New York, N.Y. (October 19, 2020) - On April 3, 2020, New York
State enacted a new paid sick leave law as part of a comprehensive
budget bill. New York employers are required to start accruing paid
or unpaid sick leave (depending on employer size) as of September
30, 2020, with the accrued leave being available for use beginning
on January 1, 2021. A summary of the New York State Sick Leave Law
(NYSSLL) is set forth in our prior client alert. As this newly-enacted
law did not replace or diminish city or county paid sick leave
laws, it presented certain compliance challenges for New York
employers with employees located in New York City or Westchester
County, which have their own paid safe and sick leave
To address some of these compliance issues, New York City recently passed amendments to the Earned Safe and Sick Time Act (ESSTA). These amendments became effective on September 30, 2020, and generally align the ESSTA accruals with the NYSSLL. Notably, however, the ESSTA amendments also impose additional requirements on employers and expand the enforcement mechanisms available to address violations. Accordingly, New York City employers will need to take immediate action to update their policies and practices to address these changes. A summary of the key ESSTA amendments is set forth below.
Changes That Align ESSTA With NYSSLL
Previously, New York City employers with five or more employees who worked in New York City for 80 or more hours in a calendar year were required to provide up to 40 hours of paid safe and sick time (or up to 40 hours of unpaid leave for employers with fewer than five employees). The ESSTA amendments now provide for safe/sick time accruals that align with the NYSSLL as follows:
- For employers with four employees or less and employer net income of $1 million or less in the prior tax year, up to 40 hours of unpaid safe/sick time per year must be provided.
- For employers with four employees or less and employer net income greater than $1 million in the prior tax year, up to 40 hours of paid safe/sick time per year must be provided (this is a new requirement).
- For employers with five to ninety-nine employees, up to 40 hours of paid safe/sick time per year must be provided.
- For employers with 100 or more employers, up to 56 hours of paid safe/sick time per year must be provided (this is an increase from prior cap of 40 hours).
Elimination of Waiting Period and Eligibility Requirement
The ESSTA originally allowed employers to delay use of accrued or front-loaded safe/sick time until a new employee completed 120 days of employment. Under the NYSSLL, once leave rights begin on January 1, 2021, employees can use safe/sick leave as it accrues without any waiting period. For consistency, the ESSTA amendments also eliminate the 120-day waiting period for new hires. For small employers with new safe/sick time obligations (employers with four or fewer employees and a net income of more than $1 million), this change is delayed until January 1, 2021. Additionally, large employers with 100 or more employees do not need to permit use of safe/sick time beyond 40 hours until January 1, 2021. The ESSTA amendments also eliminated the requirement that an employee work more than 80 hours in New York City in a calendar year to be eligible for safe/sick time.
In addition to the changes to make ESSTA more consistent with the NYSSLL, the ESSTA amendments impose new requirements on employers and adopt enhanced enforcement mechanisms as set forth below.
Reimbursement of Expenses for Documentation
Under the ESSTA, for absences of more than three consecutive days, an employer may require the employee to submit reasonable documentation showing that the use of safe/sick time was for an authorized purpose. The ESSTA amendments added a new, potentially onerous reimbursement requirement related to this documentation. Employers must now reimburse employees for any fee charged by a healthcare provider for documentation related to sick leave and for all reasonable costs or expenses incurred for obtaining documentation related to safe leave.
Accrual and Use Reporting on Pay Statements or Other Written Documentation
Employers must provide the amount of safe/sick time accrued and used during a pay period as well as the employee's total balance of accrued safe/sick time on a pay statement or other form of written documentation provided to the employee each pay period. The New York City Department of Consumer and Worker Protection (DCWP) advises that enforcement of this provision will not begin until November 30, 2020, provided employers are "working in good faith on implementation." Based on this new requirement, employers must work promptly with their payroll companies to amend their pay statements or establish other written documentation that will comply with this requirement. Although the NYSSLL does not have a pay statement requirement, employers must, upon an employee's oral or written request, provide employees with a written summary of the amount of sick leave accrued and used in the current or any previous calendar year.
Written Notice of Employee Rights
Upon commencement of employment, employers must provide employees with written notice of their rights to safe/sick time. The written notice must include: (i) the accrual and use of safe/sick time; (ii) the "calendar year" of the employer (defined as a regular and consecutive 12-month period as determined by the employer); (iii) the right to be free from retaliation; and (iv) the right to file a complaint with the DCWP. In addition to this written notice, the ESSTA amendments now require employers to conspicuously post this information in the workplace and provide an updated notice to existing employees by October 30, 2020. As of publication of this alert, DCWP has not published an updated notice of rights on their website. It is anticipated DCWP will do so.
Expanded Definition of Adverse Action
The ESSTA prohibits retaliation against employees for exercising their rights under the ESSTA. The amendments expand the definition of "adverse action" to include any adverse action that penalizes an employee for, or is reasonably likely to deter an employee from, exercising, or attempting to exercise, their rights. It also includes specific examples of retaliatory conduct. The ESSTA amendments clarify that an employee need not refer to a provision of the ESSTA in order to be protected from adverse action. The protections also apply to any person who mistakenly, but in good faith, asserts their rights under, or alleges a violation of, the ESSTA. Notably, a violation of the retaliation provisions can be established when a protected activity was a motivating factor for an adverse action, whether or not other factors motivated the adverse action.
Enforcement and Penalties
Although there is still no private right of action, the ESSTA amendments now empower the New York City Corporation Counsel to open an investigation upon receipt of a complaint or on its own initiative and may initiate civil actions against employers for non-compliance (or may designate other persons to do so on DCWP's behalf). In addition to increasing certain penalties, the ESSTA amendments also clarified that penalties can be imposed on a per employee basis.
Action Items for Employers
Employers with New York State and New York City employees will need to act quickly to update their policies and practices to comply with the state and city requirements. Some of the immediate action items include:
- Adjust accrual, use, and carry-over requirements, if applicable, and remove any waiting periods for new employees;
- Consult payroll companies or PEOs to determine whether pay statements can be amended to include the accrual, use, and total balances of safe/sick time or develop other written documentation that complies with the reporting requirements by November 30, 2020;
- Update written notice and/or employee handbook policies to address the changes and new requirements. Provide the updated notice to new employees upon commencement of employment and to all existing employees by October 30, 2020;
- Review and revise administrative procedures to reimburse employees for required documentation;
- Monitor the DCWP website and post an updated Notice of Employee Rights in a conspicuous location (this should be emailed to employees who work remotely) in the form provided by DCWP;
- Continue to monitor developments associated with the NYSSLL. To date, the New York State Department of Labor (NY DOL) has not issued regulations that clarify certain open questions, including whether the employee threshold for accruals is based on an employer's total number of employees or those located in New York State, whether there are affirmative written notice and posting requirements, and whether there will be specific enforcement mechanisms. Guidance from the NY DOL may require additional updates to employer policies and procedures.
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.