What New York City Employers Should Know About The Amended Paid Sick Leave Law

Paula Lopez, March 6, 2014.

On February 26, 2014, in an effort spearheaded by Mayor Bill DiBlasio, the New York City Council passed significant amendments to the Earned Sick Time Act (ESTA), recently enacted in June 2013 and set to go into effect on April 1, 2014.  Consequently, in a little over a month before ESTA was slotted to go into effect, several key provisions affecting the size of employer covered under the law, the implementation of the law, the permitted use of sick leave, and the law’s enforcement mechanisms were significantly broadened.   

In enacting ESTA, New York City joined, four cities—San Francisco, Washington D.C., Seattle, and Portland—and the State of Connecticut in becoming one of only six jurisdictions with a law covering paid sick time. ESTA’s passing was considered a significant regulatory shift in favor of employees, requiring a majority of New York City employers to offer their employees a minimum level of mandatory sick leave. 

As a result of the recent amendments, employers previously not covered by ESTA are now grappling to ensure their sick time policies are in compliance with the law.   Below are some of the key provisions that New York City employers should be aware of in evaluating their policies and to ensure compliance. 

Which Employers Are Covered?

All employers with 5 or more employees and employers with one or more domestic workers are required to provide paid sick leave.  Employers with fewer than 5 employees will be required to provide unpaid sick leave.  The manufacturing sector (exempted under the original law) is now covered under ESTA.   

All full-time, part-time and temporary employees working in a given week are counted in determining an employer’s size.  If the number of employees working a given week fluctuates, the business size is determined based on the average of the number of employees that worked for compensation per week during the preceding calendar year.

For chain businesses, the total number of employees working for the chain is calculated by aggregating the number of employees working at each establishment that comprises the chain business. 

Exempted from ESTA are federal, state and local government employers.

Which Employees Are Covered?

An employee is defined as anyone “employed for hire within the city of New York (on a full-time or part time basis) for more than eighty hours in a calendar year.”  Individuals working as part of a work-study or scholarship program, independent contractors and some hourly professional employees are exempted under ESTA.

What Rights Does ESTA Afford Employees?

Starting on April 1, 2014, employees, other than domestic workers, are entitled to accrue sick leave at a rate of one hour of sick time for every thirty hours worked.  Covered employers with 5 or more employees are required to provide up to 40 hours (5 days) of paid sick leave to each employee during an employer’s calendar year.  Covered employers with less than 5 employees, other than domestic workers, are required to provide employees with up to 40 hours (5 days) of unpaid sick leave. 

Covered employers must allow their employees to start using their accrued sick time 120 days after commencement of their employment or the effective date of the law, whichever is later. 

Domestic workers are still covered under the New York Labor Law which provides for three paid days off from work after one full year of employment.  ESTA supplements this by affording domestic workers with an additional 2 days of paid sick time after one year of work with the same employer.

What Are Covered Employers’ Obligations Under ESTA?

Covered employers must permit their employees to use accrued sick time for the absence of work due to:

1. Such employee’s mental and physical illness, injury or health condition or need for medical diagnosis, care or treatment of a mental or physical illness, injury or health condition or need for preventive medical care;
2. Care of a family member who needs medical diagnosis, care or treatment of a mental or physical illness, injury or health condition or who needs preventive care; or
3. Closure of such employee’s place of business by order of a public official due to a public health emergency or such employee’s need to care for a child whose school or childcare provider has been closed by order of a public official due to a public health emergency.

“Family member “is defined under ESTA as an “employee’s child, spouse, domestic partner, parent, sibling (including a half sibling, step sibling, or sibling related through adoption), grandchild, grandparent, or the child or parent of an employee’s spouse or domestic partner.”

