If Pain, Yes Gain—Part 88: T-30 Days Until New York’s General Statewide Paid Sick Leave Law Takes Effect

Seyfarth Synopsis: New York’s general paid sick leave (“PSL”) mandate, expanding beyond the statewide COVID-19 Emergency Leave Law, is scheduled to go into effect on September 30, 2020. While employers need not permit the use of PSL until January 1, 2021, all other obligations will be in effect come month’s end. As employers begin and/or continue to prepare for compliance with the pending mandate, here is a reminder of the statewide general PSL law’s key provisions, ambiguities and potential problem areas for employers to monitor for the remainder of the year.

Empire State employers have been met with numerous compliance challenges in 2020, and the PSL bug has played no small role. When Governor Cuomo signaled his intent to pass a statewide PSL mandate at the start of the year, there was of course, no indication that COVID-19 would result in an interim COVID-19 mandate being passed and taking immediate effect in March 2020.[1] However, the COVID-19-specific mandate did not delay the state’s pursuit of a general PSL mandate, which was passed on April 3, 2020.[2] As noted above, the general non-COVID-19 PSL mandate takes effect on September 30, 2020.

New York is one of 15 states that currently has a statewide employer-provided paid leave law either in effect or scheduled to go into effect in the coming months.[3] Despite the statewide mandate emerging earlier this year, many New York employers are familiar with the PSL bug in light of the existing New York City Earned Safe and Sick Time Act and the Westchester County Earned Sick Leave and Safe Time Leave Laws.[4] Regardless, all New York employers should be bracing for the statewide law’s impact because the statewide PSL law does not preempt these local mandates. Moreover, there are some provisions of the statewide law that expressly require more generous PSL benefits and protections for employees as compared to the local ordinances.

Further complicating the PSL landscape in New York is the fact that there are a number of ambiguities under the state’s general PSL law, including, but not limited to, whether: (a) employer size is determined on a state or nationwide basis given this calculation determines certain benefit obligations; (b) employers can impose a usage waiting period for new-hires beyond January 1, 2021, at which time employers must permit use of PSL; (c) frontloading PSL in lieu of accrual eliminates year-end carryover obligations; and (d) employers can impose a cap on year-end carryover of unused PSL given the law does not reference a cap at this time. As of the publication of this Legal Update, the state has not released guidance or regulations on the looming PSL law. As a result, employers looking to avoid a time crunch may want to begin preparations for compliance with the law, and monitor developments requiring potential updates going forward.

In the meantime, here is a synopsis of the statewide general PSL law’s requirements.

