2021 is here, and with the new year comes changes for New York employers seeking to ensure full compliance with newly effective laws, or changes to the law, throughout the State. Employers are well-advised to review the changes for the new year, summarized below.

Changes to Minimum Wage

Effective December 31, 2020, New York’s minimum hourly wage, and the minimum salary threshold for exempt employees, will increase for all private sector employees apart from those living in New York City. The new rates are as follows:

• New York City: Will remain $15.00 per hour (no change).
• Long Island and Westchester County: Increase from $13.00 per hour to $14.00 per hour.
• Elsewhere in New York: Increase from $11.80 per hour to $12.50 per hour.

Changes to the Minimum Salary Threshold for Exempt Employees

The minimum salary threshold for exempt employees is also increasing across much of New York State effective December 31, 2020. The new thresholds are as follows:

• New York City: $1,125.00 per week, or $58,500.00 per year (no change).
• Long Island and Westchester County: $1,050.00 per week, or $54,600.00 per year.
• Elsewhere in New York: $937.50.00 per week, or $48,750 per year.

Elimination of the Subminimum Wage (Tip Credits) for Employers Covered by the Miscellaneous Industries and Occupations Wage Order

Effective December 31, 2020, employers subject to the Miscellaneous Industries and Occupations Wage Order will no longer be able to pay tipped workers a “subminimum wage,” – a reduced wage which, when combined with tips received by the employees, must equal or exceed the state minimum wage. The subminimum wage, also known as the tip credit minimum wage, for such employers was previously reduced by 50 percent in June of 2020, and going forward, is now eliminated entirely for such employers. Employers are still not permitted to keep or retain any portion of a tip that an employee receives.

Notably, however, employers who are not covered by the Miscellaneous Industries and Occupations Wage Order may still take advantage of the subminimum wage for certain tipped workers. Thus, for example, employers subject to the Hospitality Wage Order (i.e., restaurants and hotels) may still take advantage of the subminimum wage for certain tipped workers. From December 31, 2020 through December 30, 2021, the minimum hourly rate that covered employers must pay to tipped service employees in New York City is $12.50 (or $11.65 in Long Island and Westchester County, or $10.40 elsewhere in New York), so long as the employees earn sufficient tips to make at least the applicable full minimum wage. The minimum hourly rate owed to covered food service workers is $10.00 in New York City (or $9.35 in Long Island and Westchester County, or $8.35 elsewhere in New York).

New York State’s Sick Leave Law, its Guidance, and Proposed Regulations

As we have previously written, the New York State Sick Leave Law (“Sick Leave Law”) was enacted this past April, providing all private sector workers in the state with new sick leave benefits which they were entitled to begin accruing as of September 30, 2020. However, while employees have been entitled to accrue such leave since September, employers were not required to allow employees to use such leave until January 1, 2021. With that date now here, employers should ensure that employees are receiving the sick leave time that they should have been accruing, under the parameters set forth under the Sick Leave Law.

New York has also issued an initial guidance – titled the New York State Paid Sick Leave FAQ (the “Guidance”) intended to clarify the Sick Leave Law for employers. For more information on the Sick Leave Law, the Guidance, and the requirements for employers, see our previous blog post.

Additionally, on December 9, 2020, New York published proposed regulations which, if finalized and enacted, would provide more clarity for employers. The comment period for the proposed regulations extends through February 7, 2021, meaning the Sick Leave Law will be effective prior to any potentially approved regulations. A review of the proposed regulations’ key provisions follows:

Documentation

Under the proposed regulations, an employer may not require an employee to provide medical or other verification in connection with sick leave that lasts less than three consecutive previously scheduled workdays or shifts. Similarly, employers are not permitted to require employees to provide them with confidential information such as the nature of an illness, its prognosis, treatment, or other related information.

However, except where prohibited by law, employers may request documentation from employees confirming their eligibility to take sick leave where the employee uses leave for three or more consecutive previously scheduled workdays or shifts – though they cannot require an employee or the person providing documentation (including medical professionals) to disclose the reason for the leave. Requests for documentation must be limited to: (1) an attestation from a licensed medical provider supporting the need for sick leave, the amount needed, and a return to work date; or (2) an attestation from an employee of their eligibility for leave.

In its current form, the proposed regulation does not directly address whether documentation can be required certifying that an employee is fit to return to duty. However, employers should keep abreast of any potential changes during the public comment period.

Employee Counts

As we have previously written, the Sick Leave Law provides that the amount of sick leave available depends on the number of employees employed during a calendar year, as follows:

• Employers with 1 – 4 employees: Employees are provided with up to 40 hours of unpaid sick leave, unless the employer had a net income of more than $1 million in the prior tax year, in which case the leave is paid;
• Employers with 5 – 99 employees: Employees are provided with up to 40 hours of paid sick leave; or
• Employers with 100 or more employees: Employees are provided with up to 56 hours of paid sick leave.

Noticeably absent from the Sick Leave Law and the Guidance was a clarification on whether the number of employees was limited only to those who worked within the state of New York. Unfortunately, the proposed regulations also fail to address this question. Thus, until further clarification is provided, employers would be best served by including their entire workforce in the count, regardless of whether they are physically located in New York.

Nonetheless, the proposed regulations did provide some additional clarity on employee threshold counts, noting that the number of employees employed during a calendar year should be determined by counting the highest total number concurrently employed during any point in that year. Thus, for example, an employer with more than 100 employees concurrently employed on January 1, 2021 would be required to provide up to 56 hours of paid sick leave, even if its staff was reduced later in the year to below 100. Part-time employees, as well as employees on paid or unpaid leave or other temporary absence, are to be counted in the total.

Accruals

Where the Sick Leave Law requires that employees accrue leave at a rate of one hour per every 30 hours worked, the proposed regulations provide that employees working fewer than 30 hours accrue sick leave at a proportional rate.

Termination of Fast Food Employers Without Just Cause in New York City

Additionally, two bills that recently passed New York City’s City Council, and that are supported by Mayor de Blasio, would amend the Fair Work Week Law to ban the termination of fast food workers without “just cause,” as well as the reduction of their hours without a bona fide economic rationale, and would require that layoffs occur by inverse seniority (i.e., those hired last are discharged first). Both bills would also set up an arbitral process as well as a private cause of action available to employees to dispute their termination with their fast food employers. Mayor de Blasio has not yet signed these bills into law, but he has indicated that he will; they will take effect 180 days following that date.

Fast food employers are employers that are part of a chain and that primarily serve food and beverages, offer limited service, and are one of 30 or more such establishments nationally, including “integrated entities” that own or operate 30 or more establishments nationally, or where a franchisor and franchisees of such franchisor together own 30 or more such establishments nationally.

Takeaway for Employers

To ensure a smooth transition into 2021, Employers are advised to review these new or revised laws, and ensure that supervisors are trained or otherwise informed on their requirements. Employers should also keep abreast of any further future regulations or guidance issued by the State.