A version of this article was published in the Employment, New York, and Public Policy sections of Law360 and respective newsletters on July 9, 2013. It is available online at http://www.law360.com/articles/454877/ironing-out-the-wrinkles-in-nyc-s-earned-sick-time-act. © Copyright 2013, Portfolio Media, Inc., publisher of Law360.

On June 26, 2013, New York City joined the growing list of jurisdictions requiring employers to give workers paid sick time.¹ The Earned Sick Time Act—enacted after the City Council’s decision to overrule Mayor Bloomberg’s veto earlier this month—allows employees to earn a minimum amount of paid sick time from business that employ at least 20 employees.

After the first 18 months, the act will expand its coverage to employers with 15 or more employees and to all who employ domestic workers. Public-sector employers are not covered by this law. The effective date of this new law is unique, as it is tied to economic indicators requiring New York City’s economy to be doing the same or better than in 2012 for it to go into effect. If, as of December 16, 2013, the local economy has not worsened, the act will go into effect on April 1, 2014. If the economic triggers are not met, the act is not repealed, just delayed.

This act not only requires that paid leave be provided by “larger” employers (thresholds of 15 to 20 employees), but also that unpaid leave be provided to workers employed by employers under the statutory thresholds.

Under the new law, covered employers must provide all full- and part-time workers who work over a mere 80 hours annually with up to five days of paid sick time per year, calculated at the rate of one hour per 30 hours worked, with a cap of 40 hours per calendar year. Businesses that employ less than the 15-to-20 minimum number of employees must still provide their workers with up to 40 hours of unpaid sick leave once the law takes effect.

Employers who already have a paid or unpaid time off policy (i.e., vacation, personal days, sick days, etc.) that is as or more generous than the benefits provided for in the act and who allow such leave to be used for the same purposes and under the same conditions (i.e., earned at an 30:1 accrual rate or faster) are not required to provide additional sick time pursuant to this new law.

The new law, unfortunately, has more wrinkles than a linen shirt caught in a summer rainstorm; indeed, it is approximately 20 pages in length. Here are some of the special provisions of the new law.

1. Employees who do not use all accrued sick time during a calendar year are entitled to carry over all of their earned sick leave. The law, however, permits employers to limit the amount of sick leave used by an employee in any one year to no more than 40 hours of sick leave (whether paid or unpaid).

2. Employers can opt to cash-out employees for their unused sick time each year in order to avoid sizeable carry-overs, provided certain conditions are met. However, employers will be pleased to know that earned but unused statutory paid sick time does not need to be paid out if the worker resigns, retires, or is discharged for reasons unconnected to the use of the sick leave. (This may well be a topic of “negotiation” when an employee is asked to tender his or her resignation in lieu of being discharged.)

3. Although sick leave accrual begins upon hiring, employees are not eligible to use statutory sick leave until they have been employed for at least four months.

4. The act allows employees to use the sick leave for a broad range of reasons, including his or her “mental or physical illness, injury or health condition,” for preventive medical care, or to care for a family member who is sick, injured, or for preventive care. (This is likely to result in some very questionable explanations for workers who call in before work to say they are taking a sick day.)

5. Employers may discipline workers who use sick days for purposes not permitted by the act (but, care must be taken to issue discipline on a non-discriminatory basis).

6. If an employee is absent in excess of three days, employers may require a doctor’s note confirming the need and duration of the leave. Employers may not, though, inquire as to the specifics and/or nature of the employee’s or his family member’s illness or condition. (Thus, for workers who take two or fewer consecutive days of sick leave, a mere recital that he or she or a child was “sick” may be all the worker needs to say.)

7. If the employee is asked for a doctor’s note and submits it, the note must be treated by employers as confidential.

8. Employees are free to use the leave in any increments they see fit (hours, days, a week) but employers may require that such increment be no less than four hours in any one day.

9. Businesses may insist on seven days’ advance notice if the need for the leave is foreseeable. (Preventive care doctors’ appointments should often fall into the “foreseeable” category, but some workers who fail to give seven days’ notice may simply say they just became “sick” – and there is little an employer can do to prevent such abuse.)

10. For employers with a unionized workforce covered by a collective bargaining agreement (CBA) as of the effective date of the act, the law’s provisions will not apply to those employers until the expiration of the contract. After the expiration of the CBA, the employer and the union can jointly agree to waive the requirements of the law provided that the CBA contains sick leave benefits comparable to those in the act. Unionized construction and grocery workers may elect to waive the act’s provisions regardless of whether similar benefits are provided under their CBA.

11. The new law requires businesses to inform all new hires of their right to paid or unpaid sick leave. The individual notice, which must be provided in the employee’s primary language, must disclose that an employer cannot retaliate against an employee for using the leave and that they have a right to file a complaint with the Department of Consumer Affairs (DCA)—the agency tasked with the enforcement of the new statute. Failure to give the required notice can result in civil fines of $50 per employee.

12. Employers must keep records of all notices, hours worked, and other records documenting their compliance for at least two years and allow the DCA to audit those records upon request.

13. Not surprisingly, the act prohibits retaliation or interference with an employee’s rights under the act.

14. A piece of good news: There is no independent, private cause of action created by the statute. The act calls for the DCA to establish a new complaint-driven process for enforcing this law. This agency is exclusively tasked with processing, investigating, and adjudicating complaints under the act. Employees have 270 days from the time a violation is deemed to occur to file a complaint. All complaints are subject to mediation. If mediation is unsuccessful, the DCA will investigate the matter and refer it to an administrative adjudicatory process for final determination if its investigation finds a violation occurred. The DCA must impose a civil penalty not to exceed $500 for the first violation, $750 for a second violation during a two-year period, and $1000 per violation for each subsequent occurrence.

15. The DCA is also given the power to grant an employee or former employee monetary and equitable relief if a violation is found:

- Failure to compensate employee for sick leave: $250 or three times the applicable wages not paid, whichever is greater.

- Denial of requested sick leave for any unlawful reason: $500 per instance.

- Retaliation by employer not resulting in discharge: $500, full compensation for all wages and benefits lost, and equitable relief as appropriate.

- Retaliation resulting in unlawful discharge: $2,500, full compensation including wages and benefits lost, and equitable relief including reinstatement.

This alert is only meant to raise awareness and provide a summary of key provisions of this new act, not a full, comprehensive, and extensive analysis of the law’s new coverage, eligibility, exemptions, exceptions, obligations, enforcement, recordkeeping, and use provisions. As Mayor Bloomberg correctly observed when he vetoed the act, this law creates “extensive and burdensome recordkeeping and notice requirements for employers and [the establishment of] a broad and multi-faceted enforcement role for the Department of Consumer Affairs.”

Many businesses with a presence in New York City will need to revise their leave policies (even if slightly) to comply with this new law, once it becomes effective. As noted above, the effective date of the new law depends on New York City’s economic condition in relation to published economic indicators.

Endnote

1 Currently, San Francisco, Washington D.C., Seattle, and Portland have passed paid sick leave laws. Only one state, Connecticut, has enacted similar requirements affecting the private sector. Philadelphia and Milwaukee recently attempted to pass paid sick leave laws as well but efforts in those local municipalities failed. Federal law does not currently require employers to provide paid leave. In March 2013, the Healthy Families Act—which provides for paid sick time—was reintroduced in Congress. Despite public support by the U.S. Department of Labor and President Obama, efforts to pass similar bills since 2009 have been unsuccessful.