EMPLOYMENT FOR NONPROFIT ORGANIZATIONS

1. EMPLOYMENT FOR NONPROFIT ORGANIZATIONS September 2019

2. Presenters Garrett Kennedy Of Counsel, DLA Piper, New York garrett.kennedy@dlapiper.com (212) 335-4708 Janeen Hall Associate, DLA Piper, New York janeen.hall@dlapiper.com (212) 335-4666

3. Topics • Worker Classifications • Hiring • Wage and Hour Laws • Handbooks and Policies • Discrimination and Sexual Harassment • Discipline and Termination • Dos and Don’ts

4. Worker Classifications

5. Categories of Workers • Employees • Independent contractors • Volunteers • Interns • Trainees

6. Who is an employee? • Workers who are: • Subject to significant oversight from the employer • Paid wages and organization-sponsored benefits • Required to perform whatever tasks the organization requires in the manner the organization requires • Provided with a W-2, and the organization pays the full amount of their income taxes and a portion of their Medicare and social security taxes • Economically dependent on the employer • Protected by applicable federal, state and local employment laws

7. Independent Contractors • Workers who contracts with individuals or entities to provide services in exchange for compensation. • Often owns outside businesses and provides services according to their own terms • Services not integral to the organization’s business • Charges fees for service, and typically invoices for same • Engaged for a specific project or term, to perform an identified service or task • Retains control over the method and manner of work • Retains economic independence, makes own investment in his business, and has control over how much, or little the contractor can earn • Receives a 1099: is responsible for paying their own income, social security and Medicare taxes • Is not entitled to organization-sponsored benefits • No single applicable test

9. Volunteers • Under the Fair Labor Standards Act (FLSA): • Individuals who donate their services (usually part-time) • For public service, religious or humanitarian objectives • Without contemplation of pay • Without displacing employees or performing work that is otherwise performed by employees • Under the New York Labor Law (NYLL): • “A person who works for a nonprofit-making institution under no contract of hire, express or implied, and with no promise of compensation, other than reimbursement for expenses as part of the conditions of work.” • Under the Federal Volunteer Protection Act (VPA): • Statute limiting or precluding tort liability for volunteers • An individual performing services for a nonprofit organization who does not receive: • Compensation (other than reasonable reimbursement or allowance for expenses actually incurred) • Any other thing of value in lieu of compensation in excess of $500 per year

10. Volunteers COMPENSATION • Threshold inquiry – whether the volunteer expected compensation! • BUT volunteers may be paid a small stipend under certain circumstances, such as reimbursement for reasonable expenses (e.g., required uniforms, meals, supplies, transportation) • Dangers of compensating volunteers: • Minimum wage violations • Health insurance benefits triggered • Pension/retirement benefits triggered

11. Volunteer Don’ts • May not volunteer in commercial activities run by a nonprofit (e.g., a gift shop) • May not replace paid staff to do the work of paid staff • Do anything but tasks traditionally reserved for volunteers • Employers may not require volunteers to work certain hours • Employees may not volunteer to provide the same type of services to their nonprofit employer that they are employed to provide • Nonprofits cannot request or direct an employee to perform volunteer work during the employee’s normal working hours, even if the volunteer work is not the same or similar to that person’s regular job duties

12. Interns

13. Trainees • Under the FLSA: • Generally individuals participating in pre-employment training for a particular skill or job • Frequently unpaid, but the FLSA has no specific exemption for trainees • A trainee’s willingness to work without pay is not relevant to whether they must be paid under the FLSA • Test is generally the same federal DOL analysis • Under the NYLL: • Organization must be operated exclusively for charitable, educational or religious purposes • Training must involve formal instruction and on-the-job training • Trainee must have limited responsibility, and be under supervision or guidance that is: • Sufficiently direct and specialized • An appropriate ratio of trainers to trainees • 2-10 weeks

14. Penalties for Misclassification • May include: • Back pay • Value of benefits not provided • Liquidated damages • Penalties for not providing NYS Wage Theft statements or accurate paystubs • Interest • Risk of DOL Audit, including penalties and potential recovery of unpaid unemployment insurance and other taxes • Attorneys’ fees and costs

15. Hiring

16. At-Will Employment • Definition: An employment relationship can be terminated for any reason or no reason at the will of either party, so long as the reason is not otherwise prohibited by law or agreement. • Default rule in the workplace! • Under New York law: • Employees can’t be terminated if there is an express agreement limiting the employer’s right to terminate an at-will employee • At-will employees are protected from retaliatory action for disclosing or threatening to disclose explicitly illegal activities of employers that present dangers to public health or safety (or refusing to participate in such activities) • Employers and employees have no obligation to act fairly and in good faith toward each other

