NYS & NYC Update Sick Leave Guidance
As addressed in our prior client alert, earlier this year, New York State enacted state-wide mandatory sick and safe leave, which employees in New York State began accruing on September 30, 2020. Days before that effective date, NYC also amended its safe and sick leave law to more closely align with the State legislation. Both jurisdictions have recently released guidance and materials, the details of which are discussed below.
New York State Guidance
Last week, New York State released guidance and Frequently Asked Questions about the new state-wide sick leave law. The guidance and FAQs primarily track the text of the sick leave law, but there are some new directives and clarifications:
Employee Threshold
The number of employees a business employs determines how much sick leave its employees are entitled to accrue, with employers of 100 or more employees now required to provide up to 56 hours of paid sick leave per calendar year and employers of 5 to 99 employees required to provide up to 40 hours of paid sick leave per calendar year. Employers with fewer than 5 employees are required to provide 40 hours of unpaid sick leave per calendar year, unless the employer has a net income greater than $1 million in the prior tax year, in which case such leave must be paid.
The FAQs are clear that to determine the number of employees that a business with multiple locations in New York State has, the employer must count the total number of employees across all locations in New York State. For instance, an employer that has one location in NYC with 3 employees and one location in Westchester with 3 employees is considered to have 6 employees for purposes of determining its sick leave obligations. Neither the law nor the guidance specifies whether employers are required to count employees outside of New York State, but given the expansive definition of “employee” in the New York Labor Law, employers may be required to count employees outside of New York State for the purpose of determining their sick leave obligations.
The “calendar year” for the purpose of determining the number of employees means January 1 to December 31. However, employers may set a different calendar year for the purposes of accrual and use of leave.
Accrual
Under the new state law, employees accrue one hour of sick leave for every 30 hours worked. Employers are only required to allow employees to accrue sick time for time worked. The guidance specifies that employees are not required to accrue sick time when they are using paid sick time or for other non-working time, even if that time is paid (e.g., vacation time or subject-to-call time). However, employees must always accrue sick time for time that is considered hours worked under wage and hour laws, including on-call time, training time, and travel time.
Employees begin accruing sick leave upon commencing employment and, beginning January 1, 2021, may use sick leave as it is accrued; there is no waiting period for accrual or use of sick leave. The amendments to the NYC safe and sick time law also removed any waiting period for the accrual or use of sick time, and employers will likely have to amend their sick time policies to reflect this change.
When employees are paid on a non-hourly basis (such as paid on commission or a flat rate basis) accrual of sick leave is determined by the actual length of time spent performing work. The wording of this FAQ is ambiguous as to how it pertains to exempt employees and could suggest a need to track hours of exempt employees under the accrual method. However, elsewhere the FAQs state that “Overtime exempt employees who are paid on an hourly basis are assumed to work 40 hours per workweek, when deriving their regular rate unless the terms and conditions of the employment specify or require otherwise.” As overtime exempt employees generally are paid on a salaried, and not hourly, basis, the intent of the guidance on this point is unclear, though a logical reading of the requirement is that exempt employees are assumed to work 40 hours per week, unless otherwise specified by the employer.
Carryover & Frontloading
The sick leave law states that employers may frontload an employee’s full entitlement to sick and safe leave at the beginning of the calendar year, instead of providing sick leave on an accrual basis, as long as the amount of leave is not reduced or revoked based on the actual time worked by the employee. The guidance further states that if the employer frontloads less than the maximum number of hours the employee can accrue during the year (40 hours for small employers or 56 hours for large employers) based on an estimation of how much the employee will work during the year, the employer must still track the employee’s accrual of sick leave because the employee may work more than anticipated. If the employee works more hours than anticipated, the employer must allow the employee to accrue additional time until the total amount of frontloaded time and accrued time equals the maximum amount of sick leave the employee may accrue in the year. For example, employers can frontload sick time for part-time employees at the beginning of each calendar year based on the number of hours the employee is expected to work that year, but if the frontloaded amount is less than the maximum number of hours they could accrue in the year, the employer must continue to track accruals and provide additional sick leave if the employee works more than expected.
