United States: This Is No April Fool’s Day Joke: Tuesday, April 1, 2014 Is The Deadline For Employers To Comply With The New York City Earned Sick Time Act; Meanwhile, The Department Of Consumer Affairs Releases Form Notice And Additional Guidance

Last Updated: March 26 2014
Article by Michael S. Arnold

Have you taken the steps necessary to comply with NYC's paid sick leave law yet? If not, what are you waiting for? The Act goes into effect on Tuesday, April 1, 2014. We've covered the law's many requirements in various prior posts. For today, let's talk a little bit about what we've been hearing on the street as the deadline approaches.

1. Is this for real? The economy is bad enough and it will only make things worse right?

Response: it's unclear. Some argue that this law will inflict additional pain on an already hurting economy, including on the City's many small businesses, which will now face additional payroll expenses and burdensome recordkeeping requirements. They also argue that it subjects employers to "gotcha" fines and incentivizes them to pay employees off-the-books or fire them. Others say that these concerns are largely overblown, and besides, the benefits outweigh the costs, as employees will become more financially sound and the law will stem the spread of illness in the workplace and in schools. They also argue that the law will result in increased not decreased productivity and that similar laws have been largely successful in other cities like San Francisco. In other words, the jury is still out and we will have to analyze the law's impact over time.

2. We already provide paid sick leave to our employees, so we don't need to worry about this new law right?

Response: [note, before responding, take a deep breath and cue up a polite smile:] I think it's great that you provide paid sick leave to your employees. In fact, many NYC employers already do. But we can't pick which laws we follow and which laws we don't follow. The Earned Sick Time Act has very specific requirements addressing sick leave eligibility, accrual, forfeiture, and request processing, among other requirements. So your generosity, while commendable, may not be good enough; your generosity must be administered in a statutorily-acceptable way. In short: have your counsel review your existing policy, and if necessary bring it into compliance with the law.

3. Is the notice requirement the same thing as the Wage Theft Act's notice requirement?

Response: No, but I can see why you'd think that. The Wage Theft Act is a State law. This is a law applicable to City employers only. But the City notice requirement steals from the Wage Theft Act (pun intended). Like the Wage Theft Act, the Earned Sick Time Act requires (i) employers to provide employees with a notice of their rights, (ii) the notice must be written in English and, in some cases, also in the employee's primary language; and (iii) the City to create template notices for employers to download. But that is where the similarities end. The City law does not have an annual notice distribution requirement like the Wage Theft Act; instead, you must distribute it to your existing employees by May 1, 2014, and to all post-April 1 new hires immediately. Further, the City law limits notice distribution failures to a $50 per employee fine, while the Wage Theft Act imposes a $50 fine per week, up to a maximum $2,500 fine per employee – a sizeable difference.

4. The City Department of Consumer Affairs Still Hasn't Issued a Form Notice Right?

Response: I'll take "Things That Are No Longer True" for $200 Alex. The DCA has finally gotten around to publishing a form notice, which you can download here. Only English versions of the notice are currently available, but the DCA expects to release additional notices translated into other languages soon.

The DCA has also published two fact sheets entitled "Paid Sick Leave: What Employers Need to Know," and "Paid Sick Leave: What Employees Need to Know" that provide certain useful information to employers and employees. But the real draw here is the Frequently Asked Questions document that DCA has also made available. This document provides extensive guidance to employers trying to understand their obligations under the law. It's not perfect, but at least it's a start.

5. Is this law going to result in a new wave of costly lawsuits?

Response: A small bit of good news here. Employees cannot sue you to enforce their rights under this law. They can only file a complaint with the Department of Consumer Affairs. The DCA also has the power to initiate investigations on its own.

6. I am a City employer, but I have employees working elsewhere – do they get paid sick leave too?

Response: Possibly. The law covers an employee as long as he or she works at least 80 hours in the City. But even if the employee meets this threshold and accrues leave, he or she can only use that leave when the employee is working in the City. If they telecommute outside the City, they do not accrue and cannot utilize leave. And let's flip it around a bit: if the employee telecommutes into the City, but the employer is located outside the City, the employee will still be covered by the law.

7. I'm convinced that some of my employees regularly lie about being sick to get out of work. What can I do to stop this?

Response: I'm with you on that one. The law limits your ability to obtain a doctor's note unless the employee is absent for three or more days, and that doctor's note cannot specify the medical reason for the sick leave (unless another law permits this disclosure). However, you can institute a policy requiring the employee to notify you at least 7 days in advance of a foreseeable absence, and you can deny sick leave to an employee who does not provide adequate notice under this policy. For unforeseeable uses of leave, you can require the employee to provide you with a written verification that they used sick leave for legitimate purposes, and nothing prevents you from taking the appropriate disciplinary action should you discover that your employee lied about the reason he or she did not show up for work that day. Of course, as most employers know, this is easier said than done for various reasons that I won't go into. Perhaps this is why some employers are no longer providing (or are at least reconsidering providing) separate leaves for sick days and vacation days (and other types of leave), preferring instead to convert them into a one size fits all Paid Time Off or PTO policy. If you go that route however, you still have to make sure that your PTO policy complies with the law's minimal requirements (e.g. it provides for the accrual of at leaset 40 hours of PTO).

8. Please help me figure out this carryover requirement?

Response: Sure. It's a bit confusing. In a nutshell, the law bans "use it or lose it" policies, but not really. The law mandates the carryover of accrued but unused sick leave from year to year. At the same time however, employers can limit this rule's impact in two ways. First, they can cap the total amount of sick leave at 40 hours per year despite the existence of the carried over amounts. Or second, employers can require the employee to forfeit his or her accrued but unused leave, but if they do that, they must pay the employee for that leave and they must provide at least 40 hours of new leave to the employee from day 1 of the new calendar year. In either case, you should probably revisit your existing policy on this issue.

9. I usually require my employees to use leave in chunks of time. Can I still do that?

While the law provides for an hourly accrual (1 hour for every 30 hours worked), this does not prevent you from setting minimum leave usage increments. For example, you can require employees to utilize up to 4 hours of sick leave at once. Setting higher minimum increments may help ease some of the administrative burden and lower the number of employee absences associated with this law.

10. Seriously, is this law an April Fool's Day joke?

Response: Sorry, it's not. But here are my two favorite April Fool's Day jokes: Taco Bell's announcement that it was buying and renaming the Liberty Bell as the Taco Liberty Bell, and Burger King's announcement that it was creating a left-handed Whopper. We look forward to seeing this year's best April Fool's Day joke. And in the meantime, we'll keep you posted on any further developments about paid sick leave law.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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