17. Offer Letters • Generally should contain basic terms and conditions of employment: • Compensation (salary vs hourly; overtime eligibility) • Job Duties • Hours • Benefits • At-Will vs. Fixed-Term Employment • Be careful not to undermine the at-will employment relationship by offering employment of a given length if not intended! • Avoid language that could be construed to promise permanent employment (e.g., “for cause” termination) • Conditions to hire (e.g., immigration compliance) • Employee’s agreement to abide by all company policies

18. Employment Agreements • Usually reserved for upper management. • Should address: • Term of employment • Title and duties • Pay and benefits • Bonus eligibility (if any) • Termination • Choice of law • May address: • Severance eligibility • Restrictive Covenants • Arbitration

19. Restrictive Covenants Stay up to date: Legislation is being considered in NYS that could severely limit use of non-competes for certain workers, and has been passed in certain other jurisdictions.

20. New Hire Checklist • In addition to offer letters/employment agreements, should provide at the time of hire: • New York Wage Theft Prevention Act Forms • Sexual Harassment Policy with Acknowledgment Form, Sexual Harassment Factsheet, and any related training materials • Form I-9, Immigration Reform and Control Act • Federal and state tax withholding forms • Employee Handbook with Acknowledgment Form • FMLA notice (if more than 50 employees) • May include arbitration agreements (with class action waivers) and/or jury trial waivers

21. Background Information • Stop Credit Discrimination in Employment Act • Most NYC employers are prohibited from requesting or using the consumer credit history of an employee or job applicant when making employment decisions (limited exceptions) • Fair Chance Act/Ban the Box (NYS, 10 or more employees) • Restricts an employer from making hiring or employment decisions based on an individual’s past conviction • Employers may make employment decision only if the prior conviction, inter alia, (i) has a direct relationship to the job; and (ii) involves an unreasonable healthy or safety risk • If relied on, must explain this using NYCCHR Fair Chance Act Notice; and give applicant a copy of the criminal record information; and give 3 days to respond, while holding job open

22. Background Information • NYC Salary History Ban • Prohibits employers from asking about, relying on, or verifying a job applicant’s salary history at any stage of the hiring process • Can ask what salary expectations are • Fair Credit Reporting Act • Requires notice and authorization of background check, and certain notice if intend to use same in employment action. • Pre-Employment Marijuana Testing Ban (May 1, 2020) • Will prohibit NYC employers from requiring testing for marijuana or THC as a condition of employment • Numerous exceptions (e.g., police officers; supervision or care of children or vulnerable individuals)

23. Wage and Hour

24. Pay Categories • Overtime: all time worked over 40 hours in a single workweek must be compensated at a rate not less than one and one-half times the employee’s regular rate of pay. • Nonexempt employees – entitled to overtime. Often paid on a hourly basis, but may be salaried. • Exempt employees – not entitled to overtime. Paid on a salaried basis. • Minimum wage (some exceptions apply):

25. Exemption Requirements • To qualify for certain exceptions from overtime laws, an employee generally must satisfy the: • Duties test • Salary basis test, and • Meet certain specified salary thresholds • Federal exemptions: • Administrative, executive and professional (“white collar”) • Highly compensated employee: primary duty is office or non-manual work and customarily and regularly performs one duty of an administrative, executive or professional employee. • The FLSA includes other, less common exemptions • New York follows the same exemptions and adds exemptions: • Nonprofits that have elected to be exempt • Farm laborers, outside salespersons, volunteers, learners, apprentices, members of a religious order, students in or for a nonprofitmaking institution, staff counselors in a children’s camp

26. Changes to the Salary Threshold Requirement • FLSA: • Minimum salary threshold to qualify for the white collar exemption (executive, administrative or professional) currently is $455/week, but expected to increase in 2020 to approximately $679/week. • New York: • Note: New York does not have a minimum salary threshold for the professional exemption (but must still comply with FLSA).

27. Handbooks and Policies

28. Why Have an Employee Handbook? • Provides employees with guidance and explanation of how the employer operates • Helps to make sure policies and procedures are uniformly applied • Policies will vary depending on the employer • Some policies are required as a matter of law • Beware: certain handbook provisions may be found to create an implied contract • Routinely issued handbooks are not easily converted into binding agreements in New York • BUT a handbook can end up an exhibit in a litigation!

