In light of the high profile cases in recent news, New York State Governor Andrew Cuomo signed into law new provisions targeted at preventing sexual harassment in the workplace. The new law went into effect on April 12, 2018, and requires New York State employers to:

  • adopt sexual harassment prevention policies and conduct annual training on such policies,
  • eliminates the use of non-disclosure provisions unless preferred by the complainant,
  • prohibition of arbitration provisions pertaining to claims of sexual harassment, and
  • expands workplace protections to non-employees for claims of sexual harassment

Mandatory Sexual Harassment Prevention Policies and Training

Effective October 9, 2018, every New York State employer will be required to have in place a sexual harassment prevention policy that contains certain provisions. Those organizations that already have anti-harassment policies in effect will most likely need to update these policies to conform to the new law. In addition, pursuant to the new law, employers will need to conduct annual, interactive training that meets the requirements of the law.

In addition, beginning January 1, 2019, nonprofit organizations, or any other business, with a contract with NY State or one of its municipalities will need to certify that they are in compliance with the policy and annual training provisions of the law.

Elimination of Non-Disclosure Provisions Without Consent

Effective July 11, 2018, non-disclosure provisions in agreements settling claims of sexual harassment will be prohibited, unless inclusion of the nondisclosure requirement is the complainant’s preference. The new law does permit a non-disclosure provision to be presented to a complainant in connection with a settlement, however the complainant has 21 days to consider the non-disclosure provision and if, after the 21-day period, the complainant wishes to include the provision, then the parties must document such preference in writing signed by all parties. If the complainant chooses not to include the provision, then it must be removed from the agreement. There is also a required seven-day revocation period following the execution of the agreement. The agreement does not go into force until the seven-day revocation period has expired without the complainant’s revocation.

Restriction on Mandatory Arbitration Clauses

Effective July 11, 2018, contractual provisions that require individuals to resolve sexual harassment claims via arbitration will be prohibited. Also, the new law expressly provides that if there is a conflict between this prohibition and a collective bargaining agreement in effect, the collective bargaining agreement will control.

This restriction on mandatory arbitration clauses is not anticipated to have a significant impact on NY State employers as it will not apply in those situations where it is inconsistent with federal law. This is significant since the Federal Arbitration Act (FAA) has broad application, impacting most NY State employers. Therefore, only a few employee arbitration agreements should fall outside of the scope of the FAA. Where an arbitration clause is covered by the FAA, the new New York State restriction on mandatory arbitration clauses should not apply.

Protections for Non-Employees

The new law also extends protections against sexual harassment to non-employees in the employer’s workplace, including contractors, subcontractors, vendors, volunteers, consultants, and other individuals providing services pursuant to a contract in the workplace. Unlike the other provisions of the law that provide a grace period for employers to comply, the expanded protections for non-employees took effect on April 12, 2018, when the law was signed.

New York State has not yet issued acceptable policies and training programs. Once issued, employers will need to quickly come into compliance. In the meantime, employers should familiarize themselves and their management team with the provision of the new sexual harassment prevention laws.

Kenneth R. Cerini, CPA, CFP, FABFA

Kenneth R. Cerini, CPA, CFP, FABFA

Managing Partner

Ken is the Managing Partner of Cerini & Associates, LLP and is the executive responsible for the administration of our not-for-profit and educational provider practice groups. In addition to his extensive audit experience, Ken has been directly involved in providing consulting services for nonprofits and educational facilities of all sizes throughout New York State in such areas as cost reporting, financial analysis, Medicaid compliance, government audit representation, rate maximization, board training, budgeting and forecasting, and more.