LEGAL CORNER: During the COVID-19 Pandemic: New York Enacts Paid Sick Leave Program Effective Jan. 1, 2021

On April 3, 2020, during the height of the COVID-19 Pandemic, Gov. Andrew Cuomo “enacted the strongest Paid Sick Leave program in the nation” by passing Section 196-b of the New York State Labor Law (“Section 196-b”) [see https://bit.ly/39Xk9T6]. Proposed regulations have also been issued [see https://on.ny.gov/37TW4d2] (“Regulations”). Section 196-b, and its accompanying regulations, will certainly affect both employers and employees significantly, particularly during the pandemic.

Section 196-b takes full effect on Jan. 1, 2021. While the effective date is January 1st, it is important to note that the “accrual” element of Section 196-b (the provision by which employers are required to calculate the amount of sick time employees are entitled to) actually began on Sept. 1, 2020. It is important for all employers, including all real estate brokerage firms who employ W-2 employees, to be aware of the requirements of this new legislation. And, although the new law generally does not apply to real estate salespersons, associate brokers, and brokers who are engaged as independent contractors, it does apply to individuals who employ their own W-2 employees (e.g. assistants, bookkeepers, etc.).

Eligibility and The Amount of Sick Leave Required to be Provided to Employees

According to New York State [see https://on.ny.gov/33UVJ8Q], “all private-sector employees in New York State are covered, regardless of industry, occupation, part-time status, and overtime exempt status. Federal, state, and local government employees are not covered, but employees of charter schools, private schools, and not-for-profit corporations are covered.”

Under Section 196-b, Section 1.a., every employer will be required to provide sick leave of some sort, whether paid or unpaid. While most employers will be required to provide paid sick leave, those employing four or less employees are only required to provide “…up to forty (40) hours of unpaid sick leave in each calendar year.” However, if the employer employs four or less employees but has net income in excess of $1,000,000 in the previous calendar year, the employer would be required to provide forty (40) hours of paid sick leave.

Below are additional requirements under Section 1.b. and 1.c. as they relate to the amount of paid sick leave required for varying employee counts [see https://bit.ly/39Xk9T6],

“b. For employers with between five [5] and ninety-nine [99] employees in any calendar year, shall be provided with up to forty [40] hours of paid sick leave.”

“c. For employers with one hundred [100] or more employees in any one calendar year, each employee shall be provided with up to fifty-six [56] hours of paid sick leave each calendar year.”

Section 196-1.4(a) of the Regulations provides some additional clarification regarding employee counts. Under Section 196-1.4(a) “…the number of employees employed by an employer during a calendar year shall be determined by counting the highest total number of employees concurrently employed at any point during the calendar year to date.” Therefore, if the employee count falls below a specified amount provided for under Section 196-b during a calendar year it would not permit an employer to reduce the amount of paid or unpaid sick time based on the reduction. The lower employee count can be only be used for purposes of the following calendar year, or other regular, 12-month period utilized by the employer. However, if the employee count increases during a calendar, and an employer is subject to the higher requirements under Section 196-b, the accrual calculations would begin prospectively from that point on, and any sick time accrued previously would remain the same.

How & When Do Employees Accrue Paid Sick Leave?

While Section 196-b goes into effect on Jan. 1, 2021, employees have already begun to accrue paid sick leave starting on Sept. 1, 2020. According to Section 196-b, Section 3, “employees shall accrue sick leave at a rate of not less than one [1] hour per every thirty [30] hours worked, beginning at the commencement of employment or the effective date of this section.”

Additionally, Section 2 allows employers to choose to provide the full amount of applicable sick leave at the beginning of each calendar year, or other regular one-year period that the employer utilizes, however, once the employer provides the amount of the sick leave up front, it is not then permitted to “…reduce or revoke any such sick leave based on the number of hours actually worked by an employee during the calendar year…” or other 12-month period utilized by the employer. Employers must revisit their paid/unpaid sick leave policies before January 1st and modify, as necessary.

