NYC Bill Seeks to Make It Harder for Businesses to Fire Workers

Workers at a restaurant wear masks in lower Manhattan on the day that a mask mandate went into effect in New York City on Dec. 13, 2021. (Spencer Platt/Getty Images)

A New York councilwoman has proposed a new law that would make it harder for all city employers to fire workers, requiring that they have a good reason to do so.

City council member Tiffany Cabán, a Democrat, introduced the bill, which she said would “establish protections against unfair and arbitrary firings for every worker in NYC,” on Dec. 7.

Dubbed the “Secure Jobs Act,” the bill would ensure that workers are provided with 14 days’ notice and a written explanation as to why they are being terminated, while the employer must have a satisfactory reason to do so, according to Cabán.

It would also ban the use of electronic monitoring in discipline and discharge decisions, ensure that a “progressive discipline system” is in place to provide employees with the chance to receive feedback and improve their work performance before they’re fired, and require employers to provide proof of economic hardship before laying workers off.

On Twitter, Cabán said the bill would guarantee that employees are given “advance notice, a good reason, and a fair process before a potential discharge.”

“The onus is on the employer to prove they have a good reason to fire an employee. And workers who are wrongfully terminated can get reinstated,” the councilwoman said.

‘Discriminatory Firings Are Rampant’

“I’ve met New Yorkers who have endured horrific abuse at work and stayed silent because they’re afraid of getting fired,” Cabán wrote. “Under the current system, supposedly illegal discriminatory firings are rampant. Workers are getting a raw deal under the status quo.”

The bill would also require companies to fill every new or open position with workers who were fired from their jobs for economic reasons, beginning with the laid-off employees who have the greatest seniority, the New York Post reported.

It also provides generous terms for severance pay, according to the Post. Bloomberg reported that the bill would also allow the city comptroller to bring cases on behalf of workers who have been fired, even in cases in which they had signed “forced arbitration” clauses giving up their rights to file such a lawsuit.

The bill comes at a time of soaring inflation across the country that has left businesses struggling ahead of what’s widely expected to be a recession.

Last month, S&P Global analysts said the rate of corporate defaults for U.S. companies could soar even if the economy tips into a “shallow recession.”

According to S&P Global Ratings, the default rate for U.S. companies could reach 3.75 percent by September 2023 if the Federal Reserve’s approach to taming inflation through raising interest rates prompts a mild economic downturn.

Bill Could Prove Bad for Businesses

However, analysts warned that in the worse case, default rates could reach 6 percent, the highest since March 2021.

Kathryn Wylde, president of the Partnership for New York City, a nonprofit business advocacy group, said the new bill could wreak havoc with New York’s economy and discourage businesses from setting up in the Big Apple.

“Putting the recession aside, this would be the last straw for many employers. It is essentially the end of ‘at will’ employment,” Wylde told the Post. “I cannot imagine that the sensible leaders of the council will allow this proposal to move.”

However, Cabán said the bill is needed instead of the standard “at will” employment under which companies are legally allowed to terminate workers for any reason and without warning, pointing to the current cost of living crisis and employment insecurity.

“How can families feel economically safe and secure and build futures here in the city when they don’t know whether they’ll be fired on a whim tomorrow?” Cabán told Bloomberg. ”If you talk to everyday people, it seems like the most commonsense thing: ‘Well, yeah, my boss should give me a valid reason before terminating my employment.’”