Paid Leave and Coronavirus — Part IV: Statewide Paid Sick Leave Law and Separate COVID-19-Related Leave and Employee Protections Coming to New York

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Seyfarth Synopsis: Governor Cuomo has announced agreement on a law requiring New York employers to provide sick leave to eligible employees, as well as various forms of paid and unpaid leave for employees affected by COVID-19.  

As the federal government, states, and municipalities scramble to consider paid and unpaid leave options for workers affected by COVID-19, New York State is on the verge of enacting new legislation aimed at providing employees across the Empire State with job protection and additional leave, both in the short-term to combat the effects of COVID-19 and in future years.

On March 17, 2020, Governor Andrew M. Cuomo announced a “three-way agreement” with the State Legislature on a bill “guaranteeing job protection and pay for New Yorkers who have been quarantined as a result of novel coronavirus, or COVID-19.” The bill contains two main components: COVID-19 benefits and statewide mandatory paid sick leave.[1] The former will go into effect immediately upon the statute’s enactment, and the latter will take effect 180 days later.  While it currently is unclear when the bill will be considered “passed,” given the agreement between legislative leaders and the Governor, the bill is expected to become law very soon.

Once signed by Governor Cuomo, New York would become the 14th state to pass a mandatory paid sick leave,[2] and as of this writing, the second state, after Colorado, to pass a statewide COVID-19 relief law that includes paid leave. See Part I of our “Paid Leave and Coronavirus” series for more information on the Colorado COVID-19 emergency paid sick leave mandate.

There currently are 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 weeks.

Here is a synopsis of the bill’s COVID-19 relief and mandatory sick leave components.

Leave for Those Quarantined or in Isolation Due to COVID-19

Overview

The bill provides for additional paid sick leave, unpaid leave, as well as an expansion of the state’s paid family leave and disability benefits, to certain employees who are “subject to mandatory or precautionary orders of quarantine or isolation” related to COVID-19.

• Employers with 10 or fewer employees and a net income of $1 million or less: Must provide unpaid sick leave for the entire period of quarantine or isolation, and employees will be eligible for paid family leave ("PFL") and disability benefits.
• Employers with 10 or fewer employees and a net income greater than $1 million: Must provide 5 days of paid sick leave, and unpaid leave for the remainder of the quarantine or isolation. After exhausting the 5 days of paid sick leave, employees are eligible for paid family leave and disability benefits.
• Employers with 11-99 employees: Must provide at least 5 days of paid sick leave, and unpaid leave through the end of the period of quarantine or isolation. After 5 days of sick leave, employees are eligible for paid family leave and disability benefits.
• Employers with 100 or more employees and all public employers: Must provide at least 14 days of paid sick leave.

While the law includes a definition of “mandatory or precautionary order of quarantine or isolation,” the definition fails to provide further clarity. However, New York State’s guidance for Local Health Departments provides the following parameters, which likely would apply to the above COVID-19 leave mandates:

• Mandatory Quarantine:  applicable where (1) a person has been in close contact (6 ft.) with someone who is positive but is not displaying symptoms for COVID-19; or (2) a person has traveled to China, Iran, Japan, South Korea or Italy and is displaying symptoms of COVID-19.
• Mandatory Isolation:  applicable where a person has tested positive for COVID-19, whether or not displaying symptoms. 
• Precautionary Quarantine:  applicable where a person (1) has traveled to China, Iran, Japan, South Korea or Italy while COVID-19 was prevalent, but is not displaying symptoms; or (2) had proximate exposure to a positive person but has not had direct contact with a positive person and is not displaying symptoms. 

The bill also gives the New York Department of Labor the ability to issue guidance on these points.

An employee who is “deemed asymptomatic or has not yet been diagnosed with any medical condition and is physically able to work while” under a quarantine or isolation order (e.g., through remote work) is not eligible for paid sick or additional PFL or disability benefits under the COVID-19 provisions of the bill.

Exception for Voluntary Travel to Affected Regions

The bill provides an exception to the foregoing mandate where (a) the employee traveled to a level-two or three country as designated by the CDC,[3] (b) the travel was not part of the employee’s employment/directed by the employer, and (c) the employee was provided notice of the travel limitations prior to travel. An employee who, by virtue of their personal travel, remains ineligible for specific COVID-19 leave can apply employer-provided accrued leave or take unpaid sick leave for the duration of the quarantine.

Expansion of PFL and Disability Benefits

The bill expands the definitions of “family leave” under the State’s Paid Family Leave law and “disability” under the Disability Benefits Law to include COVID-19-related uses.  “Family leave” includes leave taken by an employee from work when subject to a quarantine or isolation order, or to provide care for a minor dependent child who is subject to a quarantine or isolation order. The definition of “disability” now similarly includes the inability of an employee to perform the regular duties of their employment or duties offered by an employer as a result of a quarantine or isolation period, upon exhausting sick leave. Additionally, the disability waiting period will be waived for these purposes.

Disability and PFL benefits may be payable concurrently to eligible employees upon the first full day of the unpaid period of a quarantine or isolation order, up to a maximum of $840.70 in PFL and $2,043.92 in disability benefits per week. The maximum weekly benefit for disability is the difference between the maximum weekly family leave benefit and the employee’s total average weekly wage from each covered employer, up to the maximum of $2,043.92.