Section 6 of Section 196-b further provides that “an employee’s unused sick leave shall be carried over to the following calendar year, provided, however, that: (i) an employer with fewer than 100 employees may limit the use of sick leave to 40 hours per calendar year; and (ii) an employer with one hundred or more employees may limit the use of sick leave to 56 hours per calendar year.” However, if an employee is terminated, or if the employee resigns, retires or leaves the company then the employer is not required to pay the employee for unused sick pay.

Employee’s Expanded Permitted Uses for Paid Sick Leave

Under Section 4.a., employees are permitted to use their sick days for the common reasons, but the law further expands the scope. Below is a list of permitted uses:

“(i) for a mental or physical, 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 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;

(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, or other services program;

(b) to participate in family 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 violence 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.”

Section 196-b also provides an expanded definition of “family member,” which includes “…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.” It also goes on to clarify the definitions of a child and a parent. Employers must be aware of these expanded definitions.

What Types of Documentation May an Employer Request?

According to Section 196-1.3(a), an employer is not permitted to require an employee to provide “…medical or other verification in connection with sick leave that lasts less than three consecutive previously scheduled workdays or shifts.” Section 196-1.3(b) also prohibits an employer from requiring or causing an employee to incur any costs or fees in order to obtain such “…medical or other verification of eligibility for use of sick leave.”

Section 196-1.3(c) prohibits employers from requesting confidential information, such as “…the nature of an illness, its prognosis, treatment, or other related information, nor shall any employer require any details or information regarding leave taken pursuant to Section 196-b(4)(a)(iii) of the Labor Law (otherwise known as safe leave).” Additionally, “an employer may not require that the attestation explain the nature of the illness or details related to domestic violence, sexual offense, family offense, human trafficking, or stalking that necessitates the use of safe leave.” Section 196-1.3(d) does allow an employer to request certain limited documentation. In the event an employee uses sick leave for three (3) or more days, then an employer may request the following:

“(1) An attestation from a licensed medical provider supporting the existence of a need for sick leave, the amount of leave needed and a date that the employee may return to work, or

(2) An attestation from an employee of their eligibility to leave.”

Retaliation and Record-Keeping Requirements of Employers

An employer is strictly prohibited from retaliating against an employee as a result of an employee exercising employee’s rights under Section 196-b. Section 7 specifically provides that, “[n]o employer or his or her agent, or the officer or agent of any corporation, partnership, or limited liability company, or any other person, shall discharge, threaten, penalize, or in any other manner discriminate or retaliate against any employee because such employee has exercised his or her rights afforded under this section, including, but not limited to, requesting sick leave and using sick leave….” It recommended that any employee who believes that he or she has been retaliated against should contact the Department of Labor’s Anti-Retaliation Unit at 888-52-LABOR or LSAsk@labor.ny.gov.

Under the New York State Labor Law, employers are required to maintain payroll records for six (6) years, and this now includes the maintenance of records reflecting the amount of sick leave accrued and used by each employee on a weekly basis. Section 11 of Section 196-b further requires that “upon the oral or written request of an employee, an employer shall provide a summary of the amounts of sick leave accrued and used by such employee in the current calendar year and/or any previous calendar year. The employer shall provide such information to the employee within three business days of such request.” It is important for employers to have this information readily available so as to avoid any violations under the new law.

Violation of Section 196-b by Employers

According to the FAQ’s [see https://on.ny.gov/36Z7JIq], if employers fail to provide paid sick leave to an employee in violation of Section 196-b they “…may be subject to civil/administrative actions and/or criminal penalties, including but not limited to, an order assessing the full amount of the wage underpayment, 100% liquidated damages and civil penalties in an amount up to double the total amount to be due.” Violations can be costly and onerous on an employer, especially if the employer is required to engage legal counsel to defend itself.

It is recommended that all employers with questions regarding Section 196-b and the accompanying regulations reach out to employment law counsel or its payroll administrators for guidance. It will be likely now more than ever that employers and employees will be affected by Section 196-b in light of the COVID-19 Pandemic. Therefore, it is important that employees and employers know their rights, duties and obligations under this new law.