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Legal Update

Oct 21, 2020

If Pain, Yes Gain—Part 90: New York State Publishes Paid Sick Leave Website and FAQs

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Seyfarth Synopsis: Multiple weeks after the New York State Paid Sick Leave (“NYPSL”) law’s September 30, 2020 effective date, the State has published a NYPSL website and set of frequently asked questions (“FAQs”). While the administrative guidance, which was made available to the public earlier this week, addresses certain ambiguities in the NYPSL law, other questions and gray areas remain.

On September 30, 2020, Empire State employers became subject to the requirements of the NYPSL law enacted in April 2020.[1] The NYPSL law requires covered employers to allow employees to begin accruing sick leave as of the law’s effective date. However, employers are not required to allow employees to use this accrued sick leave until January 1, 2021. At that time employees can begin using available sick leave for covered absences, which broadly include their own illness or injury, care of a family member with an illness or injury, and certain reasons related to domestic violence, a family offense, a sexual offense, stalking, or human trafficking.

In the midst of this three-month delay on sick leave usage and on the heels of New York City amending its Earned Safe and Sick Time Act ("ESSTA"), which also went into effect on September 30, New York State has published a paid sick leave website and set of FAQs. Both summarize and expand on certain aspects of the NYPSL law. Here are some of the highlights.

  • Employee Eligibility: The NYPSL law broadly defines “employee.” The State’s recent administrative guidance echoes this broad definition by noting that all private-sector employees in New York State are covered, regardless of industry, occupation, part-time status, and overtime exempt status.[2]
    • Telecommuting: The NYPSL FAQs state that employers cannot mandate that employees telecommute or work from home instead of using available sick leave for covered absences. That said, employers can offer such alternative work arrangements to employees, and if an employee voluntarily accepts, the employee will not be charged sick leave for that day.
  • Determining Employer Size: Under the NYPSL law, the amount of sick leave a covered employer must provide its employees depends on certain factors, most notably the size of the employer’s workforce.[3] However, the law does not clarify whether an employer should count only its New York employees or its entire US employee population when determining its size and corresponding obligations under the NYPSL law. Neither the NYPSL website nor FAQs clarify this point.
  • No Usage Waiting Period: The NYPSL FAQs confirm that employers cannot set a sick leave usage waiting period for new hires. In other words, employees hired on or after January 1, 2021 can use their NYPSL as it accrues.
  • Accrual: Sick leave under the NYPSL law accrues at a rate of one hour for every 30 hours worked, up to either 40 or 56 hours per year depending on certain factors. The NYPSL FAQs explain that sick leave does not accrue (a) when an employee uses sick leave, or (b) for other payments received for non-work hours, “such as bonuses or subject-to-call-time.” However the FAQs also explain that time that is considered “hours worked,” such as on-call time, training time, and travel time, must be counted for sick leave accrual purposes.
  • Frontloading: Both the NYPSL website and FAQs state that covered New York employers can frontload their employees with the required 40 or 56 hours of sick leave at the start of the benefit year instead of following the one hour for every 30 hours worked accrual setup. The guidance clarifies that an employer who frontloads sick leave cannot revoke or reduce an employee’s sick leave entitlement later in the benefit year if the employee works fewer hours than anticipated by the employer and thus would have earned fewer sick leave hours under an accrual system. However and notably, the administrative guidance remains silent on whether frontloading a sufficient amount of sick leave to employees removes the employer’s year-end carryover obligations.
  • Year-End Carryover: The NYPSL law requires employers to allow employees to carryover earned, unused sick leave from year to year. However, the law does not set a limit on the amount of unused sick leave an employee can carryover at year-end. The State’s administrative guidance does not resolve this uncertainty and, in fact, appears to contradict itself on whether a year-end carryover cap is permissible. Despite the confusion, the relevant FAQ on year-end carryover notes the following:
    • “Sick leave that is unused by an employee over the course of the year must be carried over to the next calendar year. However, employers may limit employee use to the number of hours that the employee is entitled to use within any calendar year [i.e., 56 or 40 hours depending on certain factors]. This may result in an employee maintaining a leave balance in excess of the amount they are permitted to use in any calendar year.” This language suggests that employers cannot set a year-end carryover cap for earned, unused sick leave.[4]
  • Covered Reasons for Use: As noted above, sick leave under the NYPSL law can be used for various reasons. The FAQs state that because earned sick leave can be used for preventive medical care, this (a) would cover absences for routine medical appointments and (b) depending on the relevant facts, could cover absences due to temporary closure of the employer’s place of business due to a public health emergency. The FAQs also note that NYPSL cannot be used for bereavement leave.
  • Use of Existing Employer Paid Leave Policies: The NYPSL administrative guidance reiterates the NYPSL law’s standard on use of existing paid time off policies for compliance with the new mandate. In particular, the guidance notes that if an employer maintains an existing leave policy, which can either be a paid sick leave policy or a non-sick paid time off policy like PTO or personal time, that meets or exceeds the NYPSL law’s accrual, carryover, and use requirements, the NYPSL law “does not present any further obligations on that employer.” The administrative guidance, however, does not explain the specific substantive standards, i.e., annual usage cap, reasons for use, covered family members, increments of use, treatment of new hires, notice to the company, etc., that are considered part of the “use requirements” the employer’s policy must satisfy.
  • Interplay with Other Laws: The FAQs state that the NYPSL law “operates independently from other State and Federal leave requirements and must therefore be paid in addition to any other State or Federal leave entitlements.” The FAQs also note that during a New York Paid Family Leave (“NYPFL”) absence, an employee can choose to use sick leave only if permitted by the individual’s employer. The FAQs further indicate that employers can have NYPSL and sick leave under the New York City ESSTA run concurrently as long as the employer complies with the more generous aspects of the two laws.[5]
  • Written Policy: While the actual NYPSL law does not include an express written policy requirement, New York Labor Law (“NYLL”) Section 195.5 does. Specifically, the NYLL section says: “Every employer shall…notify his employees in writing or by publicly posting the employer’s policy on sick leave, vacation, personal leave, holidays and hours.” (emphasis added). The State’s recent NYPSL administrative guidance expands on this NYLL language and notes the following about sick leave policies:
    • Any limitations permitted by the law must be put into writing and either posted or given to employees.
    • Employers must notify employees in writing or by posting a notice in the worksite, prior to the leave being earned, of any restrictions in their leave policy affecting the employees’ use of leave, including any limitations on leave increments.
  • Payment of Sick Leave: The NYPSL law states that employees who use paid sick leave must be compensated at the greater of their regular rate of pay or the applicable minimum wage. The FAQs contain guidance on additional payment of sick leave topics, including (a) how to compensate sick leave for employees who are paid on a commission, flat rate basis or other non-hourly basis, (b) whether employers must pay the overtime rate of pay when sick leave is used during hours that would have been overtime if worked, (c) whether sick leave payments must include lost tips or gratuities, and (d) sick leave payments where an employee is paid different rates for different tasks.
  • Seasonal Employees: In addition to noting that the NYPSL law applies to seasonal employees, the new FAQs contain information regarding how to handle such employees’ earned, unused sick leave in between seasons. Specifically, after reiterating that employers do not need to cash out earned, unused sick leave at the end of an employment relationship, the FAQs note that if a seasonal employee “maintain[s] an ongoing employment relationship” with the employer in between seasons, the employer must maintain the individual’s earned, unused sick leave during the break in employment. The NYPSL law and administrative guidance otherwise are silent on whether employers must reinstate earned, unused sick leave to employees who are rehired within a certain amount of time after their employment relationship ends.
  • Collective Bargaining Agreements: Under the NYPSL law, if an employer enters into a CBA on or after September 30, 2020, the employer does not need to provide its unionized employees with NYPSL if the CBA provides the employees with a “comparable benefit…in the form of paid days off,” which can include “leave, compensation, other employee benefits, or some combination thereof.” In addition the law states that such a CBA “must specifically acknowledge the provisions of [the NYPSL law].” The administrative guidance provides updates on both of the above standards.
    • First, the FAQs state that the CBA must specifically reference NYLL Section 196-b to satisfy the above CBA exemption.
    • Second, per the FAQs, the New York Department of Labor (“NYDOL”) recommends that the CBA expressly identify and label the “comparable benefits” to avoid confusion.
    • Third, the NYPSL website states that (a) the NYDOL considers leave time which has fewer restrictions on its use to be comparable to that required by this law, regardless of the label of such leave (e.g., annual or vacation time), and (b) multiple leave benefits that satisfy the NYPSL law’s use requirements can be combined to satisfy the “comparable benefit” standard.
  • Topics Not Addressed: In addition to the outstanding NYPSL ambiguities flagged above, the recent administrative guidance also does not address certain other important topics, including, but not limited to, whether (a) employers can require employees who use sick leave to submit reasonable documentation proving that the absence was for a covered reason, and (b) the law imposes any posting or individual notice obligations on employers.

