Amendments to New York City's Earned Sick Time Act (ESTA) became effective on March 4, 2016. ESTA, originally adopted in June 2013, requires employers in New York City with five or more employees to provide eligible employees up to 40 hours of paid time off each year in order to address their personal health needs or those of particular family members. The New York City Department of Consumer Affairs (DCA), in a set of amended rules, clarified certain ambiguities and imposed new obligations on employers.

Amendment Highlights

The amended regulations:

  1. Require employers to distribute or post written policies and mandate their content:
    • ESTA written policies must include: (a) the employer's method of calculating sick time; (b) the employer's policy on the use of sick time, including any limitations such as notice, written documentation or verification requirements, the consequences for failure to provide such documentation or verification, minimum sick-time use increments and disciplinary policies regarding the misuse of sick time; and (c) the employer's policy regarding carryover of unused sick time at the end of the year.
  2. Require robust recordkeeping obligations and direct that an adverse inference be drawn for failure to maintain records:
    • Employers must maintain records for a period of three years documenting their ESTA compliance. These records must indicate: (a) certain basic employee information, including rate of pay, whether the employee is exempt from receiving overtime compensation, and the employee's employment start/end date; (b) the employee's hours worked; (c) the date and time of each instance of sick leave used and the amount paid for such leave; (d) changes in the material terms of the employee's employment; and (e) the date the Notice of Rights was provided to the employees.
  3. Allow employers to set a minimum number of hours employees must take for each use of sick leave:
    • Originally, under ESTA, employers could set a minimum increment for the use of sick time that could not exceed four hours. Now, under the amended rules, an employer can also set fixed periods of up to 30 minutes beyond the minimum increment. For example, ABC Corp. maintains a four-hour minimum sick-time increment and, under the new ESTA rule, requires that employees use sick time beyond the initial, minimum increment in 30-minute intervals starting on the hour or half-hour. Employee X is scheduled to work from 10 a.m. to 6 p.m., but has a medical appointment at 11 a.m. for which he has requested sick leave time. Employee X does not return to work until 2:10 p.m. ABC Corp. can require Employee X to use 4.5 hours of sick time and begin work at 2:30 p.m.
  4. Specifically address joint employment issues:
    • Whether an employer is considered a joint employer for purposes of enforcing paid sick leave obligations is based on "whether the employer exercises some control over the work or working conditions of an employee."
  5. Allow discipline, including termination, of employees who abuse paid sick leave:
    • Employers may take disciplinary action, up to and including termination, against employees who abuse sick leave. Examples of "abuse" include: (a) use of unscheduled sick time on or adjacent to weekends, regularly scheduled days off, holidays, vacation or paydays; (b) taking scheduled sick time on days when other types of leave have already been denied; and (c) taking sick time on days when the employee is scheduled to work a shift or perform duties perceived as undesirable.
  6. Impose a $500 penalty for not responding to or cooperating with the DCA.

Considerations for Employers

New York City employers should take notice of these developments and consider their impact on existing paid sick leave policies and whether any changes are necessary.