Fulfilling the New York Dream – 4 Key Workplace Initiatives in Governor Hochul’s Speech

New York Governor Kathy Hochul recently delivered her second speech to the state – her first as governor-elect – and managed to provide an insight into some key areas of labor law that New York employers will face in the coming year and years to come will affect. Her speech focused on less “hot” labor and labor rights initiatives than last year’s speech and for the second year in a row did not address the gig worker issue or suggest changing the test used to classify independent contractors, which has so often been a focus of the former governor Cuomo. Here’s an overview of the four key jobs-related suggestions made by Gov. Hochul during her Jan. 10 address.

1. Index the minimum wage against inflation

Governor Hochul proposed automatically raising the minimum wage to keep up with inflation. Upon reaching the $15 minimum wage, each region’s minimum wage would increase year-on-year in line with the Northeast Region’s Consumer Price Index W.

Justifying the proposal, Gov. Hochul cited that the monthly cost of goods and services for households has increased by 13.4% since October 2020 and the $15 minimum wage has increased by $1.78 in purchasing power since its inception have lost. Gov. Hochul added that to ensure no one-year increase jeopardizes employment, annual increases should be capped and an “exit ramp” should be available in the event of certain economic conditions.

It’s also important to note that Gov. Hochul says New York won’t be alone in pegging the minimum wage to inflation — as 17 other states are currently pegging their minimum wage to either inflation, another economic formula, or this to plan.

2. Reform the personnel practices of the travel nursing agency

Governor Hochul also addressed the introduction of legislation aimed at reforming temporary employment agencies in the healthcare industry. During the COVID-19 pandemic, healthcare providers have relied on temporary agency contracts for contract staff and traveling nurses to meet overwhelming demand. Dependence on agency staff in post-pandemic healthcare facilities has skyrocketed since then. The governor noted that labor costs for vendors have increased because contract labor can be significantly more expensive than directly employed personnel.

Gov. Hochul’s proposal would require recruitment agencies to register and report key data about their operations to increase transparency about the use and cost of contract labor. The state will use the data collected to explore options to address the dependency on and rising costs associated with agency staff.

While this may not have an immediate broad impact in the healthcare industry, this data could have long-term implications for the healthcare workforce market, in both unionized and non-unionized healthcare settings — as well as increasing the immediate administrative burden on certain healthcare employers.

3. Modernization and rationalization of the state’s training and employment infrastructure

Gov. Hochul pointed out that there is an ongoing mismatch between the skills needed by employers and those of the officiating workforce in New York. She cited the statistic that there are approximately 1.3 job openings for every job seeker in New York, which the governor attributed to a discrepancy in educational requirements, lack of job skills, and lack of training or advancement opportunities as some of the reasons employers have difficulty finding roles to occupy.

Gov. Hochul would propose converting the Department of Labor’s career centers to “Community Training and Career Centers” and aim to provide free training to unemployed and underemployed New Yorkers in high-need areas such as digital and financial literacy and entrepreneurship. This will be combined with a new, large-scale on-the-job training program administered by the Department of Labor to upskill 3,000 workers each year, with a focus on high-demand industries and hard-to-fill job titles. Gov. Hochul said she will formulate a new statewide framework that will guide New York’s human resource development strategy for the coming year and ensure that all agencies that implement and fund human resource development projects are moving in the same direction.

4. Follow up to 2022 Chief Disability Officer

In his speech last year, Gov. Hochul created the Office of the Chief Disability Officer (CDO) to put New York at the forefront of employment for workers with disabilities. In fact, in the current tight labor market, the employment rate of people with disabilities has skyrocketed. The governor has directed the office of the CDO, in coordination with the Department of Labor, to connect people with disabilities with inclusive internships with state agencies in hopes of long-term, stable employment.

Governor Hochul will also issue an executive order aimed at making New York a “model employer for people with disabilities.” The state has been tasked with identifying policies and practices that will help increase employment rates and reduce poverty rates for people with disabilities, and also work with businesses to facilitate the adoption of inclusive policies and practices that support integrated employment .

2023 and the year to come

With Gov. Hochul’s address and changes already coming for 2023, New York employers need to be wary. Although Gov. Hochul’s workplace-related proposals were more modest than some of her predecessors, it’s clear that the governor and the legislature (not to mention local jurisdictions like New York City) will continue to push for New York to become even more worker-friendly jurisdiction.

We will closely follow these various initiatives throughout the year. Make sure you’re subscribed to the Fisher Phillips Insight System to get the latest information delivered straight to your inbox. If you have any questions, you should contact your Fisher Phillips attorney, the authors of this insight, or an attorney in our New York City office.

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