Despite the State’s first wave of NYPSL administrative guidance and the law having been in effect for more than three weeks, there remain a number of “unknowns” regarding employers’ NYPSL obligations. We will continue to monitor NYPSL and NYC ESSTA developments and update employers as appropriate. In the meantime, here are some steps to consider:

  • Monitor the NYDOL website for the release of additional administrative guidance and/or regulations on employers’ NYPSL obligations.
  • Monitor the New York City ESSTA website for updated administrative guidance and/or regulations on employer’s leave obligations, as well as updated model notices and posters, in light of ESSTA as amended.
  • Review existing sick leave policies and practices, and either implement new policies and practices or revise existing policies and update existing practices, while doing the same for any related attendance, conduct, anti-retaliation, and discipline policies and practices.

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] For more information on the NYPSL law, which is separate from the statewide COVID-19 Emergency Leave Law in effect since March 2020, see our prior Legal Updates here, here and here. For more information on the New York COVID-19 Emergency Leave Law, see our prior Legal Update here.

[2] The guidance also clarifies that federal, state, and local government employees are not covered under the NYPSL law, but that the law does apply to employees of charter schools, private schools, and not-for-profit corporations.

[3] Employers with 5 to 99 employees in any calendar year must provide employees up to 40 hours of paid sick leave per year, and employers with 100 or more employees must provide employees up to 56 hours of paid sick leave per year. Smaller employers either must provide 40 hours of paid or unpaid sick leave depending on their net income.

[4] In response to a separate FAQ about frontloading sick leave for part-time employees, the guidance states “An employer who front-loads fewer than 40 hours must allow employees to carry over up to 40 hours of unused sick leave into the new calendar year,” (emphasis added).

[5] This most likely also is the case with respect to sick leave under the Westchester County Earned Sick Leave Law.