29. Common Handbook Policies • Timekeeping • Hours and Overtime • Meal and Rest Breaks • Lactation Breaks • Paid Time Off • Job-Protected Leave • Technology • Computers/email/ internet • Social media • Standards of Conduct • Personnel Records • Violence in the Workplace • Safety • Visitors • Whistleblower • Conflicts of Interest • Solicitation and Distribution • Termination • Equal Opportunity Employer • Reasonable Accommodations • Religious • Disability under the ADEA, state and local law • Sexual Harassment • Anti-Discrimination • Complaint Procedure

30. Meal, Rest and Lactation Breaks • Meal Breaks • FLSA – bona fide meal periods (lasting appx. 30+ minutes) are generally not considered time for which employees must be compensated. • New York – Employer must provide employees who work more than 6 hours with at least 30 minutes between 11 a.m. and 2 p.m. • 6 or more hours between 1 p.m. and 6 p.m. = at least 45 minutes, mid-shift • Before 11 a.m. – 7:01 p.m. = an additional meal period of at least 20 minutes, between 5 p.m. and 7 p.m. • Rest Breaks • FLSA – Short breaks (appx. 5 to 20 minutes) is time for which employees must be compensated • New York – Employer must provide employees with at least 24 consecutive hours of rest per calendar week. • Lactation Breaks • Employers are required to provide a reasonable break time for an employee to express breast milk for her nursing child. • New York – Reasonable unpaid break time, or permit an employee to use paid break time

31. New York City Earned Safe and Sick Time • Employers with 5 or more employees must provide up to 40 hours of paid sick/safe leave per year. • Employers with less than 5 employees may provide unpaid sick/safe leave • Employees accrue one hour of paid safe/sick time for every 30 hours of work • Applies to all employees who work more than 80 hours in a calendar year • Leave can be used for: • An employee’s or family member’s mental or physical illnesses or to seek medical diagnosis or treatment • Care of a child whose school or childcare provider is closed due to public health emergency; • Closure of employee’s place of business due to a public emergency; • Obtaining services from a domestic violence shelter, rape crisis center or similar service; • Safety planning, relocating, or taking actions to increase the safety of the employee or family members; • Filing a complaint and/or Meeting with an attorney or social service provider regarding related criminal or civil proceedings; and • Certain other related actions. • Family members include: • Spouse or domestic partner; parents and that of spouse/partner; child, including that of spouse/partner; siblings; grandparents; grandchildren; any person related by blood; or any close association equivalent to a family relationship.

32. New York Paid Family Leave • Job-protected, paid time off that allows an employee to: • Care for a family member with a serious health condition • Bond with an employee’s newborn or newly placed adoptive or foster child during the first 12 months following birth or placement • Address any qualifying exigency related to a spouse, domestic partner, child or parent who is serving on active military duty • Employers must: • Restore employees to the same or a comparable position upon return • Maintain existing health benefits for employees on leave

33. A Quick Word about FMLA • Unlike NYPFL, federal Family and Medical Leave can be used for an employee’s own serious medical condition • FMLA leave runs concurrently with NYPFL, unless otherwise expressly permitted by the employer • Applies to: • Private employers with 50+ employees on the payroll for 20+ calendar workweeks (don’t need to be consecutive) within a 75 mile radius • Employees who have worked at least 12 months (not consecutively) and 1,250 hours during the 12 months immediately before the first day of the requested leave • In addition to bonding leave, the FMLA provides leave to eligible mothers for incapacity due to pregnancy, prenatal care and her own serious health condition following the birth of the child

34. Other Types of Leave • Jury duty • Military • Military Spouse Leave • Vacation • Personal • Holiday • Voting • Disability • Pregnancy • NYC Pregnancy Workers Fairness Act

35. Discrimination

36. EEO Laws and Protected Characteristics * Federal anti-discrimination laws include: Title VII; the Americans with Disabilities Act (ADA); the Age Discrimination in Employment Act (ADEA); the Genetic Information Nondiscrimination Act (GINA); the Uniformed Services Employment and Reemployment Act (USERRA); the Equal Pay Act; and the Immigration Reform and Control Act (IRCA)

37. What Conduct is Discriminatory Harassment? • Verbal – derogatory statements, slurs, derogatory comments or jokes • Physical – assault or inappropriate physical conduct • Visual – displaying derogatory posters, cartoons, drawings or making derogatory gestures • Online – derogatory statements or sexually suggestive postings on social media platforms • Any other conduct that could be discriminatory or harassing

