If Pain, Yes Gain—Part 83: Second Statewide Paid Sick Leave Mandate Coming to New York

Seyfarth Synopsis: Expanding beyond COVID-19, New York State has enacted statewide paid sick leave. The bill mandates sick leave for employers of all sizes, and goes into effect 180 days after enactment. This bill was previously part of an agreement between the Governor and State Legislature to provide sick leave in response to COVID-19, but was instead passed as part of the State budget.  

On April 2, 2020, Governor Andrew M. Cuomo announced that the state budget includes a mandatory paid sick leave program. The State Legislature passed the budget immediately thereafter. Once signed, the legislation will take effect 180 days later. Notably, while it looks like covered employers will have to allow employees to begin accruing sick leave sometime in 2020, they would be allowed to restrict use of such accrued time until 2021. Based upon Governor Cuomo’s announcement, the bill is expected to become law very soon.

Once the bill is signed by Governor Cuomo, New York will become the 14th state with mandatory paid sick leave[2]. New York passed a COVID-19 sick leave mandate on March 18. See Part IV, Part V and Part VII of our “Paid Leave and Coronavirus” series for more information on the New York COVID-19 paid sick leave law.

There are currently several forms of state and local paid leave available to New York employees. Existing paid leave benefits include the statewide Paid Family Leave Law, Disability Benefits Law, and Workers’ Compensation Law. In addition, New York City and Westchester County currently enforce local paid sick and safe time mandates. Information on the interplay of the bill and these existing state and local laws is addressed below, although further information likely will be released in the coming months.

Here is a synopsis of the State’s new mandatory sick leave components.

Here are some of the highlights:

• Effective Date: The law will be effective 180 days after enactment. This would be approximately late September to early October 2020 if the bill is signed in the next few days.
• Definition of Employer: Because the law adds NYLL Section 196-b, the definition of “employer” from NYLL Section 190 would apply.  Under Section 190, “employer” includes any person, corporation, limited liability company, or association employing any individual in any occupation, industry, trade, business or service, and does not include government agencies.
• Definition of Employee: Under NYLL Section 190, “employee” is broadly defined and means any person employed for hire by an employer in any employment.
• Accrual: Employees accrue sick leave at the rate of no less than one hour for every 30 hours worked.
• Start of Accrual: Employees begin to accrue sick leave at the start of employment or on the effective date of the law, whichever is later.
• Frontloading: Employers may choose to frontload sick leave by providing the total amount of sick leave at the beginning of the calendar year. However, employers cannot retroactively reduce the amount of sick leave based on an employee’s actual hours worked during the calendar year to the extent the employees would not have accrued the full amount of sick leave based on their hours worked. It is unclear at this time whether frontloading a sufficient amount of sick leave at the start of each year would remove an employer’s year-end carryover obligations (see below).
• Accrual Cap:
  • Employers with 4 or fewer employeesin any calendar year and a net income of $1 million or less in the previous tax year: Must provide employees with up to 40 hours of unpaid sick leave per calendar year.
  • Employers with 4 or fewer employees in any calendar year and a net income greater than $1 million in the previous tax year: Must provide employees with up to 40 hours of paid sick leave per calendar year.
  • Employers with 5 to 99 employees in any calendar year: Must provide employees with up to 40 hours of paid sick leave per calendar year.
  • Employers with 100 or more employees in any calendar year: Must provide employees with up to 56 hours of paid sick leave per calendar year.
• Usage Waiting Period: As noted above, although the bill does not contain an express usage waiting period for new hires, it provides that employees may begin to use sick leave on or after January 1, 2021. Thus, it appears employers will have to allow employees to begin accruing sick leave sometime in 2020, but can restrict use of such accrued time until 2021.
• Reasons for Use: Employees may use sick leave upon the oral or written request of the employee for the following purposes:

(i) for a mental or physical illness, injury, or health condition of such employee or such employee’s family member, regardless of whether such illness, injury, or health condition has been diagnosed or requires medical care at the time that such employee requests such leave;

(ii) for the diagnosis, care, or treatment of a mental or physical illness, injury or health condition of, or need for medical diagnosis of, or preventive care for, such employee or such employee’s family member;

(iii) for certain absences from work when the employee or employee’s covered family member has been the victim of domestic violence as defined under New York law, a family offense, sexual offense, stalking or human trafficking. A person who has committed a domestic violence, family, or sexual offense is not eligible to use sick leave under the law as described in the prior sentence.

