Why it matters
Many employers in New York City have been grappling with implementing compliant paid sick leave programs for almost two years. In a set of amended rules, the New York City Department of Consumer Affairs clarifies ambiguities and imposes new obligations on employers. While some of the new rules seem intuitive, others may surprise employers who have been carefully tracking developments in the law and administrative guidance.
The New York City Department of Consumer Affairs has issued amended New York City sick leave rules that are scheduled to take effect March 4, 2016. While some of the changes appear to clarify existing law, others impose new obligations on employers. Of particular interest to most employers are the changes to the rules regarding sick leave policies, employee records, and penalties. While many New York City employers have sick leave policies that appear on their face more generous than the rights provided under the sick leave law (formally entitled the "Earned Sick Time Act"), the law and the rules issued by the Department impose highly technical requirements that may trap the unwary.
New Content Requirements for Policies
The prior version of the rules required employers to distribute written policies on sick time and provide employees with the mandatory Notice of Rights form published by the Department of Consumer Affairs. The new rule goes a step further by expressly stating that employers must draft and distribute sick leave policies with specific terms and must follow such written policies. At a minimum, employer sick leave policies must: (1) state the employer's method for calculating accrual or frontloading of sick time; (2) describe the employer's policies regarding the use of sick time; and (3) discuss the employer's policy regarding carry-over of unused sick leave time, as required by the law. Employer policies must also describe any requirement that employees provide notice of the need to use sick time, any requirement for written medical documentation or verification by the employee that sick leave was used for an authorized purpose (and any consequences of failing to timely do so), any reasonable minimum increments or fixed periods for the use of sick time, and any policy for disciplining employees who misuse sick time. Significantly, the rules clarify that an employer has an "additional and separate" obligation to provide the Notice of Rights form and that an employer may not distribute the Notice of Rights form in lieu of preparing its own written sick time policies.
Significant Recordkeeping Requirements for Employers
Previously, employers were merely required to track individual employees' sick leave accrual and use. Now the Department requires employers to keep very detailed time records and make them available upon request. Specifically, employers must maintain in "an accessible format, contemporaneous, true, and accurate" records that show: (1) the employee's name, address, phone number, start and end dates of employment, rate of pay, and whether the employee is exempt from the New York state overtime requirements; (2) the hours worked each week by the employee (unless the employee is exempt and has a regular work week of 40 or more hours); (3) the date and time of each instance of sick leave and the amount paid for that time; (4) "any change in the material terms of employment specific to the employee"; and (5) the date that the Notice of Rights was provided to the employee and "proof" that the Notice was "received by the employee."
Employers are likely not accustomed to keeping such detailed time records for employees exempt from the overtime requirements of state and federal law. However, under these new rules, it appears that the Department expects all employers to record the precise start and end time of sick leave for all employees, regardless of exempt status, creating new administrative obligations for employers. Regarding records of a "change in the material terms of employment," it appears that the Department seeks to use this information to determine whether alleged retaliation has occurred. Indeed, a new "Retaliation" rule provides that the Department may indirectly establish a causal connection between an employee's exercise of rights and an adverse action, such as through evidence that taking sick leave (or making a complaint about sick leave) was "followed closely" by an adverse employment action. In addition, an employer need not merely provide the Notice of Rights; rather, it must keep a dated proof of receipt by an employee. This was previously recommended as a best practice and is now required.
The rules offer some new detail about penalties. Among other new penalties, if the Department finds that an employer has a policy or practice of prohibiting the use of paid sick leave, it may incur a penalty of up to $500 for each employee affected by the policy for the first violation (up to $1,000 per employee for subsequent violations). In addition, if an employer does not allow accrual of sick time as required by the law, every affected employee must be provided with 40 hours of sick time (or, if known, the amount of sick time that the employee should have accrued, up to 80 hours).
The new rules address other miscellaneous issues, such as the size of covered employers, interplay between temporary help firms and employers, incremental use of sick time, rate of pay and measurement of accrual of sick time for employees who are not compensated on an hourly basis (such as piecework and commission basis), and rehire situations, among others.
- Review sick leave and paid time off policies to ensure compliance with the technical requirements of the NYC sick leave law; it is conceivable that a technical flaw (such as not allowing sick time to carry-over) could lead to significant penalties.
- Require all employees to record sick leave start and stop times, not just non-exempt employees who are accustomed to clocking in and out.
- Require employees to sign an acknowledgment of receipt of the employer's own sick leave policy and the Notice of Rights form or send the documents by email and require and keep return receipts for all employees.
- Monitor developments in this area, as the enforcement guidance about best practices is still evolving.
To review the amended rules, click here.