New York City Earned Sick Time Act Commences April 1, 2014

The New York City Earned Sick Time Act (the “Act”), as recently amended, goes into effect on April 1, 2014.  The amendment has set forth significant changes to the original New York City Earned Sick Time Act, adopted into law on June 26, 2013 (the “Original Act”).  Key provisions of the Act are discussed herein. 

Covered Employers

The Act has been expanded to cover all non-governmental employers in New York City with five or more employees, or with at least one domestic employee.  Notably, the amendment has removed the exclusion for certain manufacturing industry employers, who are now subject to the Act.1 

The Act requires that these employers provide covered employees with up to forty hours of paid sick leave per “calendar year”. “Calendar year” is defined as “a regular and consecutive twelve month period, as determined by an employer.”  

Employers who do not employ at least five workers must provide employees with up to forty hours of unpaid sick leave per calendar year.

Covered Employees

Covered employees are defined as individuals who work in New York City on a full-time or part-time basis for more than eighty hours per calendar year (“employees”). “Hourly professional employees” who determine their own schedule and are compensated at a rate of at least four times the minimum federal wage and independent contractors are not covered by the Act.

Existing employees will begin to accrue said sick time on April 1, 2014, while employees hired after April 1 will begin to accrue sick leave upon commencement of employment.2

Computing Paid Sick Leave

Under the Act, employees will accrue paid sick time at a rate of one hour for every thirty hours worked, with a maximum of forty hours accrued per calendar year.  The accrual time calculations differ based on the exempt status of the employee.  Specifically, nonexempt employees will accrue time based on the hours they work. Exempt employees, however, will accrue sick time based on a forty hour work week schedule.  However, when an exempt employee typically works less than forty hours per week, the exempt employee’s accrual time can be based on the hours he or she typically works.  Of course, if this method of calculation is utilized, the employer will have an obligation to keep and maintain accurate logs of the exempt employee’s working hours.

Although employees can generally allocate their paid sick time at their own discretion, the Act does set forth some restrictions. Primarily, employers may set a minimum increment for use of sick leave, provided that it is not greater than four hours per day. Moreover, employers may require employees with “foreseeable leave” to give advanced notice of up to seven days. When leave is “unforeseeable” employers can require notice from employees “as soon as practicable.”

Reasons For Sick Leave

An employee may use paid sick leave for their own mental or physical illness, injury, health condition, preventative care, or to care for a family member under the same circumstances. The definition of “family member” under the Act is quite expansive.  Succinctly, “family member” is comprised of an employee’s (i) spouse; (ii) domestic partner; (iii) parent; (iv) sibling; (v) child of parent of a spouse or domestic partner; (vi) grandchild; and/or (vii) grandparent. In addition, leave may be used when the employer’s place of business is closed due to a public health emergency or when the employee must tend to a child whose school or childcare center has been closed due to a public health emergency.

Unused Sick Leave

Employees are entitled to carry-over unused leave to the next calendar year, up to a limit of forty hours.  An employer may instead compensate the employee for any unused sick time at the end of the calendar year, as long as it allows accrual to restart on the first day of the new calendar year. 

An employer is not required to pay for unused sick time upon an employee’s separation from employment.

Notice and Record Requirements

By May 1, 2014, or at the commence-ment of employment, whichever is later, employers must provide employees with a notice of their rights under the Act, including their right to file a complaint.  This notice must be written in English and in the employee’s primary language.  Copies of notices and proof of receipt should be maintained by employers.  In addition, the Act requires that employers maintain records documenting compliance for at least three years.

Enforcement

Individual employees do not have a private cause of action for any alleged violations of the Act.  However, employees may file a complaint with the Department of Consumer Affairs (“DCA”) or other designated agencies within two years of an alleged violation.  In addition, the DCA has the authority to initiate its own employer investigations to ensure compliance.

The DCA has published an employer guidance sheet, sample Notice of Employee Rights, as well as answers to frequently asked questions.   For more information, see their website: http://www.nyc.gov/html/dca/html/law/PaidSickLeave.shtml. 
 
Penalties and Damages

The DCA also has the ability conduct hearings, assess penalties and order equitable relief. Such penalties and damages include, but are not limited to: a civil penalty, payable to New York City not to exceed $500 for the first violation; a civil fine in an amount not to exceed $50 for each employee who was not given the required notice, if such violation was willful; and damages paid to the employee for the unlawful denial of leave, failure of the employer to compensate the employee, and/or retaliation taken against the employee for asserting their rights under the Act.  Notably, in the case of retaliation, an employer could be liable to the employee for penalties from $500.00 to $2,500.00, lost wages, lost benefits and/or equitable relief, including reinstatement.

Covered employers with fewer than twenty employees and certain manufacturers have a six month grace period before facing civil penalties for first time violations of the Act. However, any subsequent violations by the employer during the grace period will serve as a predicate in determining penalties for violations that occur on or after October 1, 2014. To that end, covered employers should comply with the Act as of the effective date.

Conclusion

Employers in New York City need to review and update their sick leave policies, benefits handbooks, notices and written leave policies to comply with the Act.  Employers must also distribute and post notices and maintain records of compliance consistent with the Act.

 1 The Original Act did not apply to certain employers classified in sections 31, 32 or 33 of the North American Industry Classification System.

 2 Union employees covered by a collective bargaining agreement on the effective date of the Act will not be subject to the Act until termination of the existing collective bargaining agreement.  Further, the parties to a valid collective bargaining agreement may expressly waive the provisions of the Act, provided that the agreement allocates comparable benefits. Union employees under a collective bargaining agreement within the construction and grocery industry may waive their rights under the Act without comparable benefits.