• Family Member: The legislation defines “family member” to include an employee’s (1) child, (2) spouse, (3) domestic partner, (4) parent, (5) sibling, (6) grandchild (7) grandparent, and (8) the child or parent of an employee’s spouse or domestic partner.  
• Increments of Use: Employers can set a reasonable minimum increment for use of sick leave, which may not be greater than four hours.
• Year-End Carryover: Employers must permit employees to carryover unused sick leave at year-end. The bill does not provide any cap on the amount of leave carried over, but usage may be capped as provided below.
• Usage Cap:
  • Employers with fewer than 100 employees: May limit the use of sick leave to 40 hours per calendar year.
  • Employees with 100 or more employees: May limit the use of sick leave to 56 hours per calendar year.
• Calendar Year: A “calendar year” for purposes of determining the number of employees pursuant to the law is defined as January 1 to December 31. For all other purposes, a calendar year may mean either January 1 to December 31, or  “a regular and consecutive twelve-month period, as determined by an employer.”
• Confidentiality: An employer cannot compel the employee to disclose any confidential health or domestic-violence related information. However, the definition of “confidential” is unclear in the context of the provision.
• No Retaliation: The law prohibits discrimination and retaliation against employees who use sick leave. After using sick leave, employees must be reinstated to their position, with equivalent pay and other terms and conditions of employment.
• Rate of Pay: Employees must be paid at their regular rate of pay, or the applicable minimum wage, whichever is greater, while using sick leave.
• Notice of Accrued and Used Sick Leave: Upon the oral or written request of an employee, an employer must provide a summary of the amounts of sick leave accrued and used in the current and/or any previous calendar year within three business days of the request.
• Recordkeeping: Employees must retain records of sick leave for six years in accordance with Section 195 of the NYLL, which is now amended to include the amount of sick leave provided to each employee.
• Preemption: The bill does not “prevent a city with a population of one million or more from enacting and enforcing local laws or ordinances which meet or exceed the standard or requirements” of the bill. Thus, the existing New York City Earned Safe and Sick Time Act would remain in effect. In addition, given the use of the term “a city” in the bill, the bill would not affect the Westchester County Paid Sick Time Ordinance and Paid Safe Time Ordinance.
• Interplay with Current Sick Leave Policies: Employers with existing PSL or paid time off policies will not be required to provide any additional sick leave if their policies are at least as generous as the law with regard to amount of leave, accrual, carryover, and use requirements.
• Collective Bargaining Agreements and Waivers: The law specifically permits waivers within CBAs that provide a comparable benefit, and permits unions to negotiate terms of sick leave that differ from the requirements of the law. However, the law provides that if one of these options is chosen, the CBA must specifically acknowledge the provisions of the sick leave law.
• Is Payout Upon Separation Required: No, there is no requirement for employers to pay employees for earned, unused sick leave upon separation of employment.

Employer Takeaways:

In the coming months before the New York’s new statewide sick leave law goes into effect, we expect further guidance by the New York Department of Labor. In the meantime, employers should consider taking the following steps: 

• Monitor the New York Department of Labor’s website for the release of further guidance.
• Review existing sick leave policies and either implement new policies or revise existing policies, as well as any related attendance, conduct, anti-retaliation, and discipline policies.
• Ensure that payroll records include the amount of sick leave provided to each employee and are retained in accordance with Section 195 of the Labor Law, as amended by the legislation.

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  paid leave requirements. 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] As discussed in more detail below, the sick leave mandate would provide paid benefits to most employees, although some employees who work for smaller employees would only be entitled to unpaid benefits.

[2] Today, across 43 federal, state, and local jurisdictions, there are 46 private employer-provided paid time off mandates either in effect or scheduled to go into effect in the coming months (this list includes new COVID-19 emergency paid sick leave mandates): (1) The Federal Contractor PSL law; (2) Arizona; (3) California; (4) Colorado (temporary law in response to Coronavirus) (5) Connecticut; (6) Maine (PTO law); (7) Maryland; (8) Massachusetts; (9) Michigan; (10) Nevada (PTO Law); (11) New Jersey; (12) New York (1 emergency law in response to coronavirus, 1 statewide general law, as we are discussing in this alert); (13) Oregon; (14) Rhode Island; (15) Vermont; (16) Washington; (17) San Francisco, CA; (18) Washington, D.C.; (19) Seattle, WA; (20) Long Beach, CA (hotel-specific law); (21) SeaTac, WA (hospitality and transportation industry-specific law); (22) New York City, NY; (23) Los Angeles, CA (1 general law, 1 hotel-specific law, and 1 emergency COVID-19 supplemental ordinance); (24) Oakland, CA; (25) Philadelphia, PA; (26) Tacoma, WA; (27) Emeryville, CA; (28) Montgomery County, MD; (29) Pittsburgh, PA (effective date was March 15, 2020); (30) Austin, TX (delayed; ongoing litigation); (31) Santa Monica, CA; (32) Minneapolis, MN; (33) San Diego, CA; (34) Chicago, IL; (35) Berkeley, CA; (36) Saint Paul, MN; (37) Cook County, IL; (38) Duluth, MN; (39) San Antonio, TX (delayed; ongoing litigation) (40) Westchester County, NY (1 sick leave law, 1 safe leave law); (41) Dallas, TX (suspended; ongoing litigation); (42) Bernalillo County, NM (PTO law); and (43) San Jose, CA (emergency law in response to coronavirus). This list does not include state and local paid family and medical leave programs.