An employer who frontloads fewer than the maximum hours an employee can accrue must allow the employee to carry over up to 40 or 56 hours (depending on the size of the employer) of unused sick leave into the new calendar year, in addition to frontloading the amount of time the employer expects the employee to earn in the next calendar year.
An employee must be permitted to carryover unused sick leave to the next calendar year. However, employers may limit an employee’s annual use of sick leave to the number of hours that the employee is entitled to use in any year (e.g., 56 hours for large employers and 40 hours for small employers). This may result in an employee maintaining a leave balance in excess of the amount they are permitted to use in a calendar year. The guidance is not clear on whether carryover is required where employees receive the maximum amount of leave they are entitled to accrue and use at the beginning of each year. Given that the stated purpose in the FAQs of permitting carryover is to allow an employee to utilize leave right away, an argument can be made that carryover is unnecessary in a frontloading system. However, in other portions of the FAQs, the guidance seems to require carryover of any unused sick leave, without reference to a cap. Therefore, absent further clarification from the State, employers may consider allowing carryover of sick leave for all employees. Since employers are clearly entitled to limit the annual use of sick leave to 40 or 56 hours (depending on the size of the employer) the only effect of permitting carryover for employees who receive frontloaded sick leave is that the employee’s sick leave bank will contain more sick time than they may actually use.
Permitted Uses
Employees may use safe leave for a variety of reasons if the employee or their family member has been a victim of domestic violence, a family or sexual offense, or stalking. The guidance makes clear that an employee can use safe leave even if the police have not been contacted or the perpetrator has not been convicted. An employee’s eligibility for safe leave is not dependent on reporting to law enforcement or a criminal conviction.
Employees may use sick leave when they or a member of their family has an illness, injury, or health condition, or a need for diagnosis or preventative care. The guidance makes clear that employees may use sick leave for routine doctor and dentist appointments.
The sick leave available under the sick leave law is separate from (and provided in addition to) New York State COVID-19 leave available to employees who are subject to a precautionary or mandatory order of quarantine due to COVID-19. However the guidance also seems to state that employees may be able to use sick leave if their employer has been ordered to close during a public health emergency, noting that the question is “fact specific” based on the type of emergency, the risk of contagion, and “other health considerations”.
Rate of Pay
Employees must be paid for sick time at the greater of their regular rate of pay or the applicable minimum wage. If an employee uses sick leave during hours that would have been paid at the overtime rate if worked, the employer does not have to pay such sick time at the overtime rate of pay.
Employees who are paid at more than one rate must be paid for sick leave at the weighted average of those rates. The weighted average is the total regular pay divided by the total hours worked in the week. Overtime exempt employees who are paid on an hourly basis are assumed to work 40 hours per workweek when deriving their regular rate, unless the terms and conditions of employment specify otherwise.
Policies & Notice
Any limitations on the accrual or use of sick leave must be put into writing and either posted or given to employees. For instance, if an employer with over 100 employees elects to limit employee’s sick and safe leave use to 56 hours per calendar year, as permitted by the law, this limitation must be in writing and provided to employees.
There is no specified notice period requirement under the law, which only requires an oral or written request to the employer prior to the use of sick leave. This is in contrast with the NYC requirements, which allow an employer to request seven days’ notice for foreseeable uses of leave.
Notably, the guidance is silent on whether the employer can require an employee who utilizes paid sick leave to provide documentation in support of their absence.
Telecommuting
An employer cannot require an employee to work from home or telecommute instead of taking sick leave. But an employer can offer the employee the options of working from home or telecommuting in lieu of utilizing sick time. If, in response, the employee voluntarily agrees to work from home or telecommute, the employee cannot be required to use sick leave for that period.
Employees who telecommute and typically work out of state are only entitled to accrual, use, and the other protections under the law for the hours when they are physically working in New York State.
Collective Bargaining Agreements
The sick leave law states that Collective Bargaining Agreements (CBAs) entered into on or after September 30, 2020 may provide employees with a “comparable benefit” in the form of paid time off instead of the sick leave required by the law, as long as the CBA also specifically acknowledges the provisions of the law. The guidance fleshes out the mechanics of this further:
First, the guidance states that the NY DOL considers leave time which has fewer restrictions on its use to be comparable to that required by the sick leave law, regardless of what the leave is called (e.g., annual time, vacation time).
