On the evening of Oct. 19, 2020, New York State released long-anticipated guidance on the state's new Paid Sick Leave Law, or "PSL." The new law is not limited to coronavirus-related situations. It is instead a new, permanent sick leave mandate for almost all businesses and non-profit employers in New York State. The guidance is available here.
The State Legislature passed the new law in April, as part of the state's annual budget bill. Our earlier legal alert immediately following the law's passage is available here.
The law functionally goes into effect on January 1, 2021. On that date, employees may start using Paid Sick Leave. As of September 30, however, employees were to begin "accruing" Paid Sick Leave at a rate of 1 hour of leave for every 30 hours worked. Employers should keep track of how much leave their employees will have accrued as of January 1. Alternatively, employers may choose to "frontload" employees' Sick Leave allotment at the beginning of the year.
Basics of Paid Sick Leave Law
A brief recap of the Paid Sick Leave Law’s basic requirements is helpful before looking at the details from the new guidance.
Reasons for Leave
Under PSL, employees will be entitled to job-protected, paid leave for three basic reasons:
- (1) For their own or their family member's physical or mental illness, regardless of whether it has been diagnosed or requires medical care;
- (2) To obtain a diagnosis, care, or treatment for their own or their family member's physical or mental illness; and
- (3) For various reasons related to domestic violence, such as where the employee needs to miss work to obtain services from a domestic violence shelter, or take other actions to increase the employee's safety.
The first two reasons are classified as "Sick Leave"; the third reason is "Safe Leave."
Family Members Under PSL
"Family member" for Paid Sick Leave purposes includes an employee's:
- Domestic partner
- Parent, including parents-in-law
Amount of Leave
The amount of leave an employee may use per year depends on employer size:
Amount of Leave per employee
4 or fewer employees in a calendar year, with a net income of less than $1 million in the previous tax year:
40 hours, unpaid.
4 or fewer employees in a calendar year, with a net income of $1 million or more in the previous tax year:
40 hours, paid.
5 to 99 employees in a calendar year:
40 hours, paid.
100+ employees in a calendar year:
56 hours, paid.
As mentioned above: employees accrue one (1) hour of leave for every 30 hours worked, but employers may also "frontload" their employees' sick leave banks with a particular amount of leave time.
The guidance clarifies that employers do not need to frontload leave to the maximum amount. For example, if a part-time employee working for an employer with 5 to 99 employees will likely not work enough hours to accrue 40 hours of paid sick time, their employer can frontload the part-time employee with 20 hours of paid sick time. However, the employer would still have to track the employee's hours worked, and if the employee ends up working more hours than anticipated, the employee would continue accruing leave at a rate of one hour for every 30 hours worked.
Employers choosing this frontloading method may not later reduce an employee's leave allotment based on the employee's actual hours worked.
Key Points from New Guidance
The guidance provides detail on several issues, such as employer coverage, employee eligibility, and interplay with other leave requirements. Some of the key points are summarized here:
All private-sector employers are covered; no public sector employers are covered.
- Private-sector employers include all non-profit employers, as well as charter schools and private schools.
- Public-sector employers, such as state and local government agencies, are not covered by the law. Public school districts are considered public-sector employers, and should not be covered by the law, either.
All private-sector industries and occupations are covered.
- Employees are covered by the law regardless of their industry, occupation, or method of payment. In other words, employees are covered regardless of their part-time or full-time status, temporary status, seasonal status, and regardless of their overtime exempt status. Seasonal employees who regularly take extended absences from work may maintain their leave accrual for when they return.
Employees may use sick leave for routine medical appointments.
- This includes appointments for regular check-ups, dentist appointments, etc. when they are for a treatment of a condition or for preventive medical care.
Employees may begin accruing and using leave as soon as employment starts.
- Unlike several other types of leave, such as leave under the Family & Medical Leave Act (FMLA) or N.Y. Paid Family Leave (PFL), there is no minimum period of employment before an employee may start accruing and using their sick leave.
Employees must be informed of maximum amount of leave.
- Employers can limit an employee's total leave to the maximum amount provided by law. But the guidance directs employers to notify employees of the maximum amount. Specifically, the guidance states "any limitations permitted by the law must be put into writing and either posted or given to employees."
