If Pain, Yes Gain—Part 92: New York City Publishes Updated Earned Safe and Sick Time FAQs

Seyfarth Synopsis: Last week, the New York City Department of Consumer and Worker Protection published an updated set of Frequently Asked Questions (“FAQs”) related to the recently amended New York City Earned Safe and Sick Time Act (“ESSTA”).  While non-binding, the updated FAQs provide employers with certain insights into their compliance obligations following the City’s amendments to ESSTA that went into effect on September 30, 2020. Unfortunately, despite the updated guidance, certain open ESSTA questions remain.

2020 continues to be an active year for paid sick leave in New York City, and more broadly, across the state. The biggest developments occurred on September 30 when the New York City Council’s amendments to the City’s existing ESSTA took effect.  The amendments were largely adopted to align ESSTA with the New York State Paid Sick Leave (“NYPSL”) Law, which also took effect on September 30.[1]

Then, on October 27, the New York City Department of Consumer and Worker Protection (the “Department”) published the English version of the updated ESSTA model Safe and Sick Leave Notice. Our Legal Update on this development and ESSTA’s notice and posting requirements more generally is available here.

In the last week, the Department has released additional administrative materials and guidance on the ESSTA amendments. First, the Department published the Spanish version of the updated ESSTA model Safe and Sick Leave Notice. Second, the Department published an updated set of FAQs. The FAQs do not address certain gray areas in the amended ESSTA, some of which we point out below; however, they do provide information on several important topics. Here are some highlights:

• Interplay with NYPSL: In terms of the interplay between ESSTA and the NYPSL Law, the updated FAQs state that ESSTA “must remain as good as or better than” the NYPSL Law. Further, the updated FAQs point out that ESSTA “specifically provides that any future standards in the State Law that surpass those in the City Law will be automatically adopted and incorporated in the City Law.”
• Determining Employer Size: As summarized at the end of this Legal Update, the annual amount of earned safe and sick leave accrual and usage depends on employer size. However, it is unclear under the amended ESSTA whether employers should count only New York City employees or their total U.S. workforce when determining the applicable accrual and usage caps. The updated FAQs do not explicitly resolve this uncertainty. However, certain FAQs suggest that employers only need to count their New York City workforce when making size determinations under ESSTA. Some of the relevant FAQs state as follows (emphasis added):

Q: If the employer is part of a chain business and/or has multiple locations, which employees count toward the number of employees?

A: If a business has multiple locations and the owner or principal of the multiple locations owns at least 30% of each location and each location is either engaged in the same business or operates under a franchise agreement as defined under New York State law, then the total number of employees should include employees at all locations in New York City as long as the multiple locations collectively employ at least five employees.

Q: Do employees who do not live in New York City count toward the number of employees?

A: Yes. The Law applies to employees employed in New York City. For counting purposes, it does not matter where the employees live.

• Year-End Carryover and Frontloading: As noted above, the updated ESSTA FAQs state that ESSTA will “automatically” adopt and incorporate aspects of the NYPSL Law that are more generous than those under ESSTA. In terms of year-end carryover of earned, unused safe and sick leave, the updated FAQs' “automatically adopt” language strongly suggests that ESSTA will follow the NYPSL Law if it is more generous than ESSTA’s carryover provision.

The NYPSL Law contains no year-end carryover cap for earned, unused sick leave at this time.  The amended ESSTA, and multiple updated FAQs, provide that employers can limit the amount of sick and safe leave an employee can carry over at year-end to 56 or 40 hours, depending on employer size. Despite this apparent divergence, the updated ESSTA FAQs' "automatically adopt" language can be read as confirming that the NYPSL standard, which currently is more generous that the City’s carryover standard, would govern year-end carryover of unused sick and safe leave in the City.

As a reminder, regardless of year-end carryover balances, employees need not be permitted to use more than 40 or 56 hours of safe and sick leave per year, depending on employer size, under both the amended ESSTA and NYPSL Law.

Relatedly and significantly, both the amended ESSTA and NYPSL Law are silent on whether frontloading a sufficient amount of safe and sick leave at the start of each year and upon commencement of employment, i.e., either 56 or 40 hours depending on employer size, eliminates employers’ year-end carryover obligations. However, the updated ESSTA FAQs state that such “use it or lose it” practices are permissible where sufficient frontloads are provided. The specific updated FAQ reads as follows, in relevant part (emphasis added):

An employer is not required to allow employees to carry over safe and sick leave if:

– The employer pays employees for the unused accrued safe and sick leave AND the employer frontloads the maximum of 40 or 56 hours, i.e., provides the employee with the maximum number of hours on the first day of the new Calendar Year. OR

– The employer frontloaded 40 or 56 hours of safe and sick leave at the beginning of the Calendar Year and will frontload 40 or 56 hours of safe and sick leave on the first day of the new Calendar Year.

