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March 6, 2014

New York City Mandatory Sick Leave Law

Effective April 1, 2014, the New York City Earned Sick Time Act (the "Act") will require most employers to provide employees working in New York City with five (5) mandatory paid and/or unpaid “sick" days.  As discussed below, leave is not limited to days when the employee is too ill to work. 

Who Is Covered?

The paid leave provisions apply to employers with five (5) or more employees.  Employers with fewer than five (5) employees (referred to herein as “small businesses”) must provide at least five (5) unpaid sick days.  Whether paid or unpaid, the employee taking the leave is protected against discharge.

While employer size is to be determined by counting all of an employer’s employees, regardless of whether all such employees are located in New York City, only employees working in New York City are entitled to leave.  Full-time, part-time and temporary employees are considered “employees” for purposes of determining coverage, but only a full-time or part-time employee who is employed for more than 80 hours in a calendar year is entitled to sick time under the Act.  Independent contractors are expressly excluded. 

Violations will result in a civil penalty payable to New York City not to exceed $500 for the first violation, with subsequent violations resulting in penalties of up to $1,000 per occurrence.  In addition to these civil penalties, employees may be entitled to a minimum of $250 in damages.  There is a six (6) month grace period during which civil penalties will not be assessed to covered employers with fewer than twenty (20) employees, or for covered employers in the manufacturing sector.  The Act designates the Department of Consumer Affairs as the agency responsible for enforcement of the Act is.  However, the Act grants the Mayor the authority to designate a different agency to enforce the Act.

Accrual, Usage & Carryover

Employers must provide up to 40 hours of paid sick leave per year (or unpaid leave, for small businesses).  Leave under the Act accrues at a minimum rate of 1 hour for each 30 hours worked, capped at 40 accrued leave hours in a calendar year.  For purposes of this accrual, salaried, exempt employees are presumed to work 40 hours per week for purposes of accrual, unless their regular work week is less than 40 hours, in which case sick time accrues based upon that regular work week.

Employees begin to accrue sick leave at the commencement of employment and may begin to use their accrued sick leave on the 120th day after the commencement of employment or the 120th day after commencement of the Act, whichever is later.  Employers may require employees to utilized accrued sick leave in increments of four (4) hours or less.

Employers must permit employees to carry up to 40 hours of unused sick leave over from one calendar year to the next.  The law permits employers and employees to agree to eliminate carry-over if the employer pays the employee for accrued but unused sick leave at the end of the calendar year.  The employer must then allow accrual to recommence on the first day of the new calendar year.  “Calendar year” does not necessarily mean January 1 to December 31; it can be any “regular and consecutive twelve month period, as determined by an employer.”

The Act does not require any employer to pay out accrued sick time that has not been used upon the employee's separation from employment, whether by involuntary termination, resignation, retirement or otherwise.

Qualifying Absences & Employee Obligations

Employees are entitled to use sick time for absences due to: (i) the employee's own mental or physical illness, injury or health condition, need for medical diagnosis, care or treatment, or need for preventive medical care; (ii) care of a family member needing such medical diagnosis, care, treatment or preventive medical treatment; or (iii) closure of the employee’s place of business due to a public health emergency (as declared by the commissioner of health and mental hygiene or the mayor) or to care for a child whose school or child care provider is closed due to a declared public health emergency.  The term “public health emergency” does not include severe weather conditions.  Family members include an employee’s child (biological, adopted, foster), spouse, domestic partner, parent (or individual who stands in loco parentis to the employee), grandparent, grandchild, siblings (including half-siblings, step-siblings, and adopted siblings) and the child or parent of an employee's spouse or domestic partner.  Employers are permitted to discipline employees who use sick time for unauthorized purposes.

Employers may require that employees provide reasonable notice of the need to use sick time.  For foreseeable leave, employers may require the employee to provide up to seven days of notice.  For unforeseeable leave, an employee may be required to provide notice as soon as practicable.  An employer can require an employee to provide written confirmation that the employee used sick time for a reason covered by the Act.  In addition, reasonable documentation signed by a licensed health care provider may be required but only for absences of more than three consecutive work days.  The law restricts employers from seeking information about the nature of the illness, except as permitted by other laws, such as the Family and Medical Leave Act (“FMLA”).  Employers may require that sick leave provided pursuant to Act run concurrently with FMLA leave.

Notice & Recordkeeping Requirements

Notice of rights under the Act must be issued to all current employees by May 1, 2014, and the notice of rights posters must be conspicuously posted.  Newly-hired employees must be given notice upon commencement of employment.  Notice of rights posters must be in English and the primary language spoken by the employee, provided that the Department of Consumer Affairs (or another delegated agency) has made available a translation of the notice in that language. While official notice posters have not yet been promulgated, we expect them to be available in advance of the Act’s effective date.

Employers must retain records pertaining to employees’ sick time for three (3) years.

Comparable Policies

Employers who already provide leave that is equivalent or better than that required under the Act are not required to provide additional sick time for their eligible employees.  Thus, an employer that provides 40 or more hours of paid leave, including vacation and personal days (or unpaid leave in the case of small businesses), will be deemed to satisfy the requirements of the Act provided the employer allows such leave to be used for the same purposes, upon the same conditions as provided for in the Act.    

Special Rules for Collective Bargaining Agreements

The Act does not apply to any employee covered by a valid collective bargaining agreement ("CBA") which (i) expressly waives the Act's provisions; and (ii) provides comparable benefits for the employee in the form of paid days off.  Such paid days off can be in the form of leave, compensation, employee benefits or a combination thereof.  Comparable benefits include, but are not limited to, vacation time, personal time, sick time, holidays, and premium rates. 

For employees covered by a CBA in effect on the date of the Act's effective date, the Act takes effect on the CBA's termination date.  Thus, any successor agreements will need to contain language specifically waiving the provisions of the Act. 

Take Away for Employers

All New York City employers whose employees are not governed by the limited exemption granted by a current collective bargaining agreement that provides comparable benefits to those required by the Act will need to ensure that their leave policies comply with the minimum requirements of the Act as of April 1, 2014.  Employers also need ensure that there is a reliable method to track each employee’s mandated accrual.    Employers with current collective bargaining agreements will need to address the subject of waiver in the next round of negotiations to ensure that they do not inadvertently create a situation where employees are able to “double dip” – use five (5) leave days under the Act in addition to comparable leave under the collective bargaining agreement.

We are available to discuss any questions or concerns you may have with respect to the New York City Earned Sick Time Act detailed herein and/or your sick time, leave and related policies.  As always, we will keep you apprised of further developments.