This week, New York State issued guidance and an FAQ document regarding the State’s new paid sick leave law (“NYPSL”).  As a reminder, New York State enacted statewide paid sick leave requirements for employers under Section 196-b of the New York Labor Law and they took effect on September 30, 2020.  We provided an overview of the new NYPSL requirements for New York State employers in our previous post. 

These permanent paid sick leave requirements (which differ from the COVID-19 quarantine leave measures that New York State enacted earlier this year) require New York employers to provide all employees with sick leave (which varies based upon the employer’s size), and grant employees the ability to use accrued sick time starting January 1, 2021.

The new guidance issued by New York State provides some clarity on select NYPSL topics, but leaves a number of questions unresolved.  We provide a summary of key new information from the guidance for employers below:

Measuring Employer Headcount:

• The amount of sick leave that employers must provide – and whether it is paid – is determined by the employer’s total number of employees (e.g., an employer with 100 or more employees must provide 56 hours of paid sick leave).
• The guidance indicates that the employer’s headcount must be measured by calendar year (January 1 – December 31). 
• The guidance does not make clear, however, whether:
  • employers are to count only New York employees or all employees when measuring headcount for purposes of the law.
  • accrual and use requirements are impacted if and when they cross a headcount threshold during the year – whether above or below that threshold. 

Accrual & Use:

• Unlike the true January-December calendar year used to measure employee headcount, the guidance confirms that employers may create their own “calendar year” (any 12-month period) when determining employees’ use and accrual of leave (e.g., apportioning accrual and use using a July-June fiscal year).
• The guidance further provides that employees who telecommute are covered by the law only for the hours they are physically working in New York State.  The guidance does not address whether out-of-state employers with employees working on temporary assignments (e.g., business trips) are eligible for sick leave accrual and use.  

Employers’ Policies & Use Limitations:

• The guidance also confirms that employers must allow employees to carry over accrued but unused sick leave at the end of the employer’s calendar year, but allows employers to institute a cap on employees’ use of such time (e.g., allowing employees to use only 56 hours of time each calendar year regardless of how much time the employee has accrued). 
• Importantly, the guidance, however, indicates that employers that choose to implement use caps must notify employees in writing, prior to the leave being earned, of any restrictions affecting the employees’ use of leave, including any limitations on leave increments.
• The guidance did not comment on whether employers that frontload sick leave to employees at the beginning of the calendar year – which the guidance deems an acceptable alternative to hourly accrual – and that also utilize use caps, must also allow employees to carry over unused frontloaded time at the end of the calendar year instead of requiring that employees forfeit that unused time.
• The guidance also does not specify how much notice an employee must give prior to using sick leave, although it does require that an employee make an oral or written request to the employer prior to using the accrued sick leave, unless the employer permits otherwise.  As a best practice, employers should consider adopting a policy requiring employees to provide a certain amount of notice (and employers in New York City may require 7 days’ notice) unless the need for leave is unforeseeable, in which case an employee should be required to give notice as soon as practicable.  Such policies should also specify the manner in which the employee should provide such notice. 

Rate of Pay:

• Employees who are paid on a commission, flat rate, or other non-hourly basis accrue sick leave based upon the actual length of time the employee spends working.
• If an employee is paid at different rates for different tasks, employers must pay out sick leave at the weighted average of those rates by taking the total regular pay divided by the total hours worked in the week similar to how it would make an overtime calculation.

Payment Upon Termination:

• The guidance provides that employers are not required to pay employees for any accrued but unused sick leave upon termination, unless required by the employer’s own written leave policy.  As a best practice, employers should maintain a written policy stating whether accrued but unused sick leave will be paid on termination, particularly where such unused time will be forfeited and not paid out at separation.

Recordkeeping:

• New York employers must keep sick leave records for six years, and must include in such records the amount of sick leave accrued and used by each employee on a weekly basis.

Penalties:

• The guidance clarifies that an employer’s failure to provide sick time is the equivalent of a failure to pay employee wages under the New York State Labor Law.  Employers that fail to comply with the law may be subject to civil or administrative actions and/or criminal penalties, including but not limited to, an order assessing the full amount of the wage underpayment plus liquidated damages, as well as civil penalties amounting to double the total amount due.

Miscellaneous:

• Bereavement - The guidance makes clear that employers do not have to permit employees to use sick leave for bereavement situations.
• Seasonal Workers – Seasonal employees are eligible for sick leave, and if seasonal employees maintain an ongoing employment relationship with their employer from year to year, they must also maintain their leave accruals through these breaks in employment.
• Collective Bargaining Agreements - Collective bargaining agreements (“CBAs”) entered into on or after September 30, 2020 may provide for different leave benefits than those required under the NYPSL, so long as such benefits are “comparable benefits for the employees” to NYPSL benefits.  Such CBAs must explicitly acknowledge these comparable benefits, and must identify N.Y. Labor Law Section 196-b (the NYPSL provisions) in doing so. 

Parting Thoughts:

New York employers should take time to review their current sick leave policies to ensure alignment with NYPSL requirements, work with payroll providers to adequately account for any new leave entitlements and recordkeeping requirements, and train human resource professionals and management regarding any policy changes. 

Employers that are subject to local sick leave laws, including those in effect in New York City and Westchester, should keep in mind that they have additional or difference compliance obligations under those laws.  New York City also recently amended its paid sick leave law, but it has not yet issued updated interpretive guidance.  We are standing by and will post an update here once that guidance is released as it may require further changes to employer sick leave policies.