NYC Final Rule on Amended Earned Safe and Sick Time Act: What Employers Need to Know

Employers in New York City should be reviewing their safe and sick time policies in light of the final rule implementing amendments to the NYC Earned Safe and Sick Time Act (ESSTA)—now also known as the "Protected Time Off Law." The final rule, which took effect July 23, 2026, adds new leave entitlements, clarifies employer obligations regarding unpaid leave, addresses post-employment record access obligations, and provides guidance on the use of unpaid leave by exempt employees.

The Specifics

Background

On October 25, 2025, New York City amended the ESSTA to expand the covered uses for safe and sick time and to require employers to provide an additional 32 hours of unpaid safe and sick time immediately available upon hire in addition to paid safe and sick time already required by the statute, and to frontload such time at the start of each year. The NYC Department of Consumer and Workforce Protection (DCWP) issued a proposed rule in January implementing the changes, and the law took effect February 22, 2026. (See DWT's prior advisories from October 2025 and February 2026.)

Following a hearing and public comment period, the DCWP adopted the final rule at the end of June. For the most part, the final rule's core provisions remain largely unchanged from the proposed rule. However, the final rule adds targeted revisions in several areas, including payroll, recordkeeping, and administrative requirements that were not present in the original statutory amendments. The rule now also defines "protected time off" to have the same meaning as "safe/sick time" under the Act and encompasses both paid and unpaid time off.

32-Hour Unpaid Leave Requirement

As amended, the ESSTA requires employers to provide employees with at least 32 hours of protected time off (paid or unpaid) immediately available on the first day of employment and the first day of each calendar year. This is in addition to the existing paid safe and sick time available to eligible employees (40 hours for employers with 99 or fewer employees and 56 hours for employers with 100 or more employees). Importantly, these 32 hours are not prorated for part-time employees or mid-year hires.

The final rule clarifies that when an employee is absent for a covered reason and has both paid and unpaid protected time off available, the employer must draw from the employee's paid hours first unless the employee affirmatively requests to use unpaid time. If the employee's accrued paid time is insufficient to cover an absence, the employer must provide unpaid time for the remainder. Employers may require a minimum increment of up to four hours per day for use of protected time off if reasonable under the circumstances, with fixed intervals of 30 minutes or less thereafter.

Satisfying the 32-Hour Obligation with Paid Leave

The proposed rule stated that employers could satisfy the 32-hour unpaid leave obligation by providing an equivalent amount of paid leave. The final rule refines this: Employers may now provide "some or all" of the 32 hours as paid leave—giving employers flexibility to offer a combination of paid and unpaid time to satisfy the requirement. Importantly, providing paid, immediately available hours does not affect the employer's separate, existing obligation to provide 40 or 56 hours of paid leave.

New Guidance on Exempt Employees

The final rule provides guidance on a previously unaddressed issue regarding how to apply unpaid time off for employees exempt from overtime under state or federal law. Employers should provide pay for "unpaid" protected time off when necessary to comply with other legal obligations or to preserve an overtime exemption, such as under the Fair Labor Standards Act salary basis test. Practically speaking, this means that exempt employees should generally be paid even when using "unpaid" leave—including for partial-day absences—to avoid jeopardizing their exempt status.

Documentation and Pay Statement Requirements

Each employee's pay statement must show protected time off accrued and used during the pay period (differentiating paid and unpaid) and total available balances.

In addition, employers are required to maintain a written protected time off policy addressing paid and unpaid leave and guidelines for use (notice, documentation, minimum increments, discipline for misuse) and carryover policy. The written policy must be distributed at hire, within 14 days of any policy change, and upon request.

New Post-Employment Disclosure Obligation

The final rule creates a new affirmative reporting obligation that was not present in the proposed rule. At the time of an employee's separation, employers who provide ESSTA leave information electronically must now either (1) continue to provide employee access to the employer's electronic records for six months after separation, or (2) provide a written statement within one week after the employee's final payday showing the employee's protected time off balance, including amounts accrued, used, and available, for the employee's last pay period.

Reinstatement of Unpaid Leave Upon Rehire

Another provision that was absent in the proposed rule but included in the final rule provides that when an employee separates from employment and is rehired within the same calendar year, the employer must reinstate the employee's unused portion of immediately available unpaid safe and sick leave hours. This is in addition to reinstating accrued paid safe and sick leave hours otherwise required under the ESSTA.

Next Steps for Employers

NYC employers should review and update their written safe and sick time policies for compliance with the new rule, and ensure timekeeping and payroll systems correctly track and display immediately available safe and sick leave hours separately from existing paid leave.

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Roy Salins is a partner, and Kerry Burns is of counsel in DWT's New York office. If you have questions about how the final rule affects your organization or need assistance updating your policies and practices, please contact the authors or another member of our employment, benefits, and immigration team. To stay informed, sign up for our alerts.