New York to expand whistleblower protections
  1. Home
  2.  ▶ 
  3. Employer Fraud
  4.  ▶ New York to expand whistleblower protections

New York to expand whistleblower protections

On Behalf of | Nov 25, 2021 | Employer Fraud, Whistleblower Protection

Governor Kathy Hochul has hit the ground running in many respects. Amidst this flurry of activity was to sign an update of New York Labor Law Section 740 that dramatically expands the whistleblower protections in the state.

Some notable changes

These changes will go into effect on January 26, 2022.

  1. While Section 740 previously only protected employees (“an individual who performs services for and under the direction and control of an employer for wages or other remuneration”), it will now also protect former employees and independent contractors.
  2. The amendment also expands whistleblowing beyond the previous “ “substantial and specific danger to the public health and safety.” It will also protect action or threat to report an employer action, policy, or practice if it violates local, state or federal law, rules or regulations. These protections are extended to employees reporting on issues outside their usual employment duties. The employee’s actions are also protected even if they erroneously believed that the employer was violating the law as long as the belief was a reasonable observation.
  3. The amendment protected employees from the threat of discharge, discharge, suspension, demotion, or adverse action and notifying United States immigration authorities, threatening citizenship, visa or immigration status of an employee or a member of their household.
  4. Section 740 previously only applied if the employee first brought the alleged issue to the attention of the employer, who then would have an opportunity to correct it before issuing an external report. Now the worker merely needs to make a “good faith effort” in bringing the matter to the attention of a supervisor. They are not required to report the matter if:
  • There is an imminent or serious danger to public health and wellbeing, particularly minors.
  • The employee believes reporting the matter would lead to the destruction of evidence or attempts to conceal the matter.
  • The employee believes they risk physical harm in reporting the matter.
  • The employee believes the manager knows about the violation and will not fix it.
  1. There is a new statute of limitations that goes from one year to two years.
  2. Employers will need to notify employees of these changes.
  3. The amendments also expand the number of categories for damages when the employee’s whistleblower is successful. The court can order the employee’s reinstatement or financial damages (including front pay) as an alternative. Conversely, civil penalties to employers will not exceed $10,000. The courts may also award employers legal fees, court costs or disbursements if the claim has no basis of in fact or in law.

New Jersey already has a new amendment

These updates in New York put the state on a shortlist of those with beefed-up protections for employees. New Jersey Conscientious Employee Protection Act already puts our neighbors on that list as well. New Jersey saw an uptick in claims once that amendment went into effect, so expect the same here in New York.