If Pain, Yes Gain—Part 93: New York Department of Labor Announces Proposed Regulations for Statewide Sick Leave Law

Seyfarth Synopsis: On December 2, the New York State Department of Labor (“NYDOL” or the “Department”) published proposed regulations for the general New York State Paid Sick Leave (“NYSPSL”) Law that went into effect on September 30, 2020. As currently proposed, the Department’s regulations address some -- but by no means all -- uncertainties coming from the text of the actual law. Due to the forthcoming notice and comment period, employers cannot be sure of when or if these proposed regulations will be adopted, or how their NYSPSL obligations will be impacted if so. Nonetheless, the proposed regulations provide insight into paid sick leave obligations and rights Empire State employers may face early next year.

Overview

Beyond the COVID-19 pandemic and the statewide COVID-19 Emergency Leave Law that went into effect as a result, 2020 has been an unprecedented year for paid sick leave (“PSL”) in New York. In April 2020, the state enacted a general PSL law. The NYSPSL law went into effect on September 30, 2020 with a number of outstanding uncertainties surrounding general statewide PSL compliance obligations.

While the first glimpse of potential grey-area fillers came from amendments to the New York City Earned Safe and Sick Time Act (“ESSTA”) -- enacted and effective September 28 and 30 respectively, and intended to align with the NYSPSL law’s requirements -- the NYDOL remained silent on statewide PSL guidance. By mid-October, however, the NYDOL broke its silence and published NYSPSL administrative guidance and FAQs.[1]

Although non-binding, the Department’s materials, among other things: (a) confirmed the suspected prohibition of usage waiting periods for new-hires as of January 1, 2021; (b) expanded upon covered reasons for use of PSL; (c) explained the applicability of the New York Labor Law’s (“NYLL”) existing fringe benefit written policy requirement to PSL under the NYSPSL law; (d) provided details on proper payment of sick time standards for certain types of employees; and (e) provided some guidance on language needed in collective bargaining agreements to take advantage of the law’s unionized employee exemption.

While helpful, the NYSPSL guidance and FAQs left open some significant ambiguities, including, but not limited to, whether: (a) employer size, which impacts annual benefit obligations, is determined by counting only employees working in the state or nationwide; (b) employers can cap the amount of earned, unused PSL that carries over at year-end; (c) frontloading the annual maximum amount of PSL at the start of each year eliminates year-end carryover obligations; (d) employers can require employees to submit documentation verifying some or all PSL uses as permissible; and (e) employers must notify employees of their rights under the NYSPSL law via providing individual notice of and/or posting the information.

Proposed NYSPSL Law Regulations

As noted above, on December 2, 2020,[2] the NYDOL published “Proposed Regs” on its PSL website, which would “establish[] rules and regulations for Sick Leave as set forth by . . . the [NYLL]” if and when adopted. While the Department has yet to formally publish notice of the Proposed Regulations in the New York Administrative Register and commence the comment period, here are the highlights from the Proposed Regulations posted on the NYDOL website.