Unused Paid Sick Leave carries over from year-to-year.
- But while an employee's accrued, unused "bank" of leave time may grow, employers may still limit the employee's annual usage to the maximum allowed by law. (40 hours for employers with 99 or fewer employees and 56 hours for employers with over 99 employees).
Employees are not required to receive a payout of unused, accrued sick leave time upon separation from employment.
- Employers should ensure their employees are made aware of any limitations on payout in a written policy.
Employers may set a minimum of increment of leave, but it cannot be more than four hours.
- Employers can require that employees use leave in a "minimum increment," but the increment cannot exceed four (4) hours. For example, if an employee requests two (2) hours of leave, businesses may require that the employee use four hours. Businesses should review their operating needs, such as shift structures and manpower requirements, when selecting a minimum increment.
Employees must be paid their normal rate of pay while on leave.
- For salaried exempt employees and employees who are paid at fluctuating rates, businesses should ensure they calculate a proper rate-of-pay when employees take leave.
- Employers in tipped industries (restaurants, personal care, etc.) should note that no tip credits may be utilized while an employee is on leave.
Collective bargaining agreements may include different sick leave requirements, if certain procedures are followed.
- A collective bargaining agreement executed after Sept. 30, 2020 can provide "comparable benefits," but the agreement must reference the law itself.
Employees cannot be required to telework while on sick leave.
- While teleworking is here to stay, employers cannot require an employee on sick leave to work remotely from home. If the employer and employee agree, however, the employee can work from home and not use sick leave.
Paid Sick Leave is separate from New York's COVID-19 Leave Law.
- New York employers likely have a working familiarity with the state’s “other” sick leave law – the COVID-19 Leave Law, passed earlier this year. As stated in the guidance, an employee's usage of "COVID-19 leave does not impact or otherwise utilize an employee's paid sick leave accruals or usage." Therefore, leave under the new Paid Sick Leave law is intended to be "in addition" to any COVID-19 Leave.
Paid Sick Leave is intended to be separate from the FMLA and N.Y. Paid Family Leave.
- Reasons for leave under Paid Sick Leave might overlap with reasons for leave under the FMLA and N.Y. PFL. The guidance directs that the "Paid Sick law operates independently from other State and Federal leave requirements." However, employers may allow employees to utilize Paid Sick Leave time during their PFL leave. Doing so would bring the employee to their full pay while on PFL, since pay while on PFL is limited to a percentage of the employee's total pay. An employee cannot receive more than their full wages while receiving PFL benefits.
Employers may discipline employees who misuse Sick Leave.
- Employers can levy discipline against employees who use sick Leave for a non-qualifying reason, or lie to their employer in connection with taking leave. Discipline can include termination.
Failing to provide sick leave properly under the Paid Sick Leave will trigger severe penalties.
- If an employer fails to provide Sick Leave as required by the law, penalties will be the same as penalties in an unpaid wage claim. This can include payment of full, owed “wages” (i.e., the amount of Sick Leave), liquidated damages, and civil penalties up to double the amount due.
Remaining Questions and Next Steps
While the guidance answers many questions, other issues remain.
Chief among them from an administrative standpoint: the details on employee notice and timing of requests is unclear at the moment. This is in contrast to similar leaves under the FMLA or PFL, which require requests for leave in a prescribed timeframe with proper documentation.
Treatment of existing policies is still relatively foggy, too. The law allows employers to cover their obligations under Paid Sick Leave through "existing policies," so long as the existing policy meets the law's requirements on accrual, carryover, and usage. The details for whether a policy will be deemed to match those requirements is not included in the guidance.
Answers to those issues may be coming, but not for some time. This guidance is only a first step; the Department of Labor is still expected to issue formal regulations on the Paid Sick Leave law. Those regulations will hopefully clarify these and other issues; however, they are not expected to be finalized until after Jan. 1.
As a next step, employers with existing leave policies should evaluate whether their policies line up with the requirements in the Paid Sick Leave law. Employers without formal policies should ensure they have a written Sick Leave policy in place by Jan. 1. Businesses should also review their operational requirements to determine the best approach for items such as accrual and minimum usage.