STATE OF NEW YORK ________________________________________________________________________ 1807 2023-2024 Regular Sessions IN ASSEMBLY January 23, 2023 ___________ Introduced by M. of A. DINOWITZ, STECK, L. ROSENTHAL, ZEBROWSKI, FAHY, SANTABARBARA, PAULIN -- Multi-Sponsored by -- M. of A. BRAUNSTEIN, COOK, EPSTEIN, GLICK, SIMON -- read once and referred 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 require- ment to enter into a covenant not to compete The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. This act shall be known and may be cited as the "New York 2 State mobility and opportunity for vulnerable employees act" or the "NY 3 MOVE act". 4 § 2. The labor law is amended by adding a new article 33-A to read as 5 follows: 6 ARTICLE 33-A 7 NEW YORK STATE MOBILITY AND OPPORTUNITY FOR VULNERABLE EMPLOYEES ACT 8 Section 960. Definitions. 9 961. Prohibiting covenants not to compete for low-wage employ- 10 ees. 11 962. Disclosure requirement for covenants not to compete. 12 963. Enforcement. 13 § 960. Definitions. For purposes of this article, the following terms 14 shall have the following meanings: 15 1. "Commerce" has the meaning given such term in section three of the 16 Fair Labor Standards Act of 1938 (29 U.S.C. 203). 17 2. "Covenant not to compete" means an agreement: 18 (a) between an employee and employer that restricts such employee from 19 performing: 20 (i) any work for another employer for a specified period of time; 21 (ii) any work in a specified geographical area; or EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD00818-01-3A. 1807 2 1 (iii) work for another employer that is similar to such employee's 2 work for the employer included as a party to the agreement; and 3 (b) that is entered into after the effective date of this article. 4 3. "Employee", "employer", "enterprise", "enterprise engaged in 5 commerce or in the production of goods for commerce", and "goods" have 6 the meanings given such terms in section three of the Fair Labor Stand- 7 ards Act of 1938 (29 U.S.C. 203). 8 4. "Livable hourly rate" means: 9 (a) for the fiscal year of the effective date of this article, the 10 greater of: 11 (i) fifteen dollars per hour; or 12 (ii) the hourly rate equal to the minimum wage required by the appli- 13 cable state or local minimum wage law; and 14 (b) for each succeeding fiscal year, the greater of: 15 (i) the adjusted amount described in subdivision three of section nine 16 hundred sixty-one of this article; or 17 (ii) the hourly rate equal to the minimum wage required by the appli- 18 cable state or local minimum wage law. 19 5. "Low-wage employee": 20 (a) means an employee who, excluding any overtime compensation 21 required under section seven of the Fair Labor Standards Act of 1938 (29 22 U.S.C. 207) or under an applicable state law, receives from the applica- 23 ble employer: 24 (i) an hourly compensation that is less than the liveable hourly rate; 25 or 26 (ii) an annual compensation that is equal to or less than: 27 (A) for the fiscal year of the effective date of this article, thir- 28 ty-one thousand two hundred dollars per year; and 29 (B) for each succeeding fiscal year, the adjusted amount described in 30 subdivision three of section nine hundred sixty-one of this article; and 31 (b) does not include any salaried employee who receives from the 32 applicable employer compensation that, for two consecutive months, is 33 greater than: 34 (i) for the fiscal year of the effective date of this article, five 35 thousand dollars; and 36 (ii) for each succeeding fiscal year, the adjusted amount described in 37 subdivision three of section nine hundred sixty-one of this article. 38 § 961. Prohibiting covenants not to compete for low-wage employees. 1. 39 No employer shall enter into a covenant not to compete with any low-wage 40 employee of such employer, who in any work week is engaged in commerce 41 or in the production of goods for commerce (or is employed in an enter- 42 prise engaged in commerce or in the production of goods for commerce). 43 2. An employer who employs any low-wage employee, who in any work week 44 is engaged in commerce or in the production of goods for commerce (or is 45 employed in an enterprise engaged in commerce or in the production of 46 goods for commerce), shall post notice of the provisions of this article 47 in a conspicuous place on the premises of such employer. 48 3. (a) For each fiscal year after the fiscal year of the effective 49 date of this article, the commissioner shall adjust each amount in 50 effect under subparagraph (i) of paragraph (b) of subdivision four of 51 section nine hundred sixty of this article, clause (B) of subparagraph 52 (ii) of paragraph (a) of subdivision five of section nine hundred sixty 53 of this article, or subparagraph (i) of paragraph (b) of subdivision 54 five of section nine hundred sixty of this article for inflation by 55 increasing each such amount, as in effect for the preceding fiscal year, 56 by the annual percentage increase in the Consumer Price Index for UrbanA. 1807 3 1 Wage Earners and Clerical Workers (United States city average, all 2 items, not seasonally adjusted), or its successor publication, as deter- 3 mined by the Bureau of Labor Statistics. 4 (b) The amounts adjusted under paragraph (a) of this subdivision shall 5 be rounded to the nearest multiple of $0.05. 6 § 962. Disclosure requirement for covenants not to compete. In order 7 for an employer to require an employee, who in any work week is engaged 8 in commerce or in the production of goods for commerce (or is employed 9 in an enterprise engaged in commerce or in the production of goods for 10 commerce) and is not a low-wage employee, to enter into a covenant not 11 to compete, the employer shall, prior to the employment of such employee 12 and at the beginning of the process for hiring such employee, have 13 disclosed to such employee the requirement for entering into such coven- 14 ant. 15 § 963. Enforcement. 1. The commissioner shall have the power to 16 receive, investigate, attempt to resolve, and enforce a complaint of a 17 violation of sections nine hundred sixty-one and nine hundred sixty-two 18 of this article, subject to subdivision two of this section. 19 2. (a) The commissioner shall impose a civil fine: 20 (i) with respect to any employer who violates subdivision one of 21 section nine hundred sixty-one or section nine hundred sixty-two of this 22 article, an amount not to exceed five thousand dollars for each employee 23 who was the subject of such violation; and 24 (ii) with respect to any employer who violates subdivision two of 25 section nine hundred sixty-one of this article, an amount not to exceed 26 five thousand dollars. 27 (b) In determining the amount of any civil fine under this section, 28 the commissioner shall consider the appropriateness of the fine to the 29 size of the employer subject to such fine and the gravity of the appli- 30 cable violation. 31 § 3. This act shall take effect immediately and shall apply to employ- 32 ees hired on and after such date.