• Documentation: Unlike the NYSPSL law and non-binding administrative guidance, the Proposed Regulations contain provisions on an employer’s ability to “require medical or other verification in connection with sick leave.”
  • Length of Absence Required: Specifically, such verification may not be requested for PSL use that is less than three consecutive previously scheduled workdays or shifts. Said another way, the verification can only be requested where the employee uses PSL for three or more consecutive and previously scheduled workdays or shifts. Note that, in contrast, ESSTA generally requires that an employee be absent for more than three consecutive workdays before an employer can request reasonable documentation.
  • Types of Documentation Permitted and Amount of Time to Provide: The Proposed Regulations, if finalized, would additionally differ from ESSTA in that: (a) the latter contains a more detailed list of specific forms of reasonable documentation an employer can require from employees using PSL, while the former simply provides that requests for documentation shall be limited to (1) an attestation from a licensed medical provider supporting the existence of a need for sick leave, the amount of leave needed, and a date that the employee may return to work, or (2) an attestation from an employee of their eligibility to leave;[3] and (b) the Proposed Regulations are silent on the amount of time an employee must be given to provide documentation, while ESSTA provides that employees must be given seven days from their return to work date to provide such documentation.
  • Allocation of Costs and Prohibited Disclosure Requirements: Like the amended ESSTA, the NYSPSL Proposed Regulations would prohibit an employer from requiring an employee to (1) pay any costs or fees associated with obtaining medical or other verification of eligibility for use of sick leave, and (2) provide documentation disclosing (a) the reason for leave other than as permitted by law, (b) confidential information, or (c) the nature or details behind the reason for use of PSL.
• Employer Size: The NYSPSL Proposed Regulations do not provide insight into the NYDOL’s take on whether employer size is determined by counting employees in New York only or nationwide -- a critical question for purposes of determining employers’ annual accrual and usage obligations.
  • Fluctuating Headcount, Employer Size Determination for the Year, and Benefit Implications: The Proposed Regulations, however, would require that “the number of employees employed by an employer during a calendar year . . . be determined by counting the highest total number of employees concurrently employed at any point during the calendar year to date.” In connection this requirement, the Proposed Regulations also would mandate the following: (a) the accrual of additional required leave up to the annual accrual limit under the NYSPSL law takes effect from the date of the increase and shall not entitle employees to reimbursement for previously used unpaid leave or to use more than the annual maximum usage limit set by the employer in accordance with the NYSPSL law; (b) previously accrued and used or unused paid leave and accrued and used unpaid leave in a calendar year may be credited by an employer toward any increased paid leave accrual and use obligations for the year; however, employers may not credit any previously accrued, unused unpaid leave toward any accrual and use obligations for the year; and (c) employees must retain all existing accruals of paid and unpaid leave notwithstanding an increase in the number of employees during a calendar year.
  • Employment Status and Inclusion in Headcount: Under the Proposed Regulations, employees on paid or unpaid leave, including sick leave, leaves of absence, disciplinary suspension, or any other type of temporary absence, would be counted as long as the employer has a reasonable expectation that the employee will later return to active employment. If there is no employment relationship (as when an employee is laid off or terminated, whether temporarily or permanently), the individual would not be counted.
  • Employees of Joint Employers: For employees jointly employed by more than one employer, each joint employer would be required to count such employees, regardless of whether they are on the employer’s payroll records, for the purposes of determining each employer’s NYSPSL law obligations.
• Accrual Increments: As a reminder, under the NYSPSL law, employees must be permitted to accrue PSL at a rate of one hour of PSL for every 30 hours worked. Unlike some other state and local PSL mandates, which permit employers to provide PSL accrual in one-hour increments, the Proposed Regulations state that PSL accruals “must account for all time worked, regardless of whether time worked is less than a 30-hour increment.” The Proposed Regulations do not establish a mathematical formula for determining the accrual of partial hours when an employee works less than 30 hours. Rather, they note that “for time worked in increments of less than 30 hours, employers may round accrued leave to the nearest 5 minutes, or to the nearest one-tenth or quarter of an hour, provided that it will not result, over a period of time, in a failure to provide the proper accrual of leave to employees for all the time they have actually worked.” It is unclear how this language would interplay with the NYSPSL law’s minimum increment of use standard, which permits employers to set a reasonable minimum increment not to exceed four hours, and whether employers would be expected to calculate employees’ partial PSL accruals, to the extent they exist, each time the employee seeks to use available PSL.
• Miscellaneous Information: Beyond the above topics, the Proposed Regulations define a number of terms within the NYSPSL law, which, especially in consideration of the outstanding substantive uncertainties noted above, would not appear to have a significant impact on compliance preparations, even if adopted. [4]

Employer Takeaways

As employers and laypersons alike look forward to closing the books on 2020, both also can expect some continuation of New York sick leave developments as we approach year-end and begin 2021. We will continue to monitor these developments, and update impacted employers as appropriate. In the meantime, here are some steps to consider:

• Monitor the NYDOL’s website for updated NYSPSL law administrative guidance and both substantive and procedural updates on the NYSPSL law regulations, as well as the New York City Department of Consumer and Worker Protection’s ESSTA website for updated amended ESSTA administrative guidance as well as information regarding amended ESSTA rules.
• 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 personnel responsible for compliance with state and local notice, posting, available balance, and recordkeeping requirements, are aware of the same as applicable, and have updated administrative policies and/or practices in place as may be necessary.

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 New York State and local general PSL 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] During this same general time period, the Westchester County Human Rights Commission’s Earned Sick Leave Law website was updated with the following statement: “New York State’s Sick Leave Law . . . became effective and now governs paid sick leave in Westchester County. Please refer to the New York State Sick Leave Law for information about your obligations and rights under New York State law.” The County’s website for its separate Safe Time Leave Law continues to provide information relative to that mandate. It is unclear whether the County’s updated sick leave website language means that the sick leave ordinance has sunset in light of the NYSPSL Law. For more information regarding Westchester County, NY’s standalone Safe Time Leave Law, see our prior Legal Update here.

[2] With respect to the amended NYC ESSTA, on October 27, the New York City Department of Consumer and Worker Protection published an updated Notice of Employee Rights for employers to use in compliance with their updated notice distribution and posting obligations, and on November 2, updated its non-binding ESSTA FAQs, which provided employers with certain insights into their compliance obligations following the ESSTA amendments. As of the publication of this Legal Update, New York City has not yet issued any proposed or final amended ESSTA regulations, and the ESSTA website’s “Law and Rules Packet” contains (1) ESSTA as most recently amended and (2) the New York City ESSTA Rules in place prior to the September 30, 2020 effective date of the amended ESSTA.

[3] ESSTA allows employers to require employee self-verification of permissible PSL use for any PSL absence, including those that are less than the “more than three consecutive workdays” standard.

[4] The specific terms defined are: Family Offense, Human Trafficking, Mental Illness, Preventative Medical Care, Sexual Offense and Stalking (sub-reasons for use within the law’s broader sick and safe time covered reasons for use), Domestic Partner (1 of 8 covered family members under the NYSPSL), Confidential Information (part of the broader prohibition on specifics in connection with a covered absence that cannot be required in documentation verifying permissible PSL use), and Net Income (relevant for determining whether an employer with 4 or fewer employees must provide PSL or unpaid leave in that such an employer with a net income exceeding $1,000,000 in the previous tax year must provide PSL).