CLIENT UPDATE

Putney, Twombly, Hall & Hirson LLP
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March 25, 2016

New Rules for Employers under New York City’s Earned Sick Time Act

New York City’s Department of Consumer Affairs (“DCA”) adopted a new set of rules (“Rules”) to clarify New York City’s Earned Sick Time Act (“Act”).  These Rules went into effect on March 4, 2016.  For further information on the Act, see our Client Alert, available at http://www.putneylaw.com/cu_030614.html.  The Act requires employers with five or more employees to provide up to forty hours of paid sick time per calendar year to those employees working in New York City.  The Rules have provided the following additional guidance and requirements for employers to comply with the Act.

1.         Calculating Business Size

For employers that have been operating for less than a year, the business size is determined by counting the number of employees working for the employer for compensation per week.  If the number of employees fluctuates between fewer than five and five or more, then business size for a new employer is determined by the average number of employees per week during the 80 days immediately preceding the date the employee uses the sick time.

For employers that have been operating for one year or more, the business size is determined by counting the number of employees working for the employer per week at the time the employee uses sick time.  If the number of employees fluctuates between fewer than five and five or more at least three times in the most recent calendar quarter, then business size is determined by the average number of employees per week in the previous calendar year. 

2.         Joint Employers  

Where two or more employers are found to exercise “some control over the work or working conditions of an employee,” the employer is deemed to be a joint employer under the Act.  Every joint employer must count each joint employee for purposes of determining if the Act applies.  For example, an employer that has three permanent employees and three workers from a temporary help agency is deemed to have six employees, and is obligated to comply with the Act.

3.         Minimal Increments and Fixed Intervals for the Use of Sick Time

The Act already provided the employer with the right to set a minimum increment of up to four hours per day for the use of sick time, as long as such increments are reasonable under the circumstances.  The Rules expanded that right so that employers may set fixed intervals of 30 minutes or less for the use of sick time, and may require fixed start times for such intervals.  For example, an employer may require an employee to use not less than four hours of sick time in a day, and that sick time starts on the hour or half-hour.

4.         Employee Notification of Use of Sick Time

Employers are prohibited from having a sick leave policy that requires an employee to appear in person at a worksite or deliver any document to the employer prior to the use of sick time when the need to use sick time is not foreseeable.

5.         Written Sick Time Policies

Employers must have a separate written policy on sick time that is distinct from the Notice of Employee Rights under the Act.  Employers must distribute or post written policies.  Such policies should include: (1) the employer’s method of calculating sick time, such as whether the amount of sick time is frontloaded or accrued; (2) how sick time may be used, including any limitations or conditions the employer places on the use of sick time (e.g., notice requirement; requirements to provide documentation; minimum increments; and consequences of misusing sick time); and (3) the employer’s policy on carry-over of unused sick time at the end of the calendar year. 

In addition, a successor employer must provide employees with its written policy on sick time at the time of sale or acquisition, or as soon as practicable.

6.         Employer Recordkeeping

Employers must maintain, for a period of three years, records demonstrating compliance with the Act.  Such records must include: (1) the employee’s name, address, phone number, start date and end date (if any) of employment, rate of pay, and whether the employee is exempt from overtime under the New York Labor Law; (2) the hours worked each week by the employee, unless the employee is exempt from overtime pay and works more than 40 hours per week; (3) the date and time for each instance of sick time used by the employee, and amount paid for each instance; (4) any change in the material terms of employment specific to the employee; and (5) the date the Notice of Employee Rights was provided to the employee and proof it was received by the employee.

7.         Enforcement and Penalties

An employer’s failure to comply with the Act’s requirements could result in a $500 penalty for the first violation, and could include liability on a per-employee basis rather than a per-violation basis.  An employer that fails to provide sick time as required under the Act will be required to provide 40 hours of sick time to the employee, or, if known, the number of hours of sick time the employee should have accrued, not to exceed 80 hours.

8.         Accrual, Hours Worked, and Carry Over for Certain Employees

Employers must calculate accrued sick time and hours worked by certain methods described in the Rules for employees with: (1) on-call shifts; (2) piecework or commission pay; (3) or indeterminate shift lengths.

9.         Employee Abuse of Sick Time

The employer has the right to take disciplinary action, including termination, against an employee who abuses sick time.  The Rules explain that sick time abuse may include a pattern of using sick time on or adjacent to weekends or holidays; using sick time when other leave has been denied; or using sick time to avoid undesirable shifts or assignments.

10.       Retaliation

The Rules provide a broad definition of prohibited retaliation.  Specifically employers may not take “any act” that is “reasonably likely to deter an employee from exercising rights guaranteed” under the Act.

Takeaway for Employers

Employers with employees working in New York City should work with counsel to ensure compliance with both the Act and the Rules.  In particular, covered employers must develop and distribute or post written policies on sick time, and maintain timekeeping records for employees.   Employees should also consider training front-line managers on compliance and avoidance of retaliation.  Any sick time policies and practices that were developed to be in compliance with the Act should be reviewed and updated to ensure compliance with the new Rules.

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If you have any questions regarding the New York City Earned Sick Time Act and the new Rules, please do not hesitate to contact us.