Employee Rights

Retirement benefits play a critical part in employee recruitment and retention.  Library leadership should carefully consider—and routinely re-evaluate—the role of retirement in the suite of benefits they use to attract and nurture personnel.

To craft the right retirement approach, leaders must consider not only the legal landscape of their library, but the local job market, their recruitment objectives, and their retention goals.  The final approach should not only support the library’s plan of service and vision for its mission, but comply with all relevant law.  To ensure this, the plan and final documents should be evaluated by both leadership, as well as an HR professional and attorney.

Municipal public libraries crafting a retirement plan must work with local government; this is because the retirement benefits they can offer flow from the municipality they are attached to[1]. For that reason, any municipal public library addressing retirement benefit issues should reach out to their municipality’s HR department and/or attorney. 

The member’s questions are a good jumping-off point for some general guidelines to this process.  To take them in order:

Are municipal public libraries obligated to provide retirement benefits for all employees?

No.  Per New York Retirement and Social Security System Law Title 2, Article 2, municipalities may resolve to participate and enroll their employees in the New York State & Local Retirement System (“NYSLRS”), but such resolution and enrollment is not compulsory. 

Once a municipality decides to enroll, the NY Comptroller’s Office helps with the initial assessment of costs[2].  After enrollment by the employer, precise rules govern which employees are eligible for what level of plan; a great summary of who qualifies, and how, is here: https://osc.state.ny.us/retire/word_and_pdf_documents/employers_files/employers-guide/section-5.pdf.

Does the library board need to approve a motion to provide retirement benefits for all employees or selected employees?

Yes and no.  A municipal public library’s enrollment in the NYSLRS flows through the enrolled municipality; [3] if the municipality is enrolled in the system, the (municipal public) library can participate.  That said, to emphasize employer autonomy, promote awareness, and ensure harmony of the retirement plan and benefits with other library operations, the board should be apprised of and vote on the retirement benefit, as well as its description within the employee manual and relevant policy.

NOTE: This “employer autonomy” aspect cannot be emphasized enough.  While great care should be taken by library leadership to coordinate certain employment-related matters with the municipality, a municipal public library SHOULD NEVER SURRENDER OR IGNORE THEIR AUTONOMY AS THE EMPLOYER.  There are a great many opinions[4] of the NY Comptroller (the go-to for municipal governance and budget issues) that emphasize the importance of this notion; it is a critical consideration and one deserving of a great deal of board attention and foresight (and professional input).

Does the number of [employee]hours pertain?

There are very precise formulas and enrolling, qualifying, reporting, and claiming NYSLRS retirement benefits[5], and employee hours are most definitely a part of those formulas. 

Hours are only a small piece of the puzzle, though.  The bigger parts are the details leadership will explore as they identify, and develop, a retirement benefit that supports the strategic direction and mission of their library.  That is a project that will take many hours of thoughtful work and exploration…but if undertaken with the right players, will bring great benefits.[6]

[1] Interestingly and somewhat famously (among the 14,000 or so library law aficionados in New York), this does not mean the municipality is the employer.  However, it does mean that many of the employee retirement benefits must (to a certain extent) be coordinated with the procedures and reporting of the local government.  NOTE: I invented the possible number of “library law aficionados,” but since I find this stuff fascinating, maybe 13,999 other people do, too.

[2] Information on kicking off the process of enrollment is here: https://www.osc.state.ny.us/retire/employers/employer_partnership/an_employers_role/becoming_a_participant.php

[3] As reflected in the excellent comparative chart on the New York State Education Department’s Division of Library Development Page: http://www.nysl.nysed.gov/libdev/libs/pltypes.htm.

[4] For instance, Op. State Comptroller 93-15, from 1993.

[5] A helpful guide on reporting hours to the NYERS is here: https://www.osc.state.ny.us/retire/word_and_pdf_documents/employers_files/employers-guide/section-6.pdf#search=%20libraries.

[6] Pun intended.

Libraries are service-intensive environments, which means they depend on their employees to report to work. However, since so much depends on staff, libraries are also wise to give their employees the tools for self-care and a proper work-life balance. A PTO policy is a great way to facilitate this.

What is “PTO?” Put simply, PTO is a finite amount of paid time off work (scheduled or unscheduled), to be used for vacation, short illnesses, “mental health days,” or whatever else is needed (note: often, bereavement is excluded). By not dividing time off into distinct types, PTO enhances employee privacy and flexibility—while decreasing the administrative burden of tracking the type of time.

The increasing use of PTO also makes sense as the ADA, the FMLA, and the upcoming New York Paid Family Leave Act have changed the landscape of medically-related time off.

Before we get to the heart of the member’s question, let’s start with some crucial basics. Under NY labor law, employers must have a written policy (or policies) governing sick leave, vacation, personal leave, and holidays. [1] Under that law, as governed by the policy, the value of these “wage supplements” must be paid out at termination.

That said, conditions can be put on the terms of these “supplements”; according to the DOL the amount of time that can be cashed out “depends upon the terms of the vacation and/or resignation policy.”

This guidance is backed up by case law: New York courts [2] have held that the required policies about PTO can specify that employees lose accrued benefits if such loss is a condition of the policy.

