Amended Regulations for NYC Earned Sick Time Act Imposing New Recordkeeping and Policy Mandates Become Effective March 4

by Schnader Harrison Segal & Lewis LLP
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Employers covered by New York City’s Earned Sick Leave Act will be expected to comply with new requirements and will be subject to a re-interpretation of parts of this law when newly published regulations take effect on March 4. These new rules, announced by the New York City Department of Consumer Affairs (“Department”), which also enforces the Act, can be found here.

In brief, among other things, these amended regulations:

  • Require distribution or posting of written policies and prescribing their content
  • Specifically address joint employment and the responsibilities of temporary help firms
  • Permit employers to set a minimum number of hours employees must take for each use of sick leave
  • Exclude wage supplements from the rate of pay during sick leave
  • Mandate substantial recordkeeping obligations and direct that an adverse inference be raised for failure to maintain records in some circumstances
  • Impose a $500 penalty for not responding to or cooperating with the Department
  • Direct that failure to allow employees to accrue or use earned sick time will entitle all affected employees to receive their earned sick leave credit or 40 hours of sick leave credit if earned leave cannot be calculated
  • Set accrual methods for certain categories of employees
  • Permit discipline, including discharge, of employees who abuse paid sick leave
  • Address retaliation by adopting prevailing definition of adverse employment action and directing that a causal connection may be established indirectly, such as by the timing of an adverse action in relation to the use of paid sick time

Takeaways

However well-intended the Earned Sick Leave Act may have been, from the outset it imposed onerous mandates on all New York City employers, as even those with fewer than five employees have been required to adhere to rigorous recordkeeping and notification requirements. The amended regulations add another layer of detail to that mandatory recordkeeping, and require even the smallest of employers to prepare, produce for its employees, and follow, a written policy explaining how paid sick time eligibility is calculated, how it works, what limitations are placed on its use, any documentation requirements the employer imposes to confirm its proper use, how the employer intends to discipline employees for misuse of paid sick time, a description of the policy on carrying over unused sick time, any forms employees are required to use, and other terms and conditions. In addition to the policy, every employer, however small, is required to provide all employees, upon hire, a separate Notice of Rights under the Earned Sick Leave Act, both in English and in the employee’s other native language. While the Department has made a model Notice available, the Act gives New York City employers still another document that must be provided and, if necessary explained, at the time of hire. This will not be a simple task for the small employer that may not have written policies, is unfamiliar with the language and concepts of human resources administration, and may be ill-equipped to explain, much less adhere to the policies that it seemingly would be expected to explain to a new hire.

Nevertheless, all employers are required to comply with the administrative details. Based on the Department’s April 2015 self-assessment of its enforcement of the Act at the close of its first year in force, employers that fail to master the details will pay a price. The Department reported that of 472 complaints it received that first year, “61 percent stem from an employer not providing DCA’s written Notice of Employee Rights, as required by law.” It further reported that 40% of the remaining complaints focused on other administrative deficiencies, half of which concerned inadequate policies (the full NYC Paid Sick-Leave Law – First Year Milestones report is available here). Thus, it appears that the largest and smallest employers will be in the same boat on March 4: that failure to publish a policy covering every detail listed in the amended regulations, failure to provide a proper Notice of Rights (even if an adequate policy was distributed or posted), and similar errors in administration and paperwork, will be the primary subject of the Department’s attention as the amended regulations become effective.

For all employers, but especially for the smallest, after March 4 the devil will be in the details.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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