It is unclear at this time whether NYC employers can take the position that because (a) the NYPSL law is silent on the topic of whether a sufficient frontload permits “use it or lose it” setups, and (b) such a practice is permitted under the updated ESSTA FAQs, they can avoid carrying over unused PSL at year-end.

• Available Balance Notice Requirement: Under the amended ESSTA, employers are required to notify employees of certain safe and sick leave balance information. Specifically, the amended ESSTA provides that (1) safe and sick leave accrued during a pay period, (2) sick and safe leave used during a pay period, and (3) total balance of sick and safe leave must be included on employees’ paystubs or in a separate writing provided each pay period.  The updated FAQs do not provide any additional information on what is considered “a separate writing” under the amended ESSTA, including whether listing and updating the required information on an employer’s company intranet or portal at least each pay period is sufficient.[2]

As a reminder, and as noted in our prior Legal Update, the city’s ESSTA website, which is instructive and non-binding, notes that for this requirement only, 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.

• Posting Requirement: Employers must conspicuously post the written notice of employee’s safe and sick time rights under the amended ESSTA at their place of business in an area accessible to employees. This is a new requirement under the amended ordinance. It remains unclear if posting the updated ESSTA model notice in English is sufficient or if employers also will need to post the notice in other languages. However and notably, while the amended ESSTA seemingly required employers to adhere to this posting requirement as soon as possible after September 30, the updated FAQs state that the updated model notice must be posted by January 1, 2021.
• Employee Discipline: The amended FAQs note that an employer may take disciplinary action, up to and including termination, against an employee who uses safe and sick leave for purposes other than those provided for under ESSTA. Notably, the amended FAQs caveat this guidance by noting that a mistaken use of safe and sick leave does not qualify as misuse and is protected from retaliation.

As a reminder, under the amended ESSTA employers must permit employees to accrue sick and safe leave at a rate of 1 hour for every 30 hours worked, up to (1) 40 hours per year for employers with 99 employees or fewer employees and (2) 56 hours per year for employers with 100 or more employees.  These ESSTA accrual caps conform with the NYPSL Law.  However and as noted above, because of the effect of the NYPSL Law, it is unclear whether an employer can set a year-end carryover cap for leave under ESSTA and the NYPSL Law. As noted above, regardless of carryover balances, employees need not be permitted to use more than 40 or 56 hours of safe and sick leave per year, depending on employer size.[3]

Eligible employees can use ESSTA leave for the following reasons: (1) an employee's mental or physical illness, injury or health condition, need for medical diagnosis, care, or treatment of a mental or physical illness, injury or health condition, or need for preventive medical care; (2) care of a family member with a mental or physical illness, injury or health condition, who needs medical diagnosis, care, or treatment of a mental or physical illness, injury or health condition, or who needs preventive medical care; (3) certain absences from work when the employee or employee’s covered family member has been the victim of domestic violence, a family offense, sexual offense, stalking or human trafficking; and (4) absences due to closure of the employee’s place of business or the employee’s child’s school or childcare provider that has been closed by order of a public official due to a public health emergency. For additional details on ESSTA, see our prior Legal Update. 

New York State and City employers should continue to monitor the State and City sick leave websites for additional guidance on their respective recent sick leave developments, as well as potential regulations.

With the paid leave landscape continuing to expand and grow in complexity, companies should reach out to their Seyfarth contact for solutions and recommendations on addressing compliance with these laws and paid leave requirements more generally. To stay up-to-date on Paid Sick Leave developments, click here to sign up for Seyfarth’s Paid Sick Leave mailing list. Companies interested in Seyfarth’s paid sick leave laws survey should reach out to sickleave@seyfarth.com.

 

[1] Last month, a NYPSL website and set of FAQs were released by the State. Click here for our Legal Update on these developments.

[2] The NYPSL Law does not have a similar paystub available balance notice requirement. However, the NYPSL Law does state that upon the oral or written request of an employee, an employer must provide a summary of the amounts of sick leave accrued and used by such employee in the current calendar year and/or any previous calendar year, and that the employer must provide this information within three business days of the request.

[3] As a reminder, the increased 56-hour annual usage cap under ESSTA does not begin until January 1, 2021. Similarly, employers are not required to allow employees to use their earned NYPSL until January 1, 2021.