment, ensure that their payroll provider tracks leave properly for employees in Maine, and send notices about the change to employees before January 1, 2023. HR handbooks, policies, and procedures should also be updated as needed.
II. New York & New York City – Pay Transparency Laws
New York State Law: Senate Bill 9427, a pay transparency law that is currently awaiting Governor Kathy Hochul’s signature, will go into effect 270 days after it has been signed. If enacted, the law would require New York employers with four or more employees to include a salary range and job description (if any) in each job advertisement, promotion, or transfer opportunity. Employers must maintain records of the history of compensation ranges and job descriptions (if any) for each position.
The bill also includes an anti-retaliation provision. As a result, employers may not refuse to interview, hire, promote, or employ an applicant or current employee for exercising any of the rights as provided by the law.
The state commissioner of labor will investigate and prosecute any violations of the law. Civil penalties may be imposed up to $1,000 for the first violation, $2,000 for the second violation, and $3,000 for the third and subsequent violations. There is no private right of action.
New York City: New York City enacted a pay transparency law that will take effect on November 1, 2022. The law requires employers to provide a salary range or hourly range, in good faith, for all advertised job openings, promotions, or transfer opportunities. The pay transparency requirements must be met for positions that can or will be performed, in whole or in part, in New York City. This includes work performed in an office, in the field, or remotely from the employee’s home.
This is similar to the pay transparency law that will take in place in Albany, Westchester, and Ithaca counties later in 2022.
Modifications: Modifications have been made to the law, which had previously been scheduled to take effect in May. The modifications clarify that this pay transparency law applies to both in-person and remote workers. There is a 30-day grace period for employers who have, for the first time, neglected to include a salary range.
Penalties: If the violating employer fails to add a salary range to the posting within the 30-day grace period, that employer will incur a fine. A private right of action exists for current employees, but not for job applicants.
Takeaways: It should be noted that employers will need to comply with not only state law, but also county law to the extent applicable. What should New York employers do now? Prepare for the likely enactment of the state pay transparency law by crafting job descriptions and preparing good-faith annual salary and hourly rate ranges for job postings. Employers should consider conducting an equal pay audit to determine if there are any pay inequities. It is important to note that pay transparency gives employees a better sense of one another’s salaries. If an employee discovers that a similarly situated co-worker is paid significantly more, morale issues can arise impacting productivity. This can also lead to increased turnover and discrimination or equal pay claims
The Wagner Law Group’s HR and Employment Law team is here to assist you. We keep up to date on changes to state-specific wage and hour matters and can effectively counsel employers on compliance. We also help to create practical policies and advise on all matters relating to the employer-employee relationship. Please do not hesitate to reach out to Katherine Brustowicz, David Gabor, or Ginny Peabody