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About Employer-Related Obligations for Foreign Agents in NYC and Nationwide

By Douglas Lipsky

New York City is home to the headquarters of the United Nations and the associated diplomatic and  foreign agent offices. While the Foreign Sovereign Immunity Act (FSIA) provides immunity to foreign states and their agencies from any liability arising from their public acts, foreign agents have the same obligations as other employers under applicable employment laws, including paying employees a minimum wage and overtime. 

FSIA and FARA: What’s It All About?

All foreign states and their agents are subject to FSIA, which provides immunity from liability related to their public acts, except for lawsuits based upon: 

  • A commercial activity carried on in the U.S.
  • An act performed in the U.S. in connection with a commercial activity the foreign state conducts elsewhere.
  • An act outside U.S. territory in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the U.S.

This is referred to as the FSIA commercial activity exception. The courts have held that a foreign agent office’s “employment relationships can be commercial in nature,” and, therefore, it can be sued in state court for actions arising from the employment relationship. 

Foreign agents must also register under the federal Foreign Agents Registration Act (“FARA”). While this law does not provide for separate employer-related obligations, foreign agent offices must comply with applicable state employment and labor laws. The employment of chauffeurs, laborers, clerical staff, cleaners, and other workers falls under the “commercial activity” exception. In short, these employees can sue a foreign agent for employment-related claims. 

Other Foreign Agent Employees

Employment relationships with diplomatic service, foreign representatives, or military personnel are considered to be governmental and do not fall under the commercial activity exception.  However, courts look at certain factors in determining whether employment falls under the exception, including:

  • Whether the activity to which the plaintiff’s employment was directed is governmental 
  • Whether the plaintiff’s employment relationship was sufficiently intertwined with that activity to make the employment relationship itself part of the governmental function

Finally, whether an individual is employed on a temporary or permanent basis does not factor into whether the foreign agency is entitled to immunity from lawsuits. Instead, courts focus on the employee’s tasks and duties to determine whether their employment falls under the commercial activity exception. If so, the foreign agent office is not immune from lawsuits arising from this employment relationship. 

The Bottom Line

Foreign states and their agents must comply with all applicable federal, state, and local employment laws. In particular, foreign agents are forbidden from discriminating against job applicants and employees, permitting sexual harassment in the workplace, failing to pay at least the minimum wage, and engaging in other misconduct. The best way for foreign agent offices and their employees to understand their rights and responsibilities is to consult an experienced New York City employment lawyer.

About the Author
Douglas Lipsky is a co-founding partner of Lipsky Lowe LLP. He has extensive experience in all areas of employment law, including discrimination, sexual harassment, hostile work environment, retaliation, wrongful discharge, breach of contract, unpaid overtime, and unpaid tips. He also represents clients in complex wage and hour claims, including collective actions under the federal Fair Labor Standards Act and class actions under the laws of many different states. If you have questions about this article, contact Douglas today.