Recently, Mintz Levin held a seminar in New York City that we designed to address some of the major challenges employers are facing in the New Year.  Our program contained segments on New York City’s paid sick leave law, effective management of HR Issues, the Affordable Care Act, employment practices liability insurance coverage, and workplace privacy.  Over the next few weeks we will be posting a series of entries following up on the critical workplace issues raised during these segments.

First up: New York City’s paid sick leave law.

For this segment, we were fortunate enough to be joined by Julie Menin, the Commissioner of the NYC Department of Consumer Affairs, Marla Tepper, the Department’s General Counsel, and Jill Maxwell, an Agency Attorney in the Department’s Paid Sick Leave Division.  Ms. Menin presented on the Department’s enforcement efforts, while Ms. Tepper and Ms. Maxwell later answered attendee questions.  Here is a brief summary of our takeaways from their informative presentation.

Focused on a Smooth Implementation

Their overriding message was clear: they are “focus[ing] very hard on making the implementation [of the paid sick leave law] as smooth as possible,” so that it’s easier for companies to do business in the City.  It’s hard to challenge them on this point.

While the law obviously adds another regulatory burden on NYC employers, the Department has launched a campaign aimed at ensuring that employers understand, and can easily comply with, the law.  As the Commissioner pointed out, they have populated their website with extensive information about employer compliance obligations – and they update it regularly.  For example (as of this writing), the top of the home page addresses employer obligations to provide paid sick leave in connection with the recent snow/ice storms.  In addition, the Department:

• Recently released a document entitled “Rules for Sick Leave Policies” that is designed to help employers draft a sick leave law-compliant policy.

• Posts and continually updates a 25-page FAQ document that addresses more than just employer general compliance questions; it also delves into some of the trickier compliance scenarios.

• Released rules interpreting the paid sick leave law.  (Note: The General Counsel noted during the presentation that the Department anticipates issuing additional rules clarifying staffing agency compliance obligations in the near future.)

• Offers a sick leave timekeeping tool to help employers track hours worked and sick leave used, and which automatically calculates accruals and carryovers.

• Released model forms, including an “Employee Verification Regarding Authorized Use of Earned Sick Leave,” “Employee Notification of Intention to Use Earned Sick Leave,” and “Employee Request to Make up Missed Work as Alterative to Using Earned Sick Leave.”

• Provides employers with various avenues in which to contact the Department to seek help with compliance questions, including by e-mail and phone and also by hosting online live chats and in-person office hours.

Effective Resolution of Complaints Through Mediation

Commission Menin confirmed that most of the complaints the Department has received thus far concern a failure to provide employees with any notice about their rights.  She also noted that many employees have complained about retaliation.  But she further noted that the Department has been able to “resolve the vast majority of the complaints . . . through mediation,” which, she says, is “best for the employee and it’s best for the employer.”

In fact, according to a Crain’s New York Business article, the Department has received 355 complaints in the first six months after the law became effective, 245 of which the Department had under its jurisdiction.  More than 1/3 of the complaints came from individuals employed in the professional services sector and almost 20% came from those working in retail.  Restaurants were the subject of 10% of the complaints.  The Department has resolved 70 of those complaints successfully through mediation.  The remaining complaints are currently in mediation or under investigation, while at least two employers and possibly five have received notices of hearing.

Carryover and Verification Are Two of the Big Compliance Issues

Commissioner Menin identified two issues where the Department has spent considerable time addressing employer questions – accrued sick leave carryover and sick leave use verification.

First, regarding carryover, the Commissioner made it clear that employers do not have to pay out accrued but unused sick leave from the prior year as long as they front load forty new accrued sick leave hours on the first day of the next calendar year.  Of course, they can pay those unused amounts out if they want to, but there is no obligation to do so.  In the alternative, employers can permit employees to carry over previously accrued but unused sick leave into the following calendar year, but she also made it clear, that the employer can cap the amount of accrued sick leave at 40 hours in any calendar year despite the carried over amounts.

Second, Commissioner Menin and General Counsel Tepper addressed concerns over employee abuse by confirming that employers cannot ask for medical documentation when an employee is on sick leave for three or less days of work.  And if the employer does ask for documentation after three days, they can only ask for limited information.  They encouraged employers to use the model verification form available on the DCA’s website.  And General Counsel Tepper noted that despite receiving a lot of questions on this issue, she hadn’t heard of any actual instances of abuse to date and didn’t expect it to be an issue as long as employers complied with their obligations.

Respectfully, we do believe that employers have real concerns over this issue because the law and its interpreting rules emphasize employee privacy over employer concerns of abuse or, stated somewhat differently, it can be argued that it trusts employees to self-police over an employer’s ability to effectively monitor abuse.  Quite simply, it is difficult for employers to stop employees from using sick leave for impermissible reasons – certainly in isolated instances and especially when they are out for less than three days.  The Department says that even though employers cannot demand certain information to verify sick leave use, they can and should look for “patterns of abuse” or other signs of misuse before resorting to discipline (i.e. where the employee is “routinely” denied vacation and then takes sick leave).  Time will tell if this materializes into a problem that the Department will be forced to address, but for the moment, as far as we are aware, nothing prohibits employers from taking disciplinary action (including termination) against an employee who uses sick leave for impermissible reasons – even in an isolated instance – where the employer has sufficient evidence of the misuse.

Conclusions

We appreciated the time Commission Menin, General Counsel Tepper and Agency Attorney Maxwell spent with us.  We walked away from the presentation with a firm belief that the Department of Consumer Affairs has made a real effort to clarify compliance obligations for employers and to resolve employee complaints effectively and efficiently.  We still think however, that there is work to be done on addressing problems of employee abuse.

The New York City Earned Sick Time Act will have its first birthday in April and it’s quite clear that it’s here to stay.  We encourage you therefore, to make sure that your sick leave policies comply with the law’s requirements, or if you don’t have a sick leave policy, to implement a compliant one as soon as possible.