In the June 15, 2017, edition of the Insights and Solutions newsletter, we told you about a sweeping series of laws passed by the New York City Counsel. Collectively called the “Fair Workweek Law,” the legislation was intended to provide certain workers in the retail and fast food sectors with new workplace rights and protections. One piece of the law, titled Pay Deductions for Contributions to Not-for-Profit Organizations, permitted employees of fast food establishments to authorize the payment of a portion of their wages to registered and approved non-profit organizations. It also required affected employers to deduct, collect and remit the portion of employees’ wages directly to the designated organizations.
Days before the Fair Workweek Law was set to take effect on November 26, 2017, two industry groups, the National Restaurant Association and the Restaurant Law Center, filed a lawsuit against New York City, arguing that the deduction portion of the Fair Workweek Law amounted to a violation of the First Amendment Rights of employers, by forcing employers to take action that could be perceived as associating with and funding organizations that they do not support. They also argued that the deduction portion of the law was preempted by the National Labor Relations Act because, among other things, it purports to afford New York City the authority to determine what is and is not a “labor organization.”
In light of the ongoing legal challenge, New York City has agreed to a temporary stay of enforcement of the deduction portion of the Fair Workweek Law. Pursuant to an agreement between the plaintiffs and the City and agreed upon by the Court, enforcement of the deductions portion of the law is stayed until the sooner of a court ruling on this issue, or March 30, 2018. The matter will continue to be argued in the Court. ADP is monitoring the situation for future developments.
Coverage: The Fair Workweek legislative package covers any New York City employer who operates a “fast food establishment” that is part of a chain that has 30 or more establishments nationally. It also covers any “retail business” that has 20 or more employees engaged primarily in the sale of consumer goods at one or more stores within the city.
Effective: The portion of the law that requires the deduction, collection, and remittance of employee contributions to authorized not-for-profit organizations has been stayed until the sooner of a court ruling or March 30, 2018.
Action Required: No action is required at this time. ADP is monitoring the situation for future developments. In the interim, please contact your HR Business Partner if you have any questions.