Small businesses employ millions of American workers. Without the administrative oversight of larger companies, these businesses may not give their employees the same protections against discrimination and sexual harassment. The smallest of the small fit through gaps in federal anti-discrimination laws, leaving their employees without legal recourse. But now, the New York Human Rights Law is closing those gaps for New York companies, protecting small business employees no matter how few there are on the payrolls.
According to the Census Bureau’s Annual Survey of Entrepreneurs, 89% of all employers have less than 20 workers on the payroll. They make up nearly 17% of all employees, and that number is growing. In 2018, the Small Business Association reported that:
“Firms employing fewer than 20 employees experienced the largest gains, adding 1.1 million net jobs.”
In spite of their numbers, small business employees often have a hard time enforcing their right to a discrimination-free and harassment-free workplace. Small businesses often don’t have non-discrimination policies or dedicated HR departments to respond to discrimination complaints. With a more intimate working environment, these employees may also find it harder to file those complaints out of fear of retaliation. This is especially true in the smallest of small businesses, where federal anti-discrimination laws may not even apply.
Title VII of the federal Civil Rights Act prevents discrimination and harassment based on sex, gender, race, and many other inherent traits. Employers may not discriminate in hiring, firing, promotions, pay, or any other employment-related decision. They also are required to respond to employee concerns about harassment in the workplace.
But not all employers are created equal under Title VII. The federal law defines “employer” as “an industry affecting commerce who has fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year. . .” Any business with less than 15 employees, or with a primarily seasonal workforce may not qualify.
The Equal Pay Act has a similar limitation. It, and the Fair Labor Standards Act it references, defines an employer as an enterprise with not less than $500,000 in gross sales or business done. Many startups and small businesses fall well below that income threshold, which means the employees of those businesses may not be eligible to file suit when they are paid less for the same work because of their gender.
Federal law may not cover the smallest of small businesses, but as of February 8, 2020, workers in New York may still be protected. The New York State Human Rights Law has long applied to much smaller businesses -- covering employees with 4 or more employees, rather than 15. Last year, New York Governor Andrew Cuomo signed a law, effective February 8, 2020, expanding that coverage to include all New York employees, no matter how small. It also includes other workers who don’t technically qualify as “employees”, such as independent contractors, vendors, consultants, and service providers.
These changes mean that small business employees will be able to get relief, even if the company they work for isn’t set up to address sexual harassment or discrimination claims. Starting in 2019, the NYSHRL required all employers to prepare sexual harassment prevention policies and provide training that includes explaining how to report abuse when it happens. However, many small businesses may not have come into compliance. Even where a policy exists, it may be difficult for small business employees to lodge complaints when the person doing the discrimination or harassment is the owner of the company and their direct boss.
Small business employees can work with an experienced New York workplace discrimination attorney to prepare and file a complaint with the New York State Human Rights Commission, or in state court. These complaints can help facilitate changes in policy and enforcement within the small business, and can compensate workers for the discrimination they have faced.
At Eisenberg and Baum, LLP, our New York City-based sexual harassment attorneys know how hard it can be to get relief if you are a small business employee. We’ve seen how startups and inexperienced business owners sometimes treat their workers. We know how to use the New York State Human Rights Law to protect rights, and what you can do if your employer isn’t keeping up with the state’s requirements. We will help you negotiate with your employer, file the necessary administrative claims, and represent you in court. Contact us to schedule a consultation.