• Employer/Employee Coverage: Nearly all private sector employers and employees appear to be covered. The definition of “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, while “employee” is defined as any person employed for hire by an employer in any employment.
• Accrual Rate: Employees will be entitled to accrue PSL at a rate of 1 hour of PSL for every 30 hours worked, up to the annual caps provided below.
• Frontloading: In order to avoid tracking accrual, employers can frontload an amount of PSL equal to the annual caps provided below at the beginning of the calendar year. However, the law is silent on whether frontloading PSL eliminates an employer’s year-end carryover obligations otherwise required under the law.
• Start of Accrual and Use: Employees begin earning PSL upon commencement of employment or on September 30, 2020, whichever is later. In contrast, employees need not be permitted to begin using accrued PSL until January 1, 2021. Notably, the law does not otherwise appear to permit an employer-imposed waiting period during which newly hired employees accrue, but cannot use, PSL.
• Accrual Caps: Generally, employers can cap employees’ annual accrual depending on whether the employer has (a) less than 100 employees or (b) 100 or more employees in any calendar year. For employers in the former category, the accrual cap is 40 hours of PSL per calendar year. For employers in the latter category, the accrual cap is 56 hours of PSL per calendar year.[5]
• Carryover and Annual Usage Limits: The law clearly requires employers to allow employees to carryover earned but unused PSL from year to year. However, there does not appear to be any limit on the amount of unused PSL an employee can carryover at year-end. With that said, the law provides that regardless of carryover balances, employers with less than 100 employees can limit PSL use to 40 hours per year, while employers with 100 or more employees can limit PSL use to 56 hours per year.
• Reasons for Use: Employees may use PSL for the following purposes: (1) 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; (2) 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; and (3) for 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.
• Family Member: Covered family members 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 minimum increments for use of PSL, not to exceed 4 hours.
• Rate of Pay: When using PSL, employees must be paid at their regular rate of pay, or the applicable minimum wage, whichever is greater.
• Employee Notice of PSL Use and Documentation: The law is particularly vague in terms of what notice an employee must provide to an employer when using PSL and what documentation an employer can require an employee to submit in order to verify permissible PSL use. Specifically, the law lacks: (1) timing requirements for providing notice of PSL based on whether the absence was foreseeable or unforeseeable; and (2) information on whether an employer can require verification, after how long of an absence if so, and what forms of verification may be required. Despite its silence on the above points, which are addressed by most state and local PSL mandates, including those in New York City and Westchester County, the New York state law: (a) states that an employer must provide PSL for covered reasons upon the oral or written request of an employee; and (b) prohibits employers from requiring disclosure of confidential information relating to employees’ or their family members’ circumstances giving rise to PSL use.
• Separation from Employment & Reinstatement Upon Re-Hire: New York employers will not be required to compensate employees for earned, unused PSL upon termination, resignation, or other separation from employment. However, the law does not speak to whether an employer must reinstate previously earned, unused PSL for an employee who separates from employment and is subsequently re-hired, and the maximum amount of time between the separation and re-hire if so.
• Use of Existing Paid Leave for Compliance: Employers with existing PSL or paid time off policies will not be required to provide any additional PSL if their policies are at least as generous as the law with regard to amount of leave, accrual, carryover, and use requirements. As a result, employers currently providing 40 hours of paid leave each year in compliance with New York City and/or Westchester County law should generally be able to have these benefits run concurrently with the statewide PSL benefits required. With that said, such employers may need to modify their existing policies and practices with respect to use of such leave to the extent more generous conditions associated with PSL use are required by the statewide law.
• Employer Notice and Posting Obligations & Available Balance: Unlike most existing state and local PSL laws, New York’s general PSL law does not contain provisions on employers’ obligations to provide individual notification of and/or post information on employees’ PSL rights. However, employers are required to provide a summary of PSL accrued and used by an employee in the current and/or any previous calendar year, upon the oral or written request of an employee, within 3 business days of the request.
• Recordkeeping: Employees must retain records of the amount of PSL provided to each employee for a period six years in accordance with Section 195 of the New York Labor Law.

Despite the number of ambiguities with regard to statewide PSL requirements noted above, fortunately, employers need not permit use of PSL until January 1, 2021. Hopefully, by the start of 2021, the state will have released information on a number of these points. Nonetheless, these gray areas will be important for employers to keep in mind to the extent employers permit PSL use prior to 2021 and as policies are being updated and/or implemented for compliance with the statewide law prior to its September 30, 2020 effective date. We will continue to monitor New York State PSL developments and update employers as appropriate. In the meantime, here are some steps to consider:

• Monitor the New York Department of Labor’s website for the release of administrative guidance and/or regulations on employers’ PSL obligations.
• 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 for a six year period.

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 this law 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.

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[1] For more information on the New York State COVID-19 mandate, see our prior Legal Update here.

[2] Our Legal Update following the enactment of New York’s general PSL law here.

[3] The other states with such mandates are: (1) Arizona; (2) California; (3) Colorado (Non-COVID-19 PSL mandates effective as of January 1, 2021); (4) Connecticut; (5) Maine (PTO law; Effective as of January 1, 2021); (6) Maryland; (7) Massachusetts; (8) Michigan; (9) Nevada (PTO Law); (10) New Jersey; (11) Oregon; (12) Rhode Island; (13) Vermont; and (14) Washington. This list does not include: (a) mandates solely requiring COVID-19 specific leave, whether in addition to/separate and apart from paid leave required under any of the laws listed above, to the extent applicable, or in jurisdictions solely imposing COVID-19 specific PSL obligations on employers; (b) local PSL ordinances; and (c) jurisdictions with state and local paid family and medical leave programs.  

[4] The New York City Earned Sick Time Act originally went into effect in 2014 and is now known as the New York City Earned Safe and Sick Time Act due to amendments effective as of May 2018. The Westchester County Earned Sick Leave Law has been in effect in April 2019, and the County’s separate Safe Time Leave Law was enacted shortly thereafter, and went into effect in October 2019. For more information on these local mandates, see our prior Legal Updates here, here, and here.

[5] Employers with four or fewer employees in 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.