Business Advisory

New sexual harassment guidelines for NYS employers

NYS sexual harassment law.png

Posted by Lucille Southard

The #MeToo movement and innumerable allegations of unwanted and inappropriate sexual advances in the workplace prompted New York legislators to include several provisions in the newly-passed state budget designed to prevent sexual harassment. While not all provisions take effect immediately, we encourage employers to begin preparing now. This post is a primer on what New York State employers will be expected to do to ensure a safe workplace for all workers.

Annual sexual harassment training

By October 9, all New York employers must implement sexual-harassment training programs. A model program created by state agencies is available if employers are unable to design their own sexual-harassment training programs that meet or exceed New York State standards.

Programs must include a definition of sexual harassment and specific examples of what constitutes inappropriate conduct, as well as detailed information on federal and state statutory remedies available to victims of harassment. Employers must also explain employees’ rights of redress and how to bring complaints.

As of now, the new laws are unclear about specific guidelines for the number of hours of training will be required and how the training can be administered (e.g., in person, webinar, etc.).

Employers must keep records of employee training for a minimum of three years, including signed acknowledgement forms from the employees who attended.

Nondisclosure agreements

Employers may no longer include confidentiality provisions in settlement agreements, except when the complainant requests confidentiality.

A related federal provision of the Tax Cuts and Jobs Act (TCJA) eliminates potential deductions for employers’ legal fees and settlement payments incurred by defendants’ sexual harassment cases that are subject to nondisclosure agreements.

Prevention policy

New York State employers must provide a written sexual-harassment policy and distribute it to employees. This policy must include:

  • A statement prohibiting sexual harassment and providing examples of what constitutes sexual harassment
  • Information about federal and state sexual-harassment laws and the remedies that are available to victims—and a statement that there may be additional local laws on the matter
  • A standard complaint form
  • Procedures for a timely and confidential investigation of complaints that ensures due process for all parties
  • An explanation of employees' external rights of redress and the available administrative and judicial forums for bringing complaints
  • A statement that sexual harassment is a form of employee misconduct and that sanctions will be enforced against those who engage in sexual harassment and against supervisors who knowingly allow such behavior to continue
  • A statement that it is unlawful to retaliate against employees who report sexual harassment or who testify or assist in related proceedings

Non-employees

Until now, contractors, vendors, and consultants have not been covered by New York State sexual harassment laws. As of April 11, 2018, Section 296-d of the New York State Human Rights Law prohibits an employer to permit sexual harassment of non-employees in the employer’s workplace. If harassment takes place and the employer knows or should reasonably know, but fails to take immediate corrective action, the employer can be held liable.

In conclusion

Employers should review and adjust existing policies and training to ensure a harassment-free workplace. For practical purposes, compliance will limit employer liability. Of course, the most important purpose of adhering to the new laws is to protect and support all workers with a safe working environment.

If you have any questions, please don’t hesitate to contact me directly.

Tax Cuts and Jobs Act Supplemental: Meals and entertainment

Posted by Evan Piccirillo, CPA

For years, many businesses have been keeping track of expenses for meals and entertainment in a single account with little need to communicate with their accountant; it was understood that 50 cents of each dollar would be a tax deduction. No more. Effective January 1, 2018, the Tax Cuts and Jobs Act (“TCJA”) makes notable changes to the tax treatment of certain disbursements relating to these categories of expense. As a result, the accounting for these expenses needs to be reconsidered. Let me break it down for you.

Prior to 2018, meals and entertainment expenses were limited to a 50% tax deduction, unless certain exceptions applied that would allow a 100% deduction. Under the TCJA, entertainment expenses are 0% tax deductible, with very few exceptions, while meal expenses are generally still 50% deductible, with some important changes to the exceptions. Understanding these exceptions is critical to ensuring your business receives the proper tax deduction.

Here is a list of fully (100%) deductible meal expenses:

  • Expenses included in the wages of the employee or included in income of the non-employee recipient (i.e. in W-2 wages of the employee or on a 1099 to a non-employee)
  • Expenses for an employee event (like a party)
  • Expenses for the general public (either as advertising/promotion or goodwill)

Here are 50% deductible expenses:

  • Meals with clients
  • Employee travel meals
  • Meals provided to employees for the convenience of the employer (but 0% after 2025)

And the 0% deductible expenses:

  • Entertainment for employees or clients (including sports and events tickets, membership dues to clubs, etc.)

Aside from the 50% to 0% change to entertainment expenses, the next most notable change is that of 100% to 50% (and later to 0% after 2025) to meals provided to employees for the convenience of the employer. In the past, these were considered de minimis fringe benefits and received a dollar-for-dollar tax deduction, but under the new law these kinds of expenses must be included in an employee’s income to be 100% deductible or fall to the 50% category. Not good for hungry employees and their employers.

To accommodate these new tax rules, businesses have to disambiguate meals and entertainment into entertainment (which is nondeductible), meals that are 50% deductible, and meals that are 100% deductible on their books. In absence of these separate ledger accounts, tax preparers will have to inquire about the allocation and taxpayers will need to analyze the charges booked to such an account, which can add time and contribute to errors.

Additionally, employers may need to review their policies and procedures for providing meals and/or entertainment to their employees and clients. Certainly they will need to reconsider those sports facility box seats. Also, since parties for employees are 100% deductible, perhaps it’s time for businesses to start throwing more parties?

If you would like additional guidance on this topic, contact your trusted advisor to assist you in making decisions going forward and to establish sound procedures to properly account for meals and entertainment expenses on a prospective basis.