Prohibits employers from requiring low-wage employees to enter into covenants not to compete and requires employers to notify potential employees of any requirement to enter into a covenant not to compete

Title of bill

An act to amend the labor law, in relation to prohibiting employers from requiring low-wage employees to enter into covenants not to compete and requiring employers to notify potential employees of any requirement to enter into a covenant not to compete

Purpose or general idea of bill

This bill would prohibit employers from requiring low-wage workers from entering into non-compete contracts as a condition of employment and would require non low-wage workers to be informed of such a potential agreement at the beginning of a hiring process.

Summary of specific provisions

Section 1 creates the short title. "The New York State Mobility and Opportunity for Vulnerable Employees Act" (MOVE)

Section 2 amends the labor law by adding a new article 33 that provides definitions for the article, prohibits the use of any "covenant not to compete" for low-wage workers, provides the Commissioner of the Department of Labor to adjust the threshold for "low-wage" and powers to enforce the provisions of the article. Article 33 also would require any employer who requires employees not defined as "low-wage" to be notified of any "covenant not to compete" at the beginning of the hiring process.

Section 3 sets the effective date.

Justification

This legislation would ban the use of non-compete agreements for workers earning less than $15 an hour or $31,200 per year. As we push toward paying workers a "livable" minimum wage it is important that they enjoy the freedom to seek better employment as they hone skills in specific industries. The use of non-compete agreements when dealing with high level executives and others making high salaries is one thing, but recent news reports and federal legislation shedding light on the use of such agreements on sandwich shops and other traditionally low-wage jobs. This practice will hinder the upward mobility of workers trying to better themselves and their families.

The MOVE Act's intention is to ensure low-wage workers are not being taken advantage of by being locked in to a low paying job with no options once skills have been learned and specialties obtained that could translate to higher paying jobs. Additionally, the bill would require any company that uses non-compete agreements for employees not defined as "low-wage" under the bill, to disclose the use of such an agreement at the beginning of the hiring process. This creates a situation where the employee seeking a higher paying job would at least be aware of the terms they are going to be agreeing to before the process of hiring begins.

Prior legislative history

This is a new legislation for 2016 Session

Fiscal implications

None to the State.

Effective date

This act shall take effect immediately and shall apply to employees hired on or after such date.