New York State has released guidance and FAQs on the Paid Sick Leave Law that became effective September 30, 2020
The guidance addresses covered employers and employees, rules for tipped employees, interaction with other laws, penalties for noncompliance, and more
The guidance does not address critical areas including limits of the carry-over provision, requests for documentation, and other issues
We previously reported the enactment of the New York Paid Sick Leave Law (NYPSL) as a part of New York State’s 2020–21 budget. While NYPSL will not become available to employees until January 1, 2021, the law technically went into effect on September 30, 2020. Now, nearly three weeks after the law’s effective date, New York State has launched a website with information on the paid sick leave law, including a Frequently Asked Questions (FAQs) document.
The seven-page FAQ document provides some helpful guidance but leaves employers with much more to be desired and several unanswered questions. At this point it is unclear whether the FAQ document is to be the only clarifying reference for employers or whether the state will release additional guidance.
What employees are covered?
The guidance confirms that all employees in New York State are covered under the paid sick leave law, regardless of industry, occupation, part-time status, overtime exempt status, or seasonal status. Also, there is no minimum length of service requirement, except that an employee must work at least 30 hours to earn the first hour of leave (unless the employee works for an employer that “frontloads” the leave).
Moreover, employees who telecommute are covered by NYPSL only for the hours when they are physically working in New York State, even if the employer is physically located outside New York State. Employers that have employees that typically work outside of New York State but occasionally travel to and through New York State will need to consider to how to track employee accruals of NYPSL.
What employers are covered?
New York Labor Law (NYLL) § 196-b (which codifies NYPSL) does not include a definition for “employer.” However, under NYLL § 190(3), employer is defined as “any person, corporation, limited liability company, or association employing any individual in any occupation, industry, trade, business or service. The term ‘employer’ shall not include a governmental agency.” Presumably, government agencies includes “public sector employers,” and therefore those employers are not required to comply with NYPSL. The FAQ document does clarify that nonprofit employers are covered by NYPSL.
NYPSL requires leave allotments to employers depending on the employer’s size, and in some cases, the employer’s net income. The FAQ states that employers with multiple locations within New York State should count all of their employees when determining how much leave they must provide to employees under NYPSL. However, the FAQ fails to clarify whether employers are required to count employees that work at locations outside of New York State.
Rules for tipped employees
Any employer who normally uses a tip allowance as a credit against the minimum wage requirements of their industry (e.g., in accordance with the Hospitality Industries Wage Order) cannot do so for employees’ accrued sick leave. The rate of pay must be consistent with the statutory minimum wage applicable to the employee.
Employers are not required to pay employees for lost tips or gratuities, but employers may not take a tip credit for leave time and must pay the employee their normal rate of pay or the applicable minimum wage, whichever is greater.
How does the carry-over provision work?
Sick leave that that an employee has not used carries over to the next calendar year. The FAQs notably do not clarify whether employers may institute any sort of cap on the amount of NYPSL that may be carried over. However, we do know that employers may limit employee use to the number of hours that the employee is entitled to use within any calendar year (i.e., 56 hours for employers with 100 or more employees and 40 hours for employers with 99 or fewer employees). Seasonal employees who maintain an ongoing employment relationship with their employer maintain their leave accruals through breaks in employment.
The FAQs acknowledge that this carry-over policy may result in an employee maintaining a leave balance in excess of the amount they are permitted to use in any calendar year, and goes on to claim that the benefit of this system is that when sick leave is carried over into a new calendar year, an employee is able to use it right away instead of waiting to accrue leave. This of course ignores the fact that certain employers may choose to frontload the accruals each year on January 1, in which case the employee would have the entire amount of leave to use on January 1 anyway.
Despite it appearing that the carry-over provision would effectively be meaningless for employers that frontload the leave, the FAQs do not state that there are any exceptions to the carry-over requirement. Also, the guidance as written seemingly imposes an administrative burden of continually tracking the unused leave in the employee’s bank in excess of the annual allotment and which an employee may never use.
Do you have to pay employees for any unused leave time?
Unless required by another agreement or policy, including the employer’s own written leave policy, employers are not required under this law to pay employees for unused sick leave at the end of an employment relationship.
Interaction with other laws
Westchester County law currently provides that domestic workers accrue sick leave at the rate of one hour for every seven days worked and earned and can use up to 40 hours of paid sick leave per year, regardless of the size of the employer. These benefits will continue to be available to domestic workers in Westchester County.
We notified you about the recent amendments to New York City’s paid leave law. The FAQs provide that New York City may continue to enforce the provisions of the New York City Paid Safe and Sick Leave Law to the extent that such provisions meet or exceed the standard or requirements for minimum hour and use set forth in the New York State Paid Sick Leave Law, as determined by the Commissioner of Labor.
The FAQs provide that an employee can only choose to use NYPSL during New York Paid Family Leave (NYPFL) if the employer allows it. Taking NYPSL at the same time as NYPFL may allow the employee to receive their full salary for all or part of the leave. However, an employee cannot receive more than their full wages while receiving PFL benefits.
NYPSL operates independently from other state and federal leave requirements and must therefore be paid in addition to any other state or federal leave entitlements. For example, if an employee or an employee’s family member suffers from a serious health condition, employers still have an obligation to properly administer the Family and Medical Leave Act (FMLA).
Can employees be disciplined for abusing NYPSL?
The FAQ states that an employer may take disciplinary action, up to and including termination, against an employee who a.) uses leave for purposes other than those provided for under the law, or b.) lies to their employer in connection with taking such leave.
Unless additional guidance provides clarification in the future, employers should not ask employees for documentation to substantiate the NYPSL beyond asking for the dates the employee was out of work due to a qualifying reason. The FAQs also do not specify any advance notice or time period requirement for requesting the leave. Accordingly, based on what we know now, it appears that employers may not demand employees provide any sort of notice prior to taking NYPSL. The guidance does provide that the employees may request the leave orally or in writing.
What are the penalties to employers for noncompliance?
Under NYLL, failure to provide employee benefits such as sick leave is equivalent to a failure to pay employee wages. Should an employer fail to provide their employees with sick leave as required under the law, they may be subject to civil/administrative actions and/or criminal penalties, including but not limited to an order assessing the full amount of the wage underpayment, 100 percent liquidated damages, and civil penalties in an amount up to double the total amount to be due.
What about collective bargaining agreements?
To satisfy the requirements of this law, any agreement entered into after September 30, 2020 must specifically reference Labor Law Section 196-b. The New York State Department of Labor (DOL) recommends that the “comparable benefits for the employees” be explicitly identified and labeled as such in the agreement to avoid confusion or misunderstanding.
What should employers do now?
Given the various ambiguities that remain in NYPSL despite the FAQs, employers may attempt to modify their policies for compliance with the understanding that they may need to be reworked if and when the state releases further guidance. Additionally, employers that will be using the “accrual method” instead of frontloading the leave need to track employee accruals of NYPSL effective September 30, 2020 and maintain payroll records relating to the same.
If you or your team have any questions about this law, or require counsel regarding employee policy revisions that may be necessary, please contact: