In the latest paid leave law development out of New York, the New York City Council amended the City's Earned Safe and Sick Time Act (ESSTA) to create a private right of action.

The new law becomes effective March 20, 2024. With the increase in potential exposure that comes with private causes of action, the time is now for New York City employers to ensure they are in compliance with the ESSTA, especially in light of rule changes that went into effect on October 15, 2023 (the “October 2023 rule changes”).

The New Private Right of Action

On January 19, 2024, Int. 0563-2022 was returned unsigned by Mayor Eric Adams, resulting in the bill becoming law. The new law amends Section 20-924 of New York City’s administrative code to grant a private right of action to employees alleging violations of the ESSTA. Employees will have two years from the date they first knew (or should have known) about the alleged violation to file a lawsuit.

Previously, employees seeking redress for alleged violations of the ESSTA were limited to submitting administrative complaints to the NYC Department of Consumer and Worker Protection (DCWP). Now, any person alleging a violation of the ESSTA may commence a civil action in court to seek redress directly. Employees who prove a violation of the ESSTA may be awarded the same relief as in an administrative action, specifically:

• For each instance of safe/sick time taken by an employee but not compensated properly by the employer: either (i) three times the wages that should have been paid pursuant to the ESSTA (i.e., treble damages) or (ii) $250, whichever is greater.
• For each instance of safe/sick time requested by an employee that was (i) unlawfully denied by the employer and not taken by the employee, (ii) unlawfully conditioned upon a requirement that the employee search for or find a replacement worker prior to usage, or (iii) unlawfully subjected to a requirement that the employee work additional hours to make up for the original hours for which the employee was scheduled, without the mutual consent of the employer and employee: $500.
• For each instance of retaliation and interference as outlined under 20-918 (excluding unlawful discharge from employment): full compensation for wages and benefits lost, plus $500 and equitable relief as appropriate.
• For each instance of unlawful discharge from employment: $2,500; full compensation, including wages and benefits lost; and equitable relief, including reinstatement, as appropriate.
• For each employee covered by a policy that does not provide or allow for the use of safe/sick time in accordance with the law: $500.

In addition, prevailing employees may recover other injunctive and declaratory relief, attorneys’ fees and costs, and any other relief as the court deems appropriate.

Employees are not required to file an administrative complaint about alleged violation(s) of the ESSTA with DWCP prior to commencing a lawsuit in court. An employee may, however, file both an administrative complaint and a civil action.

While the new law attempts to address scenarios where a dual filing occurs, many questions still remain. We do know that if an employee commences a civil action after filing an administrative complaint with DWCP alleging the same violation(s) of the ESSTA, the agency will stay its investigation until the civil action is either withdrawn or dismissed without prejudice. However, it is unclear when DWCP must be informed of such an action, who has the burden of sharing that information, and what penalties may exist for filing to make that disclosure. Upon notice of a final judgment or settlement in the civil action, DWCP will dismiss the complaint unless it determines the complaint alleges a violation not resolved by such judgment or settlement. However, an employee who complained to DWCP and also commenced a civil action must notify DWCP within 30 days after the time for any appeal of the lawsuit has lapsed that the civil action has been closed, whether by withdrawal, dismissal, settlement, or judgment.

NYC Employers’ Obligations Under the ESSTA

Given these additional enforcement provisions, compliance with the ESSTA is more critical than ever. As a reminder, employers must consider their ESSTA compliance in light of the October 2023 rule changes. Many of the October 2023 rule changes adopted were in line with amendments initially proposed in November 2022, as previously reported here, and to align with changes to the City law following the adoption of the New York State Paid Sick Leave law (the “NYS Sick Law”).

ESSTA Accrual

Under the ESSTA (as well as the NYS Sick Law), covered employers must provide their New York City employees with “sick and safe” leave on either an accrual (one hour per every 30 hours worked) or front-loaded basis. The amount of leave, however, depends on the size of the employer and, if the employer has four or fewer employees, the employer’s revenue:

• employers with 100 or more employees are required to provide employees with up to 56 hours of paid leave each year;
• employers with five to 99 employees are required to provide up to 40 hours of paid leave each year; and
• for employers with four or fewer employees, those with $1 million or more net income are required to provide 40 hours of paid leave, whereas those with less than $1 million net income are required to give 40 hours of unpaid leave.

Employer size is based on the highest number of employees nationwide during the calendar year. The count includes part-time employees (regardless of the number of days a week they work), jointly employed workers (who must be counted by each joint employer, regardless of whether the employee is included on the joint employer’s payroll), employees on a leave of absence (whether paid or unpaid), and employees on disciplinary suspension (as long as an employer has a reasonable expectation that the employee will return to active employment).

Unlike other jurisdictions’ safe and sick leave laws, the ESSTA prohibits new hire waiting periods; rather, employees must begin accruing safe/time upon commencement of employment and must be permitted to use the leave as soon as it accrues. Unlike the NYS Sick Law, under the ESSTA, employers may select the minimum increment for safe/sick time use; however, the initial minimum increment cannot exceed four hours per day (and 30-minute increments thereafter). An employer that sets a minimum increment must include it in the written safe/sick time policy required under the ESSTA.

ESSTA Qualifying Uses

Covered employees may use ESSTA leave for the following purposes:

• for their own or for a covered family member’s medical diagnosis, care, or treatment of a mental illness, physical illness, injury, or health condition, or need for preventive medical care;
• for closure of the employer’s business or to care for a child whose school or childcare closed following the order of a public health emergency by a public official; and/or
• for the employee or the employee’s covered family member to seek assistance related to family offense matters, sex offenses, domestic violence, stalking, or human trafficking.

Notice and Documentation

Employee Notice of Need for Leave

Employers may require employees to provide notice of the need to use ESSTA leave up to seven days in advance if the need is foreseeable. For leave that is not foreseeable, employers may require notice as soon as practicable. The ESSTA defines “foreseeable leave” as “when the employee is aware of the need to use safe/sick time seven days or more before such use.” The need for leave arising less than seven days ahead is thus deemed unforeseeable.

An employer’s notice requirements must be reasonable and stated in a written policy. Examples of permissible procedures include a designated phone number; a uniform call-in procedure; a designated email address; or a software scheduling system, as long as the employee has access to the system on non-work time and has been appropriately trained on it and given written instructions on how to use it.

Documentation of Need for Leave

The documentation employers may require to verify an employee’s need for sick/safe leave is limited to (i) an attestation from a licensed medical provider supporting the existence of a need for safe/sick time, the amount of safe/sick time needed, and a date that the employee may return to work, or (ii) an attestation from the employee of their eligibility for the use of safe/sick time. Employers may not require employees to disclose the nature of any medical condition (either the employee’s or that of a family member) or of any domestic violence, sexual offense, or stalking matter necessitating the need for leave. In addition, employers must reimburse employees for all reasonable costs or expenses incurred by obtaining the required documentation.

Carryover

The question of how to manage unused sick/safe leave at year-end is one glaring distinction between the NYS Sick Law and the ESSTA. The ESSTA has long permitted employers to place a cap on the amount of accrued, unused sick/safe time to carry over to the following calendar year and allowed employers to avoid carryover when frontloading. When the NYS Sick Law was adopted in 2020, employers sought guidance from the State on whether carryover would be treated in a similar manner to the ESSTA, as the State’s law did not explicitly allow for limitations on carryover (both for accrual or frontloading policies). Amendments to the ESSTA in 2020, which we discussed here, retained the carryover caps, and we awaited guidance from the State on whether it would follow NYC’s path.

In December 2021, the State declined to place any caps on carryover, even when sick/safe time is frontloaded. Despite the State’s interpretation, the October 2023 rule changes maintain the City’s position that carryover caps are permissible under the ESSTA. The State has not addressed this inconsistency since the adoption of the October 2023 rule changes.

Notwithstanding any carryover obligations, both the ESSTA and the NYS Sick Law permit employers to implement an annual usage cap equivalent to their applicable annual accrual cap (i.e., 40 or 56 hours).

What Employers Should Do Now

To mitigate the risks of being sued for violating the ESSTA, New York City employers should take steps to make sure that they are providing their employees with paid sick leave in accordance with the law. To that end, the following actions are recommended:

• Review leave-related policies and procedures to ensure compliance with the ESSTA in light of the finalized October 2023 leave changes and minimum policy requirements.
• Ensure that human resources personnel are trained and up to date on current ESSTA requirements, including administration of leave policies and recordkeeping obligations.