38. Reasonable Accommodation • Federal law: Employers must reasonably accommodate qualified individuals with disabilities so as to permit them to perform essential functions of their jobs if employers can do so without undue hardship. • Must also reasonably accommodate religious beliefs/practices • Examples: • Making facilities more accessible • Restructuring workspaces • Allowing changes in work schedule • Interactive Process: To determine if a reasonable accommodation is required, must engage in an informal process of working with employee to determine if an accommodation exists. • Typically employee-initiated • Must confer with employee in the process, and encourage this process to be documented • Not obligated to provide the specific accommodation requested • NYC: Must provide reasonable accommodations as above, as well as for victims of domestic violence • Cooperative Dialogue: Employer or employee must initiate; also requires an interactive process • Concludes upon a determination that the employer can, or cannot accommodate • At conclusion, employer must provide a written determination to the employee • Must continue the cooperative dialogue process if the employee’s circumstances change

39. Sexual Harassment &Discrimination

41. New York State and City Obligations • Training (by October 9, 2019, annually thereafter, and within 30 days of hiring): • An interactive component • An explanation and examples of prohibited sexual harassment • Information on federal, state and local law prohibiting sexual harassment • Remedies and rights of redress • Internal complaint process • Complaint process available through federal, state and local agencies • Prohibition of retaliation • Bystander intervention • An explanation of added responsibilities for supervisors and managers • Anti-Harassment Policies: • All NYS employers must provide anti-harassment policies to their employees • This must include certain required information, including a complaint form; see Appendix B for reference • All NYC employers must: • Conspicuously display anti-sexual harassment rights and responsibilities notices in both English and Spanish • Distribute a Stop Sexual Harassment factsheet (English and Spanish) to individuals at the time of hire

42. New York State Anti-Discrimination Laws • Expands coverage to all New York State employers • Expands sexual harassment protections and prohibitions to non-employees, i.e., contractors and subcontractors, venders, consultants, interns and volunteers • Prohibits mandatory arbitration clauses and non-disclosure agreements (NDAs) that cover sexual harassment claims • Note: NDAs are enforceable if the complainant consents to such an agreement after being given 21 days to consider it and 7 days to revoke consent and the agreement terms are provided to all relevant parties. • Eliminates Fargher-Ellerth defense, i.e., an employee’s failure to take advantage of an employer’s complaint procedures is not “determinative” as to liability • Provides for uncapped punitive damages in event of finding against employer

43. Examples of Sexual Harassment • Unwelcome or inappropriate touching of employees or customers • Making lewd or sexual comments about an individual’s body or style of dress • Sharing sexually inappropriate images or videos • Asking for favors of a sexual nature in exchange for a favorable employment decision or as a requirement to keep your job • Gazing at an employee in a sexually suggestive or distasteful manner • Sending suggestive letters, notes or emails • Making insulting comments about someone’s gender identity or sexual orientation • Asking about someone’s sexual orientation • Jokes • Innuendo • Pressure for dates • Sexual Gestures

44. Discrimination and Harassment Complaints SEE SOMETHING SAY SOMETHING • Bystander Intervention is welcomed (and required) under the new local law. • Whether or not you believe certain conduct constitutes “harassment,” if you are uncomfortable with someone’s behavior and its effect on you, be proactive! • Tell the person (if you’re comfortable) • Report the conduct • Everyone is required to report incidents of actual or perceived harassment and discrimination to the designated company department or representative. • Following receipt of a report, the Company must take appropriate action based on the circumstances, and conduct a prompt and through investigation.

45. Discrimination and Harassment Complaints • Confidentiality should be maintained to the greatest extent practicable. • Appropriate remedial and/or disciplinary action must be taken, as determined by the company • No retaliation! • Strictly prohibited • Both the alleged retaliator and the company can face legal liability • Protected Activity: • Making a good faith complaint of discrimination or harassment, or participating in an investigation

46. Importance of Performance Documentation • If done correctly, performance management documents can be used to establish an employer’s legitimate, non-discriminatory reason for an adverse employment action • If done incorrectly, these documents can be used to establish a plaintiff’s claims, or undermine the employer’s purported legitimate, non-discriminatory reason for discipline or termination • DOCUMENT, DOCUMENT, DOCUMENT! • Good Performance Reviews: • Detailed facts, with specific examples • Accurate • Acknowledge good and bad performance • No sugarcoating • Fair and easy to understand

47. Discipline  Termination

48. Employer Dos and Don’ts

49. Scenario A woman comes to the office to interview. She appears to be very young in appearance. You look at her resume to see if she stated when she graduated college. No date is there, but she did graduate. You have doubts as to whether she is legally able to work. You ask her how old she is. She responds, “42.” Following the interview, you decide she is not qualified for the job and pass over her application. Was it incorrect to ask her age? Why or why not?

50. Scenario Your office is in need of a proficient Spanish speaker for translation. Joe applies for the position and comes to the office for an interview. He appears Latino but Spanish is not listed on his resume. German and French are listed. What questions should you ask to determine whether he is qualified for the position?