New Statute Would Mandate Broad Disclosures by New York Warehouse Employers

Seyfarth Synopsis: The New York State legislature has passed the Warehouse Worker Protection Act.  The bill, which has yet to be signed into law by Governor Hochul, requires covered companies to disclose production quotas to warehouse workers and prohibits companies from preventing employees from taking legally-protected breaks.  The bill will take effect 60 days after the Governor signs it into law.

Aimed at addressing the “rapid growth of just-in-time logistics and same- and next-day consumer package delivery,” the Warehouse Worker Protection Act (“WWPA”) seeks to regulate companies that institute quotas at their warehouses and logistics centers.  The WWPA lays out two main requirements for warehouse employers with employee quotas: (1) provide notice of the quotas to employees; and (2) refrain from instituting a quota that prevents employees from taking breaks. 

The bill—the first of its kind in the nation—has been presented to Governor Kathy Hochul, who is expected to sign the bill.  It will take effect 60 days following her signature.

A detailed summary of this legislation follows:

Coverage.  The bill applies to any employer that, “at any time in the prior twelve months, employs or exercises control over the wages, hours, or working conditions of one hundred or more employees at a single warehouse distribution center or five hundred or more employees at one or more warehouse distribution centers in the state.”

Definitions.  The bill provides the following definitions of “quota” and “warehouse distribution center”:

• Quotas are defined as work standards that require employees to perform “at a specified productivity speed,” or where employees’ actions are categorized by the time spent “performing tasks and not performing tasks, and the employee’s failure to complete a task performance standard . . . may have an adverse impact on the employee[s’] continued employment.”
• Warehouse Distribution Center is defined by the North American Industry Classification System Codes based on industry:
  • Code 493 for warehousing and storage;
  • Code 423 for merchant wholesalers, durable goods;
  • Code 424 for merchant wholesalers, nondurable goods;
  • Code 454,110 for electronic shopping and mail-order houses; or
  • Code 492,110 for couriers and express delivery services.  

Requirements.  Covered employers must abide by the following requirements:

• Quota Notification
  • The employer must provide a written description of each quota and any potential adverse employment action that could result from failure to meet it. Notice must be provided to current employees within 30 days of the effective date of the law, at the start of employment for new employees, and within two days of any change in the quota.
  • Each time an employer takes an adverse employment action against an employee based on the quota, it must provide that employee with the applicable quota for that employee.
• Breaks
  • Employees may not be required to meet a quota that prevents them from taking meal or rest periods or using the bathroom, including reasonable time to get to and from the bathroom.
• Recordkeeping
  • Covered employers must maintain records of each employee’s work speed data, aggregated work speed data for similar employees at the same establishment, and the required written notices of the quotas.
  • Following an employee’s separation from employment, records covering the six-month period prior to the date of separation must be preserved for three years and made available to the Commissioner of Labor upon request.
• Employee Right to Request Quota Description
  • Current and former employees can request a written description of each quota to which they are or were subject, a copy of their personal work speed data, and a copy of the aggregated work speed data.

Anti-Retaliation.  The bill contains standard anti-retaliation language prohibiting covered employers from retaliating against employees who exercise their rights under the law.

Enforcement and Penalties.  The bill does not provide for a private right of action by employees to enforce their rights in court.  Rather, it authorizes the Labor Commissioner to assess civil penalties for violations: up to $100 for a first offense, and $500 for subsequent offenses; penalties up to $20,000 for retaliation; and penalties up to 100 percent of unpaid wages.  The bill also provides for criminal penalties for violators.

Employers with operations involving covered warehouses should review the legislation and begin making changes to ensure compliance once this bill has been signed into law.

Please reach out to the authors of this alert or another Seyfarth contact if you wish to discuss these developments.