United States: Just When Employers Got Used To Earned Sick Time Act, NYC Publishes Final Amended Sick Time Rules With Additional Requirements

That's right. Just when many employers started getting used to New York City's Earned Sick Time Act ("ESTA"), New York City went ahead and adopted the final amended Earned Sick Time Act Rules ("Final Amended ESTA Rules"). The Final Amended ESTA Rules are effective March 4, 2016, and attempt to clarify parts of ESTA (which we previously wrote about here and here), and set forth additional requirements to implement it. Among other things, these rules:

• Provide additional guidance on calculating the number of employees in a business

Business size for an employer that has operated for at least one year is now determined by counting the number of employees working for the employer per week at the time the employee uses sick time, unless the number of employees fluctuates, in which case business size may be determined for the current calendar year based on the average number of employees per week during the previous calendar year.

• Address situations where employees are employed by a joint employer

If an employee is employed jointly by two or more employers, all of the employee's work for each of the joint employers will now be considered as a single employment for purposes of accrual and use of sick time under ESTA.

• Define "temporary help firm" and define when temporary help firms are legally responsible for violations

Where a temporary help firm places a temporary employee in an organization, the temporary help firm will now be solely responsible for compliance with all of the provisions of ESTA for that temporary employee.

• Allow an employer to set the minimum number of hours and time frame for the use of sick time

Expanding an employer's right to set a minimum daily increment of up to four hours for using sick time by now permitting employers to also set "fixed periods of thirty minutes or any smaller amount of time for the use of accrued sick time beyond the minimum increment," and "require fixed start times for such intervals." For example, an employer's sick time policy requires a four-hour minimum increment of sick time used per day, and states that employees must use sick time in half-hour intervals that start on the hour or half-hour. An employee is scheduled to work from 8:00 am to 4:00 pm, and wants to use her sick time for a morning doctor's appointment and then return to work the same day. If the employee arrives to work at 12:17 pm, the employer can require the employee to use four and a half hours of her accrued sick time and require her to begin work at 12:30 pm. Similarly, if the employee wanted to leave work at 8:40 am to go to her 9:00 am doctor's appointment, the employer could require the employee to stop work at 8:30 am.

• Clear up employee notification of use of sick time

Procedures for employees to give notice of the need to use sick time when the need is not foreseeable may not include any requirement that an employee appear in person at a worksite or deliver any document to the employer prior to using sick time.

• Clarify rate of pay of paid sick time

Employers are not required to pay cash in lieu of supplements for sick time used if remuneration for employment includes supplements. For purposes of ESTA,supplementsmay include, but are not limited to, health, welfare, non-occupational disability, retirement, vacation benefits, holiday pay life insurance, and apprenticeship training.

• Address written sick time policies and what an employer must include in them

Every employer must now distribute or post a written sick time policy and follow its written sick time policy in practice. A written sick time policy must meet or exceed all of the requirements of ESTA, and must state: (1) the employer's method for calculating paid sick time; (2) specifics regarding the use of sick time, including any limitations or conditions the employer places on the use of sick time; and (3) how the employer carries over unused sick time at year-end. Employers cannot substitute the new written sick time policy requirement with distributing the Notice of Rights.

• Clarify what records employers must keep

Clarifying ESTA's three-year record-keeping requirement, the Final Amended ESTA Rules add certain records that must be maintained, including: (1) the employee's name, address, phone number, date(s) of start of employment, date(s) of end of employment, rate of pay, and whether the employee is exempt from the overtime requirements of New York's labor laws; (2) the hours worked each week by the employee, unless the employee is exempt from overtime and has a regular workweek of 40 hours or more; (3) the date and time of each instance of sick time used by the employee and the amount paid for each instance; (4) any change in the material terms of employment specific to the employee; and (5) the date that the Notice of Rights was provided to the employee and proof that the Notice of Rights was received by the employee.

On the same note, the Final Amended ESTA Rules also make clear that an employer's failure to maintain, retain, or produce the above records, if relevant to a material fact alleged by the Department of Consumer Affairs ("DCA") (the agency currently enforcing ESTA) in a notice of hearing issued under ESTA or the Final Amended ESTA Rules, creates a reasonable inference that such fact is true.

• Clarifies penalties under ESTA

An employer's failure to respond to a complaint or provide information requested by the DCA in a notice of hearing will now be subject to a $500 penalty in addition to penalties for other violations. Moreover, a finding by the DCA that an employer has a policy or practice of not providing or refusing to allow the use of sick time as required by ESTA constitutes a violation of ESTA for each and every employee affected by the policy. You understood correctly – penalties will be imposed on a per employee basis!

• Establish relief to an employee if an employer's policy or practice is to not allow an employee to accrue and/or use sick time

If an employer, as a matter of policy or practice, does not allow accrual of sick time as required under ESTA, the relief granted to each and every employee affected by the policy or practice must now include application of 40 hours of sick time to the employee's sick time balance (or application of the number of hours of sick time the employee should have accrued to the employee's sick time balance, provided that such balance does not exceed 80 hours).

• Address the calculation of accruals and hours worked for certain employees

If an employee is scheduled and available to work for an on-call shift and is compensated for the scheduled time regardless of whether the employee works, the scheduled time constitutes hours worked for the purposes of accrual under ESTA. For employees who are paid on a piecework or commission basis, accrual of sick time is measured by the actual length of time spent performing work. For employees with indeterminate shift lengths, the hours of sick time used must be based on the hours worked by the replacement employee for the same shift (if not possible, sick time must be based on the hours worked by the employee when the employee most recently worked the same shift in the past). Finally, if an employee is rehired within six months of separation from employment but had not, at the time of separation from employment, reached the required 120 days to begin using accrued sick time, upon resumption of employment the employee must be credited at least his or her previous calendar days toward the 120-day waiting period.

• Clarify that an employer may take disciplinary action against an employee who engages in an abuse of paid time

If an employee improperly uses sick leave, employers are allowed to take disciplinary action, up to and including termination. Indications of abuse include patterns of: (1) "use of unscheduled sick time on or adjacent to weekends, regularly scheduled days off, holidays, vacation or payday," (2) "taking scheduled sick time on days when other leave has been denied," and (3) "taking sick time on days when the employee is scheduled to work a shift or perform duties perceived as undesirable."

• Define the term "adverse employment action" as used in the definition of retaliation against an employee

Employers are prohibited from taking any action that is reasonably likely to deter an employee from exercising rights guaranteed under ESTA.

• Clarify the DCA's burden of proof for retaliation cases

The DCA may establish a causal connection between an employee's exercise of rights guaranteed under ESTA and an employer's adverse employment action indirectly, such as with evidence that the protected activity was followed closely by the adverse employment action, or directly, with evidence of retaliatory animus directed toward an employee by an employer. Retaliation is established when the DCA shows that a protected activity was a motivating factor for an adverse employment action, even when other factors also motivated the adverse employment action.

As we have previously encouraged, employers are urged to take steps to ensure their compliance with ESTA, and now with the Final Amended ESTA Rules. Employers should, therefore, carefully evaluate whether these changes affect their current sick leave policies and practices, and whether those policies/practices need to be modified.

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.