Quick Hits: Playboy Whistleblower, Paid Sick Leave, Expanding Overtime, Battling Misclassification

Employment law is a busy and exciting field. There are new developments every day as laws are enacted, cases are decided and policy is debated. Here are some recent stories that we’ve found especially notable

Largest SOX Whistleblower Jury Award: On March 5, 2014, a jury awarded $6 million to Catherine Zulfer, a longtime executive at Playboy Enterprises, for retaliation that she suffered after engaging in whistleblower activity protected by the Sarbanes-Oaxley Act. Ms. Zulfer testified that she repeatedly refused to follow the instructions of the company’s CFO to set aside $1 million for executive bonuses without Board approval, since during her tenure at Playboy, the Board had always approval executive bonuses. When she refused, the CFO harassed her and took various actions that made it impossible for Zulfer to fulfill her duties, and the company ultimately terminated her. The jury found that Zulfer had engaged in protected whistleblower activities and that her whistleblowing was a substantial factor in her termination.

New York City Paid Sick Leave: On March 20, 2014, Mayor Bill de Blasio signed into law an expanded version of the Earned Sick Time Act that requires that all New York City businesses with five or more employees allow workers at least five days of paid sick leave. The law also added grandparents, grandchildren and siblings to the list of family members that workers can care for using sick time. The law goes into effect April 1, 2014. With this law, New York City will join the ranks of Jersey City and Newark in New Jersey; San Francisco; Washington D.C.; Seattle; Portland, Oregon; and Connecticut as jurisdictions that mandate paid sick leave.

Expanding Overtime: On March 13, 2014, President Obama ordered the U.S. Labor Department to revise federal rules to expand raise the overtime salary threshold from $23,600 per year. Currently most employees who earn $455 per week or less must receive overtime, but employees who earn over $455 may or may not be protected, depending on their duties. The Department of Labor has not yet issued any updates to overtime regulations, but Pelton & Associates will be keeping a close eye on any developments.

Revisions to The New York State Commercial Goods Transportation Industry Fair Play Act: On March 17, 2014 Governor Cuomo signed certain corrections to the Act, which creates a presumption that all delivery drivers in New York state are regular employees, not independent contractors, and should be paid as such unless one of two demanding tests can be met and the driver is issued a Form 1099 instead of W-2 for tax purposes. The most important of the modifications to the law are that it now applies to any and all drivers who operate a vehicle that weighs over 10,000 pounds and that it will go into effect April 10, 2014. The law includes civil penalties as well as criminal liability for willful misclassification of delivery drivers. This law represents New York’s ongoing efforts to combat the epidemic of employee misclassification that hurts federal and state governments, taxpayers, legitimate businesses, and misclassified workers.