In addition, multiple leave benefits which meet the use requirements of the NYS sick time law may be combined to satisfy the requirement that comparable benefits are provided. The NY DOL recommends that the comparable benefit be explicitly identified and labeled as such in the CBA to avoid confusion.
Lastly, any CBA entered into on or after September 30, 2020 that provides comparable leave, instead of sick under the law, must specifically reference Labor Law Section 196-b (the citation for the NYS sick leave law). The reference to the Labor Law should also specifically identify any benefit deemed comparable to the leave required by the NYS sick leave law.
The impact of the law on CBAs existing prior to September 30, 2020 is still not clear. The guidance states that if an employer, including one covered by a CBA, has an existing leave policy that meets or exceeds the accrual, carryover, and use requirements of the law, the law does not present any further obligations on the employer. However, the guidance does not elaborate on the effect of the law on CBAs that existed prior to September 30, 2020 but which contain policies that do not meet the requirements of the new law.
Recordkeeping
New York employers have long been required to keep payroll records for six years, and now those records must also include the amount of sick leave accrued and used by each employee on a weekly basis.
As a reminder, under the amendments to the NYC law, employers in NYC must now include information regarding sick leave accrual, usage, and total balance on employees’ paystubs. Recent guidance from NYC has said that employers that could not operationalize the documentation requirement by September 30, 2020, but are working in good faith on implementation, will have up to November 30, 2020 to ensure compliance without a penalty.
Miscellaneous
The guidance directs employees to contact the NY DOL’s Anti-Retaliation Unit if they believe they have been retaliated against for exercising their rights to sick leave.
The FAQs direct employees to contact the NY DOL to file a complaint if their employer is not providing sick leave as required by the law.
While employees are not entitled to a payout of accrued and unused sick leave upon separation from employment, seasonal employees who maintain an ongoing employment relationship with their employer maintain their leave accruals through such breaks in employment. The FAQs do not provide any details as to how short the break must be to support maintaining accrual.
Employers may have a policy that allows employees to donate unused leave to other employees, as long as the policy is entirely voluntary. However, note that sick leave donation policies will also implicate tax concerns, and employers who wish to institute a sick leave donation policy should consult with counsel.
New York City Updated Notice of Employee Rights
This week, the New York City Department of Consumer Affairs (DCA) released an updated Notice of Employee Rights regarding the recently amended Safe and Sick Time Law. New York City employers have long been required to provide this notice to employees at the commencement of employment in both English and the primary language spoken by the employee.
The amended law somewhat confusingly refers to providing the updated notice to current employees within 30 days of the effective date of the law that established their right to sick time, which would seem to be October 30, 2020. As we mentioned in our prior alert, it was not clear whether the updated notice requirement impacted employees who were receiving expanded leave under the City’s amendments or only employees who were not previously receiving leave at all. Guidance from the DCA seems to indicate that an updated notice does not need to be provided by employers with fewer than 100 employees, presumably because the sick time entitlement for their employees has not changed. However, this guidance seems to ignore employers of four or fewer employees with more than $1 million in net income, who are now entitled to paid leave. The guidance further notes that the DCA has extended the deadline for employers with 100 or more employees and employers of domestic workers to provide the updated notice until January 1, 2021.
However, all employers are reminded that under the amendments to the law, the notice must also be conspicuously posted at an employer’s place of business in an area accessible to employees. Given that many employees are working remotely, and will not have access to an employer’s place of business, employers may consider providing the updated notice to their employees via email.
Employers should review and revise their sick and safe leave policies for compliance with the new guidance, and the recently enacted amendments to the NYC Earned Sick and Safe Time Act. Employers should also prepare for circulation of the updated NYC Notice of Employee Rights. If you have any questions regarding compliance with the new guidance or require assistance amending your policies, please contact Amanda M. Baker at abaker@fglawllc.com, or any attorney at the Firm.
DISCLAIMER: This alert is provided to clients and friends of the firm for informational purposes only and the distribution of this alert is not intended to, and does not, establish an attorney-client relationship. This alert also does not provide or offer legal advice or opinions on any specific factual situations or matters. This communication may be considered Attorney Advertising. Prior results do not guarantee a similar outcome