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Labor & Employment Alert >> New York City’s Earned Sick Time Act

March 27, 2014

The New York City Council recently amended the Earned Sick Time Act (ESTA) so that its paid leave requirements will go into effect for all employers in New York City with five or more employees effective April 1, 2014.  

On March 20, 2014, the Department of Consumer Affairs provided additional information for employers regarding the ESTA, including a required Notice of Employee Rights, a fact sheet outlining certain provisions of the law, and answers to some frequently asked questions.  The ESTA had originally provided for implementation on a sliding scale so that only employers of 20 or more employees were to be covered by the Act as of April 1, 2014.   

Perhaps most importantly for many employers, the ESTA still provides that a covered employer who provides an employee with an amount of paid leave of any kind (such as PTO, paid vacation, paid personal days and paid sick days) sufficient to meet the requirements of the ESTA and who allows such paid time to be used for the reasons required under the law (as described below) is not required to provide additional paid sick time whether or not the employee chooses to use the available paid time off for the reasons set forth in the ESTA.

Basic Provisions
The ESTA requires employers with five or more employees to provide employees a minimum of one hour of paid time off (Sick Time) per 30 hours worked, up to a maximum of 40 hours of Sick Time in a calendar year. Employers with fewer than five employees must provide unpaid time off, subject to the other requirements of the ESTA.  There are also varying requirements for employers of domestic workers. 

A “calendar year” for purposes of the ESTA is any continuous 12-month period, as determined by the employer.  Exempt employees will be deemed to have worked 40 hours per week for Sick Time accrual purposes, unless they are regularly scheduled for less than 40 hours, in which case Sick Time accrues based on their scheduled workweek.

An “employee” for purposes of the ESTA is any employee who works 80 or more hours in a calendar year.  Employers can prohibit employees from using Sick Time for the first 120 days of their employment (or, for current employees, until July 30, 2014), which will effectively cut out short-term employees.  However, when an employee separates from employment and is rehired within six months by the same employer, previously accrued unused Sick Time is must be reinstated and the employee is entitled to use this Sick Time at any time after rehire.   

Employers must permit employees to carry over up to 40 accrued, unused hours of Sick Time from one calendar year to the next.  Employers are not required to pay employees for accrued, unused Sick Time upon termination of employment.

Under the ESTA, Sick Time can be used for any of the following purposes:

  1. The employee’s own mental or 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 medical care; or
  3. Closure of an employee’s place of business by order of a public official due to a public health emergency or the 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.

Notably, this includes time off for general doctor, dentist or eye doctor appointments, regardless of whether these appointments are necessary due to an emergency.

Administrating the Use of Sick Time
Employers can require employees to provide advance notice of seven days or fewer of the need to use Sick Time where this need is foreseeable.  Where the need is not foreseeable, an employer may require employees to provide notice as soon as practicable under the circumstances.

When an employee uses three or more consecutive days of Sick Time, employers may require the employee to provide reasonable documentation, such as documentation signed by a licensed health care provider, that the time off was used for the purposes outlined under the law.  Employers may also require employees to provide their own written confirmation that Sick Time was used for permissible purposes regardless of duration.  However, employers may not require that any documentation specify the nature of the employee’s or the employee’s family member’s injury, illness or condition.


The Bottom Line

Employers in New York City must act quickly to ensure compliance with the law.  At a minimum, they should:

Provide current employees with a Notice of Employee Rights no later than May 1, 2014 (employees hired on or after April 1, 2014 must receive a copy at the commencement of employment).  An initial draft of the Notice can be found here: http://www.nyc.gov/html/dca/downloads/pdf/MandatoryNotice.pdf 

Update employee handbooks and leave policies to ensure compliance with the ESTA, paying particular attention to the carry-over provisions of any pre-existing policies,  how part-time and temporary employees accrue time under these policies and for what purposes existing paid time off may be used.  Employers may need to clarify in their policies that vacation/personal/PTO days may be used for any purpose, including the reasons for which Sick Time may be used under the ESTA.

Keep all records showing compliance with the ESTA for at least three years.

In addition, the current notice provided by the Department of Consumer Affairs does not contemplate the use of pre-existing policies to comply with the ESTA’s requirements.  

Employers should consult with legal counsel to ensure that their current policies and practices comply with the ESTA.