Among other things, conditions in PTO policies may cover the following:

• How PTO accrues (annual, or more incremental);

• How eligibility and earned amounts are governed (for instance, part-time vs. full-time, or based on years of service);

• How much PTO can be paid out at termination;

• If eligibility for payout survives termination for misconduct;

• How “scheduled” and “unscheduled” (sick, emergency meeting, etc.) PTO is granted;

• If a certain amount of reasonable notice before quitting is required to get the payout;

• If a restriction on the number of employees using PTO at once is needed (this is critical for service-intensive environments like libraries).

In addition, any transitional/new policy can (and should) expressly address already accrued wage supplements (for instance, converting any unused vacation to PTO, or paying it out). As the member shows sensitivity to in their question, the new policy should never nullify wage supplements already accrued.

So, here we are, at the heart of the member’s question: can the amount of PTO cashed out at termination be pro-rated based on the time of year the resignation happens? The answer is: Once given, PTO should not be clawed back based on a variable factors, even those factors are set out in the policy. However, the solution is just as the member posits (and as is listed in the third bullet, above): uniformly capping the amount to be paid out, and applying it without fail. [3]

IMPORTANT CONSIDERATION

Of course, developing a PTO policy does not happen in a vacuum. Aside from the recruitment, retention, and employee wellness objectives, a library considering transitioning to PTO needs to consider:

• The nature of the library (public, private, part of a larger entity, etc.);

• The bylaws and role of any board policy or committee (for instance, if there is a personnel or HR committee, this topic would be of interest to them);

• Any union contracts or other contractual obligations at play;

• The full suite of employee benefit policies, and the recruitment, development, and employee retention and compliance goals they serve;

• The budget impact of any changes.

Once a library arrives at draft policy, prior to it being enacted, a lawyer should review the policy to ensure it is compliant, and works well with related legal obligations, contracts, policies and procedures. Further, it is ideal if the policy is reviewed by the treasurer, and/or the person preparing the budget, and/or the person who files any tax forms on behalf of the entity. I’m no accountant, but I know PTO is logged in a specific way on balance sheets, and it can have an impact on financial statements.

So once you have your draft PTO policy, invite your lawyer, your treasurer, and your accountant (there’s a joke in there somewhere, I know), over for a quick cup of coffee, and make sure everyone says you’re ready to launch!

[1] Section 195.5 of the Labor Law states: Every employer shall notify his employees in writing or by publicly posting the employer's policy on sick leave, vacation, personal leave, holidays and hours.

[2] [See Glenville Gage Company, Inc. v. Industrial Board of Appeals of the State of New York, Department of Labor, 70 AD2d 283 (3d Dept 1979) affd, 52 NY2d 777 (1980).]

[3] PTO can also be given on a more incremental basis, but this nullifies some of the flexibility benefits it can bring. That said, the policy should consider when an employee first qualifies, and if starting employees get a pro-rated amount based on their start date.

Many government agencies provide guidance on hiring a 1099 or an employee, and the guidance is centered on the direction and responsibility of the worker and control of work to be done. The first step is knowing the difference between a ‘contractor relationship’ and an ‘employee relationship.

On one end of the continuum, you have a painter coming to paint your house. You review an estimate, sign a contract, tell them what color you want, what to paint and the rest is handled by the painter or painting company. This includes methods, paint, supplies, and even expenses which are often accounted for in the bill you receive once the project is completed.

The above is a true 1099 contractor relationship. Direction and control lie with the contractor, as does the risk of profit or loss.

Employee workers are oriented and subjected to your company policies and total direction on when and how the work needs to be completed, trained, provided supplies and workspaces, and reimbursed for business expenses and travel. Your employees are paid an agreed upon wage regardless of how well the organization does financially. The direction and control over the work lies with the employer, as does the risk of profit or loss.

In our example, the painting company owns financial responsibility for the work and the employment relationship with the workers that paint your house.

Additionally, the protections, rights, and benefits an 'employee' receives would not be available to a contractor to do the same work. That presents an obvious problem in the view of the DOL, IRS, Worker's Compensation, and EEOC. The government agencies vested interest in ensuring worker’s rights are properly protected makes this a high-profile topic that is very much on their radar.

To determine if you need a 1099, evaluate the work that needs to get done. Is it core to the mission of the organization, long-term, and being done by a current employee? If yes, that role that should be classified as an employee.

Unfortunately, there is no ‘catch-all’ provided by governing agencies to help with classifying your workforce. The guidelines for the IRS and DOL can be found here;

IRS: https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee

Federal DOL: https://www.dol.gov/agencies/whd/flsa/misclassification

The following includes some key guidelines that will help ensure you are classifying your workforce correctly. The more statements that apply below indicate that your worker is likely an employee:

• Perform work that is core to the business or mission
• Perform work that others are already doing in the organization
• Are paid a set hourly or weekly rate
• Are trained by the organization
• Receive all supplies, work resources, tools, and spaces from the organization
• Are under supervision by a staff member
• Receive expense reimbursement
• Do not have a business or work with other businesses

The most risk-averse method of hiring a worker is as an hourly employee. Stepping away from this classification with a worker should be an exercise in ensuring the work relationship fits the guidance given for a ‘contractor relationship.’

A good rule of thumb in any employment situation is to err in favor of the worker. In the case of uncertainty about worker classification, classify as an employee.