Harassment and Discrimination at Small and Family-Owned Businesses in New York

There is no small-employer exemption from the New York State Human Rights Law (NYSHRL): the statute's definition of "employer" includes all employers within the state.⁠^[1] Size still matters under the other two layers. The New York City Human Rights Law (NYCHRL) generally starts at four persons in the employ, and federal Title VII starts at 15 employees.⁠^[4][6]

This guide is for people who work at, manage or own a small or family-run business. It sets out which laws apply at each size, what changed under the 2019 State amendment, how family members are treated, and which duties apply even to an employer with one worker.

Which laws apply at each employer size?

Law	Layer	Minimum size
New York State Human Rights Law	State	None. All employers within the state.⁠[1]
Labor Law § 201-g (sexual harassment policy and annual training)	State	None. "Every employer."⁠[12]
Labor Law § 740 (whistleblower retaliation)	State	One or more employees.⁠[13]
New York City Human Rights Law, most employment provisions	City	Excludes an employer with fewer than four persons in its employ at all times during the period the law defines.⁠[4]
New York City Human Rights Law, gender-based harassment	City	None. Any employer.⁠[5]
42 U.S.C. § 1981 (race)	Federal	None in the text.⁠[14]
Immigration Reform and Control Act (national origin and citizenship status), as described by the EEOC	Federal	Four or more employees.⁠[15]
Title VII; Americans with Disabilities Act	Federal	15 or more employees.⁠[6][7]
Age Discrimination in Employment Act	Federal	20 or more employees.⁠[8]
Family and Medical Leave Act	Federal	50 or more employees.⁠[16]

For a fuller treatment of coverage, see which employers are covered in New York.

What happened to New York State's four-employee rule?

The State Human Rights Law once applied only to employers with four or more employees. That was the rule before the 2019 amendment. The definition of "employer" then excluded any employer with fewer than four persons in its employ, with an exception for sexual harassment claims, which already reached all employers.⁠^[2]

Chapter 160 of the Laws of 2019 deleted the exclusion. That part of the law took effect on the 180th day after the act was signed on August 12, 2019, and applies to claims accruing on or after its effective date.⁠^[2][17][18] A dissenting opinion in the Court of Appeals recites the date as February 8, 2020.⁠^[3] Since then the definition has read simply: "The term 'employer' shall include all employers within the state."⁠^[1]

The practical result is that a two-person shop anywhere in New York State is an "employer" under the State law, including under its harassment provision, which applies to every listed characteristic.⁠^[1][19] Fifteen is the federal Title VII number, not a State number.⁠^[6] The guide to recent changes in New York discrimination law puts this amendment in date order with the others.

How does New York City's four-person rule work?

For most of its employment provisions, the City law's definition of "employer" does not include an employer that had fewer than four persons in its employ at all times during a period that begins twelve months before the start of the discriminatory practice and runs through its end.⁠^[4] The count has three features:

• Independent contractors count. Natural persons working as independent contractors in furtherance of the employer's business enterprise are counted as persons in the employ.⁠^[20]
• Family members count. The employer's parent, spouse, domestic partner or child, if employed by the employer, are included.⁠^[21]
• The count looks back in time. The exclusion applies only to an employer that stayed below four "at all times" in the period, which opens twelve months before the conduct began.⁠^[4]

The City law also has exceptions that reach employers below four. A claim of gender-based harassment can be brought against any employer, including one with fewer than four persons in its employ.⁠^[5] A person who employs one or more domestic workers is covered by the City law's employee protections regardless of how many other employees that person has, with certain subdivisions carved out.⁠^[22] The overview of the City Human Rights Law explains the rest of its reach.

How does federal law count to 15?

Title VII covers an employer only if it has 15 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year.⁠^[6] The ADA's employment title uses the same test.⁠^[7]

The U.S. Supreme Court has explained that the question is whether the employer had employment relationships with 15 or more individuals on each working day of 20 or more weeks; a worker counts for each working day between arrival and departure.⁠^[23] The EEOC says some part-time workers can be counted, and that independent contractors are not covered by the laws it enforces.⁠^[24] The Supreme Court has also held that the 15-employee threshold is an element of the plaintiff's Title VII claim, not a limit on the court's jurisdiction.⁠^[25]

Two federal statutes can reach smaller employers. Section 1981, which concerns race discrimination in contracts, has no employee-count threshold in its text.⁠^[14] The EEOC states that the Equal Pay Act covers virtually all employers.⁠^[26]

What about family members who work in the business?

Both New York statutes carve out the owner's closest relatives, in slightly different words.