Unemployment Insurance

The bill waives the waiting period for unemployment benefits due to a business closure for reasons related to COVID-19 or a mandatory order to close the employer.

Job Protection

The bill also provides protections for employees returning to work following COVID-19-related leave.  An employee must be restored to the position held prior to any leave, with the same pay and other terms and conditions of employment.  It also prohibits discrimination or retaliation against employees who have taken leave. 

Interplay with Potential Federal Leave Law

The bill provides a potential carve-out in anticipation of the passage of a Federal law providing sick leave and/or employee benefits to employees related to COVID-19 absences. As reported in Part II and Part III of our “Paid Leave and Coronavirus” series, the House of Representatives recently passed the Families First Coronavirus Response Act (“HR 6201”), which as of this writing is pending in the Senate.

If HR 6201 is passed in its current form, or a similar Federal law is enacted, then the provisions in the COVID-19 leave provisions under the New York law (including paid sick leave, paid family leave, and benefits due to disability) would not be available unless the leave provisions under the New York law provide sick leave and/or benefits in excess of the benefits provided by the Federal law.  Where that occurs, employees will be able to claim the additional leave/benefits provided under New York law above the amount provided under Federal law. In other words, the employee would be able to receive federal leave benefits and any additional New York leave benefits.

As currently drafted, the paid family and medical leave and separate paid sick time mandates in HR 6201 are not applicable to private employers that employ 500 or more employees. Thus, any New York State employers with 500+ employees would be required to provide the benefits set forth under the New York law. Employers that are subject to both HR 6201 and the New York bill should anticipate potential complications when assessing how to coordinate federal and state leave mandates related to COVID-19 absences.

Mandatory Sick Leave:

The bill includes a comprehensive paid sick leave (PSL) law that was originally advanced by the Governor as part of his State of the State Address and FY 2021 Executive Budget.  The PSL law would create a new Section 196-b of the New York Labor Law (NYLL).

Here are some of the highlights:

• Effective Date: The sick leave portion of the bill will be effective 180 days after enactment. This would land in mid- to late-September 2020 if the bill is signed by the end of this month.
• 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 time 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 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 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.
  • 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: 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 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 the employee to avail themselves or a covered family member of services or assistance in connection with certain absences related to domestic violence, a sexual offense, stalking, or human trafficking, as those terms are defined under New York law.

• 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 request, 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 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 PSL upon separation of employment.

Employer Takeaways:

Further guidance by the New York Department of Labor and Workers’ Compensation Board is expected.  In the meantime, here are some steps for employers to consider:

• Consult Seyfarth’s COVID-19 Resource Center for updated information regarding the rapidly evolving COVID-19 situation and its impact on the workplace.
• Review existing workplace policies relating to a host of issues, including travel, work from home, paid sick leave, paid family leave and other leave policies, and assess the potential effect of the new New York legislation on those policies.
• Consider issuing a separate policy addressing sick leave, paid family leave, and/or disability benefits for employees subject to mandatory or precautionary orders of quarantine or isolation related to COVID-19. Any such policy should also include notice of the travel health prohibitions and the limitations for benefits if such travel is undertaken by the employee.
• 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 COVID-19 and 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 HR 6201 and paid leave requirements generally. To stay up-to-date on COVID-19 developments, click here to sign up for our daily digest. 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 benenfits.

[2] Today, across 41 federal, state, and local jurisdictions, there are 43 private employer-provided paid time off mandates either in effect or scheduled to go into effect in the coming months (this list includes the new Colorado COVID-19 emergency paid sick leave mandate): (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) Oregon; (13) Rhode Island; (14) Vermont; (15) Washington; (16) San Francisco, CA; (17) Washington, D.C.; (18) Seattle, WA; (19) Long Beach, CA (hotel-specific law); (20) SeaTac, WA (hospitality and transportation industry-specific law); (21) New York City, NY; (22) Los Angeles, CA (1 general law 1 hotel-specific law); (23) Oakland, CA; (24) Philadelphia, PA; (25) Tacoma, WA; (26) Emeryville, CA; (27) Montgomery County, MD; (28) Pittsburgh, PA (effective date was March 15, 2020); (29) Austin, TX (delayed; ongoing litigation); (30) Santa Monica, CA; (31) Minneapolis, MN; (32) San Diego, CA; (33) Chicago, IL; (34) Berkeley, CA; (35) Saint Paul, MN; (36) Cook County, IL; (37) Duluth, MN; (38) San Antonio, TX (delayed; ongoing litigation) (39) Westchester County, NY (1 sick leave law, 1 safe leave law); (40) Dallas, TX; and (41) Bernalillo County, NM (PTO law). This list does not include state and local paid family and medical leave programs.

[3] Currently, the following locations that have a Level 3 Travel Health Notice at this time include: China; Iran; South Korea; Europe (Schengen Area): Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, Switzerland, Monaco, San Marino, Vatican City; and United Kingdom and Ireland: England, Scotland, Wales, Northern Ireland, Republic of Ireland. At the time of this article’s publication, it does not appear that there are any specific countries with a Level 3 Travel Health Notice regarding COVID-19.