New York Passes Budget With Permanent Paid Sick Leave, Available as of January 1, 2021

As discussed in our previous advisories (on March 18, 19, 26, and April 1), New York recently enacted a paid leave law for eligible workers unable to perform their jobs for reasons related to a COVID-19 quarantine. On the heels of that legislation, lawmakers approved New York’s FY 2021 state budget on April 3, 2020.

The budget legislation, which is expected to be signed by Governor Andrew Cuomo, includes a section that will provide statewide paid sick leave benefits to the vast majority of employees within New York. Once signed, eligible employees will be entitled to take sick leave as of January 1, 2021.

Sick Leave Benefits

Sick leave benefits are available to employees in New York as follows:

• Employers with both fewer than five employees in a calendar year and annual net income of less than one million dollars – Employees are entitled to up to 40 hours of unpaid sick leave in each calendar year.
• Employers with fewer than five employees in a calendar year but annual net income of greater than one million dollars – Employees are entitled to up to 40 hours of paid sick leave in each calendar year.
• Employers with between five and 99 employees in a calendar year – Employees are entitled to up to 40 hours of paid sick leave in each calendar year.
• Employers with 100 or more employees in a calendar year – Employees are entitled to up to 56 hours of paid sick leave in each calendar year.

Accrual of Sick Leave

Employees will be eligible to accrue one hour of sick leave for every 30 hours worked, beginning on the effective date of the eventual law, or the employee’s first day of employment, whichever occurs later. The bill’s effective date will be 180 days after it becomes law, so employers should note that if Governor Cuomo signs the bill into law in the coming days, then employees will be eligible to accrue sick leave before they can begin using that leave on January 1, 2021.

Alternatively, and to avoid the potential recordkeeping problems in calculating an employee’s accrued sick leave, employers may elect to frontload the total number of required sick leave hours at the beginning of each calendar year. For example, if an employer has 100 or more employees, it may provide each employee with 56 hours of paid leave available for use as of the first day of its designated calendar year.

Definition of "Calendar Year"

For purposes of counting employees, a “calendar year” refers to the 12-month period from January 1 through and including December 31.

However, for all other purposes – including, importantly, the period during which an employee may use a specified amount of sick leave – a “calendar year” may be any regular and consecutive 12-month period that an employer designates.

Permissible Uses

Starting on January 1, 2021, and upon the employee’s oral or written request to use leave, employers must provide accrued sick leave for the following purposes:

• (i) For a mental or physical illness, injury, or health condition of such employee or such employee’s family member, regardless of whether such illness, injury, or health condition has been diagnosed or requires medical care at the time that such employee requests such leave;
• (ii) For the diagnosis, care, or treatment of a mental or physical illness, injury or health condition of, or need for medical diagnosis of, or preventive care for, such employee or such employee’s family member; or
• (iii) For an absence from work due to any of the following reasons when the employee or employee’s family member has been the victim of domestic violence, a family offense, sexual offense, stalking, or human trafficking:
  
  • (a) To obtain services from a domestic violence shelter, rape crisis center, or other services program;
  • (b) To participate in safety planning, temporarily or permanently relocate, or take other actions to increase the safety of the employee or employee’s family members;
  • (c) To meet with an attorney or other social services provider to obtain information and advice on, and prepare for or participate in any criminal or civil proceeding;
  • (d) To file a complaint or domestic incident report with law enforcement;
  • (e) To meet with a district attorney’s office;
  • (f) To enroll children in a new school; or
  • (g) To take any other actions necessary to ensure the health or safety of the employee or the employee’s family member or to protect those who associate or work with the employee.

For purposes of these permissible uses, a “family member” is an employee’s child, spouse, domestic partner, parent, sibling, grandchild or grandparent; and the child or parent of an employee’s spouse or domestic partner; a “parent” is a biological, foster, step- or adoptive parent, or a legal guardian of an employee, or a person who stood in loco parentis when the employee was a minor child; and a “child” is a biological, adopted or foster child, a legal ward, or a child of an employee standing in loco parentis.

Notably, the bill does not address when an employer may seek documentation in support of an absence, or what kind(s) of documentation will suffice.

The Logistics of Usage and Carryover

The bill also addresses the following details:

• Increments of Use: Employers may set reasonable minimum increments of no more than four hours for use of sick leave – meaning that an employer may deny a request for two hours of paid sick leave.
• Rate of Pay: Employers must pay employees for the use of paid sick leave at their regular rate of pay or the applicable minimum wage, whichever is greater.
• Return to Work: Upon an employee’s return to work following a period of sick leave, employers must restore the employee to their prior position with the same pay and other terms and conditions of employment.
• Carryover: Employees may carry accrued, unused sick leave to the next calendar year (as that term is defined by the applicable employer). However, employers may limit the annual use of paid sick leave to 56 or 40 hours, depending on employee headcount, as explained above.
• Payroll Records: Employers are already required to maintain and preserve accurate payroll records for up to six years, reflecting, among other things, rate of pay and deductions for each week worked. Under the sick leave legislation, employers’ payroll records must also include the amount of sick leave provided to each employee.
• No Payout on Separation: Employers are not required to pay an employee for unused sick leave upon the employee’s separation from employment, or, for that matter, upon the conclusion of a calendar year.

Additional Considerations

The legislation makes plain that existing city- and county-level sick leave laws (e.g. the New York City Earned Safe and Sick Time Act, the Westchester Earned Sick Leave Law, and the Westchester Safe Leave Time Law) will not be altered by the new law to the extent that they meet or exceed the standards and requirements set forth by the State. Thus, in some instances, employers will be required to provide additional leave.

Additionally, employers will not need to provide additional sick leave under the recently-passed bill if they maintain a sick leave or time-off policy that meets or exceeds legal requirements, including in terms of accrual, carryover, and usage.

Finally, unionized employers may enter into collective bargaining agreements, on or after the effective date of the law, that provide comparable benefits as discussed herein for employees covered by such agreements, or negotiate terms and conditions of sick leave different from the provisions of the new legislation.

Next Steps

We will continue to monitor the status of this pending legislation, which we expect to be signed into law in the near future. Once signed into law, employers should work with counsel to review their existing sick and safe time policies and general PTO polices to ensure compliance with this new law in advance of its effective date. Furthermore, employers will need to train their managers to ensure that they are aware of the new law and to work with Human Resources to handle requests for sick leave.