Employers are prohibited from retaliating or threatening to retaliate against an employee for exercising or attempting to exercise any rights under ESTA.  There is also a record keeping requirement for employers to maintain records documenting their compliance with ESTA.  Such records must be kept for 3 years.  Employers are also required to provide their employees written notice of their rights under ESTA at the commencement of their employment.  The notice must include their right to sick time, procedure for accrual and use of sick time, the calendar year of the employer, right to be free from retaliation for exercising their rights under ESTA, and the right to file a complaint with the Department of Consumer Affairs (DCA) for a violation of the law.   The notice must be in English along with a translation in the primary language of the employee, if one is available from DCA.  The required notice may also be conspicuously posted at the employer’s place of business in an area accessible to all employees.  DCA is tasked with generating the notices.

What Responsibilities do Employees Have in Using Sick Time under ESTA?

When the need to use sick leave is foreseeable, employers can require that employees provide a reasonable amount of notice before using sick time.  However, the notice requirement cannot exceed seven days. 

If use of sick leave is not foreseeable, no advance notice is required, but an employee must provide the employer notice “as soon as reasonably practicable.” 

An employer can require that an employee who is absent from work for more than three consecutive work days provide reasonable documentation showing the use of sick time was authorized under ESTA. 

Any documentation provided by the employee for purposes of utilizing sick time shall be treated as confidential.

How Will ESTA be Enforced?

The original version of ESTA tasked DCA as the only city agency responsible for enforcing the law.  Following its amendment, enforcement of the law continues to be within the purview of DCA, but the Mayor is authorized to pick or create a new agency to implement and enforce the law and such agency will hold the powers and authority vested upon DCA. 

In addition, the amended law authorizes DCA to initiate investigations over an employers’ compliance with the law, even if no complaint has been filed with the agency.  Under the prior version, DCA’s investigative procedures were only triggered through the filing of a complaint against an employer. 

Any person alleging a violation of ESTA has three (3) years from the date the person knew or should have know of the alleged violation to file a complaint with DCA. 

What Penalties Will an Employer in Violation of ESTA be Subjected To?

An employer who violates ESTA is subject to penalties payable to an employee and civil penalties imposed by DCA or such other agency as designated by the Mayor, payable to the City. 

Recovery by an Aggrieved Employee:

An employer who fails to compensate an employee for sick leave taken shall be liable to an employee for three times the wages that should have been paid or $250, whichever is greater. 

An employer who unlawfully denies a request for sick leave or requires an employee to find a replacement worker before using the time, or to make up the hours missed, is subject to a penalty payable to an employee of up to $500.

For each instance of retaliation that did not result in termination, an employer may be liable to an employee for full compensation, including wages and lost benefits, plus $500 and injunctive relief.

For each instance of retaliation resulting in termination, an employer may be liable to an employee for his/her full compensation, including lost wages and benefits, plus $2,500 and equitable relief, including reinstatement. 

Civil Penalties:

An employer found in violation of ESTA’s retaliation, accrual or use provisions shall also be liable for a civil penalty payable to the City not to exceed $500 on a first violation, $750 on a second violation occurring within 2 years of any prior violation, and $1,000 for any subsequent violation.

An employer who fails to comply with ESTA’s notice requirement shall be subject to a civil penalty not to exceed $50 per employee who was not given proper notice.

What Effect does ESTA have on Collective Bargaining Agreements?

For employees covered by a collective bargaining agreement on April 1, 2014, ESTA will not go into effect until the termination date of the agreement.

After April 1, 2014, parties entering into a collective bargaining agreement can opt out of coverage under ESTA if the agreement expressly waives coverage under ESTA and provides for comparable benefits in the form of paid days off.

How Does ESTA Affect Employers’ Existing Sick Leave or Paid Time Off Policies?

Of course, an employer subject to ESTA’s requirements with a sick time policy in effect that is comparable or exceeds the minimum requirements under ESTA is not required to modify or supplement its policies. For employers required to provide paid sick leave under ESTA, such comparable policies could include paid time off, paid vacation, paid personal days, or paid days of rest (domestic workers) in an amount sufficient to meet ESTA’s requirements, so long as the employees are allowed to use such time for the same purpose and under the same conditions.  The same applies to employers required to provide unpaid sick leave. 

Therefore, it is essential for employers to review their sick leave and paid time off policies prior to April 1, 2014 to ensure compliance under the various provisions.