Layer	Who is excluded
New York State	"Employee" does not include any individual employed by his or her parents, spouse, or child.⁠[27]
New York City	The employment discrimination subdivision does not govern the employment by an employer of the employer's parents, spouse, domestic partner, or children; those family members still count toward the four-person threshold.⁠[21]

Under the State law, those relatives are the only individuals the definition of "employee" excludes.⁠^[27] A cousin, an in-law or an unrelated employee of a family business is not within that exclusion's words.⁠^[27]

Household employers are a related case. Domestic workers are "employees" under the State Human Rights Law: Chapter 830 of the Laws of 2021, which took effect immediately, deleted the former domestic-service exclusion and repealed § 296-b, and the Division of Human Rights gives December 31, 2021, as the date it was signed.⁠^[28] The guide to sexual harassment in restaurants, retail and domestic work covers those workplaces.

Which duties apply to every employer, even the smallest?

• A written sexual harassment prevention policy. Under New York State Labor Law § 201-g, every employer must adopt the State's model policy or one that equals or exceeds its minimum standards, and give it to all employees in writing.⁠^[29] The State confirms that this includes households employing one person as a nanny or housekeeper.⁠^[12]
• Annual training. Under the same State statute, every employer must provide sexual harassment prevention training to all employees every year.⁠^[30]
• The Division's notice. State regulations call for every employer subject to the Human Rights Law to post the notices furnished by the Division of Human Rights where employees and applicants can see them.⁠^[31]
• In New York City, a poster and a fact sheet. Every employer must display the NYC Commission on Human Rights' anti-sexual harassment rights and responsibilities poster in English and Spanish, and must give new employees the Commission's information sheet at hire.⁠^[32][33]
• In New York City, training at 15. The City's own annual interactive training requirement applies to employers with 15 or more employees.⁠^[34] The Commission says independent contractors count toward the 15.⁠^[35]

The guides to policy and training requirements and to the duties of managers and small employers go through each item.

Does the size of the business change what can be awarded?

Under federal law it does. The combined total of compensatory and punitive damages under Title VII is capped per plaintiff by employer size.⁠^[9]

Employer size (federal count)	Federal cap on compensatory plus punitive damages
15 to 100 employees	$50,000⁠[9]
101 to 200 employees	$100,000⁠[9]
201 to 500 employees	$200,000⁠[9]
More than 500 employees	$300,000⁠[9]

Back pay and interest on back pay are not part of the capped amount.⁠^[36] A cap is a ceiling, not a typical result. The guide to the federal caps explains what they cover.

The State and City statutes are written differently. The NYSHRL section on remedies states no dollar limit on compensatory damages, and punitive damages against private employers in employment cases were added by a 2019 amendment whose effective date the Appellate Division, Second Department, has given as October 11, 2019.⁠^[10][37][38] The City law's court remedy section sets no cap and does not scale damages to employer size.⁠^[11]

One State provision does turn on size. Where the Division of Human Rights assesses a civil fine in an employment case against an employer with fewer than fifty employees, the fine may be paid in reasonable installments with interest, over no more than three years.⁠^[39] Those fines can be up to $50,000, or up to $100,000 for a willful, wanton or malicious act, and are paid to the State rather than to the complainant.⁠^[40]

Who is responsible when the harasser is the owner?

In a small business the person accused may be the owner or the only manager, and there may be no separate HR function to report to. The three layers treat responsibility differently.

• Federal. In the Second Circuit, individuals with supervisory control may not be held personally liable under Title VII.⁠^[41]
• New York State. The Court of Appeals has said the State law does not make employees liable as individual "employers".⁠^[42] Separately, the statute makes it an unlawful discriminatory practice for any person to aid, abet, incite, compel or coerce a forbidden act.⁠^[43] For harassment claims, the fact that the worker did not complain to the employer is not determinative of whether the employer is liable.⁠^[19]
• New York City. Under the City law, an employer is liable for conduct of an employee or agent that violates subdivision 1 or 2 of § 8-107 where that person exercised managerial or supervisory responsibility.⁠^[44] Individuals may be liable for their own discriminatory conduct, for aiding and abetting, and for retaliation.⁠^[45]

See whether you can sue your boss personally and employer liability for supervisors and coworkers for the details, and how to report harassment or discrimination for options when there is no HR department.

Practical points

If you work for a small employer, it helps to know roughly how many people worked there over the past year, including part-timers, contractors and the owner's relatives, because the City and federal counts turn on those details.⁠^{[4][20][21][23]} Write down dates, what happened and who saw it. If you own or manage a small business, the absence of an HR department does not change which laws apply; a short written policy, a named person to receive complaints and a record of what was done about each one are the basics.