What's happening
This bill prohibits employers from requiring low-wage employees to sign non-compete agreements and mandates disclosure of such agreements to other employees.
Why it matters
Expands job mobility for low-wage workers. By prohibiting non-compete agreements for employees earning less than $15/hour or $31,200/year (with future inflation adjustments), the bill removes barriers that often keep low-wage workers from seeking better-paying jobs or changing employers for improved working conditions.
Encourages wage growth and labor market competition. Preventing employers from restricting low-wage employees’ job options can lead to higher wages, as workers are freer to leverage competing job offers or move to industries with greater demand for their skills.
Increases employer accountability and transparency. The bill mandates that employers clearly disclose the existence of non-compete agreements to potential hires who do not fall under the “low-wage” threshold, and requires prominent workplace postings about these rights, helping employees make informed decisions.
Provides enforceable protections. The law establishes significant civil penalties (up to $5,000 per violation) and grants state authorities investigative and enforcement powers, giving the bill real teeth and deterring employers from circumventing its provisions.
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Headline styles
Ban Noncompetes for Low-Wage Workers
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to labor
- Committed to rules
- Advanced to third reading
- 2nd report cal.
- 1st report cal.670
- Referred to labor
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Ban Noncompetes for Low-Wage Workers
In Assembly Committee · Labor · Sponsor Jeffrey Dinowitz
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4610
2017-2018 Regular Sessions
IN SENATE
February 21, 2017
Introduced by Sen. SAVINO -- read twice and ordered printed, and when printed to be committed to the Committee on Labor
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
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. This act shall be known and may be cited as the "New York State mobility and opportunity for vulnerable employees act" or the "NY MOVE act".
§ 2. The labor law is amended by adding a new article 33 to read as follows:
ARTICLE 33
NEW YORK STATE MOBILITY AND OPPORTUNITY FOR VULNERABLE EMPLOYEES ACT Section 950. Definitions.
951. Prohibiting covenants not to compete for low-wage employ-
ees.
952. Disclosure requirement for covenants not to compete.
953. Enforcement.
§ 950. Definitions. For purposes of this article, the following terms shall have the following meanings:
1. "Commerce" has the meaning given such term in section three of the Fair Labor Standards Act of 1938 (29 U.S.C. 203).
2. "Covenant not to compete" means an agreement:
(a) between an employee and employer that restricts such employee from performing:
(i) any work for another employer for a specified period of time;
(ii) any work in a specified geographical area; or
(iii) work for another employer that is similar to such employee's work for the employer included as a party to the agreement; and
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03762-01-7
S. 4610 2
(b) that is entered into after the effective date of this article.
3. "Employee", "employer", "enterprise", "enterprise engaged in commerce or in the production of goods for commerce", and "goods" have the meanings given such terms in section three of the Fair Labor Standards Act of 1938 (29 U.S.C. 203).
4. "Livable hourly rate" means:
(a) for the fiscal year of the effective date of this article, the greater of:
(i) fifteen dollars per hour; or
(ii) the hourly rate equal to the minimum wage required by the applicable state or local minimum wage law; and
(b) for each succeeding fiscal year, the greater of:
(i) the adjusted amount described in subdivision three of section nine hundred fifty-one of this article; or
(ii) the hourly rate equal to the minimum wage required by the applicable state or local minimum wage law.
5. "Low-wage employee":
(a) means an employee who, excluding any overtime compensation required under section seven of the Fair Labor Standards Act of 1938 (29 U.S.C. 207) or under an applicable state law, receives from the applicable employer:
(i) an hourly compensation that is less than the liveable hourly rate; or
(ii) an annual compensation that is equal to or less than:
(A) for the fiscal year of the effective date of this article, thirty-one thousand two hundred dollars per year; and
(B) for each succeeding fiscal year, the adjusted amount described in subdivision three of section nine hundred fifty-one of this article; and
(b) does not include any salaried employee who receives from the applicable employer compensation that, for two consecutive months, is greater than:
(i) for the fiscal year of the effective date of this article, five thousand dollars; and
(ii) for each succeeding fiscal year, the adjusted amount described in subdivision three of section nine hundred fifty-one of this article.
§ 951. Prohibiting covenants not to compete for low-wage employees. 1. No employer shall enter into a covenant not to compete with any low-wage employee of such employer, who in any work week is engaged in commerce or in the production of goods for commerce (or is employed in an enterprise engaged in commerce or in the production of goods for commerce).
2. An employer who employs any low-wage employee, who in any work week is engaged in commerce or in the production of goods for commerce (or is employed in an enterprise engaged in commerce or in the production of goods for commerce), shall post notice of the provisions of this article in a conspicuous place on the premises of such employer.
3. (a) For each fiscal year after the fiscal year of the effective date of this article, the commissioner shall adjust each amount in effect under subparagraph (i) of paragraph (b) of subdivision four of section nine hundred fifty of this article, clause (B) of subparagraph (ii) of paragraph (a) of subdivision five of section nine hundred fifty of this article, or subparagraph (i) of paragraph (b) of subdivision five of section nine hundred fifty of this article for inflation by increasing each such amount, as in effect for the preceding fiscal year, by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (United States city average, all
S. 4610 3
items, not seasonally adjusted), or its successor publication, as determined by the Bureau of Labor Statistics.
(b) The amounts adjusted under paragraph (a) of this subdivision shall be rounded to the nearest multiple of $0.05.
§ 952. Disclosure requirement for covenants not to compete. In order for an employer to require an employee, who in any work week is engaged in commerce or in the production of goods for commerce (or is employed in an enterprise engaged in commerce or in the production of goods for commerce) and is not a low-wage employee, to enter into a covenant not to compete, the employer shall, prior to the employment of such employee and at the beginning of the process for hiring such employee, have disclosed to such employee the requirement for entering into such covenant.
§ 953. Enforcement. 1. The commissioner shall have the power to receive, investigate, attempt to resolve, and enforce a complaint of a violation of sections nine hundred fifty-one and nine hundred fifty-two of this article, subject to subdivision two of this section.
2. (a) The commissioner shall impose a civil fine:
(i) with respect to any employer who violates subdivision one of section nine hundred fifty-one or section nine hundred fifty-two of this article, an amount not to exceed five thousand dollars for each employee who was the subject of such violation; and
(ii) with respect to any employer who violates subdivision two of section nine hundred fifty-one of this article, an amount not to exceed five thousand dollars.
(b) In determining the amount of any civil fine under this section, the commissioner shall consider the appropriateness of the fine to the size of the employer subject to such fine and the gravity of the applicable violation.
§ 3. This act shall take effect immediately and shall apply to employees hired on and after such date.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
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
2016 Session - S. 6797 - new bill, referred to Labor, reported to calendar
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.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.