NYC Amends ESSTA to Better Align with NYS PSL

September 28, 2020, New York City Mayor Bill De Blasio signed legislation amending the City’s Earned Safe and Sick Time Act (ESSTA) to align more closely to the New York State Paid Sick Leave law (NYPSL). The changes became effective on September 30, 2020.

Important Note:

The amendments to ESSTA require employers to note on employee pay statements or a separate written document provided to the employee each pay period (1) the amount of sick and safe leave accrued and used by an employee during a pay period, and (2) the employee’s total balance of sick and safe leave. Previously ESSTA had no such requirement.

New York City has advised via its Consumer Affairs website that “employers that could not operationalize the documentation requirement by September 30, 2020, but are working in good faith on implementation will have up to November 30, 2020, to ensure compliance without a penalty.” The Consumer Affairs website can be found at NYC DCA.

The NYPSL legislation does not contain a wage statement or other writing mandate. However, the NYPSL requires that employers provide a summary of leave accrued and used by an employee in the current and/or any previous calendar year, upon the oral or written request of an employee, within three business days of the request. The amendments to ESSTA did not incorporate this provision into the changes effective September 30, 2020.

Background

ESSTA:

ESSTA originally went into effect on April 1, 2014, and gave workers who are employed by an employer with five or more employees up to 40 hours of sick time in a year to recover from physical/mental illness or injury, seek medical treatment, or care for a sick family member.

As of May 5, 2018, an employee’s sick time under the law can also be used for “safe time” purposes to address certain non-medical needs that may arise if employees or their family members are victims of domestic violence, a sexual offense, stalking, or human trafficking. For example: to meet with a lawyer or social worker or to relocate for safety.

NYPSL:

On April 2, 2020, Governor Andrew M. Cuomo announced that the Fiscal Year 2021 state budget includes a permanent mandatory paid sick leave program. The State Legislature passed the budget immediately after that, and Governor Cuomo signed the bill on April 3, 2020. The legislation took effect 180 days after signing, on September 30, 2020.

Some highlights of the permanent paid sick leave are as follows:

  • Employers with fewer than five employees and a net income of less than $1 million must provide workers with up to 40 hours of unpaid sick leave a year.
  • Employers with five to 99 employees, and those with fewer than five employees and a net income of more than $1 million, must provide workers with up to 40 hours paid sick leave annually.
  • Employers with 100 or more employees must provide workers with up to 56 hours of paid sick leave per year.
  • The paid sick time accrues at a rate of at least one hour per every 30 hours worked.
  • The sick leave time is available for use for:
    • Mental or physical illness.
    • Injury or health condition of a family member.
    • Seeking services related to domestic violence, a sexual offense, stalking or human trafficking.

It is important to note that, while covered employers must allow employees to begin accruing sick leave time starting on September 30, 2020, employees need not be permitted to use the accrued time until January 1, 2021. However, employers may allow the use of leave before that date if they so choose.

Changes Made to ESSTA

Below is a summary of a few of the critical changes made to ESSTA effective September 30, 2020.

Covered Employees: Previously, ESSTA required employees to be employed in New York City for more than 80 hours in a calendar year in order to fall within the definition of “employee.” The amendment removed the more than 80 hours of employment requirement in the City in a calendar year.

Obligation to Provide Paid Leave: Under the previous rules, ESSTA allows 40 hours of unpaid sick leave in a calendar year for all employers with less than five employees and a net income of less than one million dollars during the previous tax year. The ESSTA, as amended, expressly requires employers with four or fewer employees and a net income of one million or more dollars in the previous tax year to provide up to 40 hours of paid sick leave, aligning with NYPSL.

Accrual Rate and Caps: The ESSTA amendment conforms accrual caps with the NYPSL law. Under the old rules, ESSTA required accrual of leave at a rate of one hour of leave for every 30 hours worked, as does the NYPSL law. However, ESSTA permitted all employers, regardless of size, to cap annual leave accrual at 40 hours. Now, like the NYPSL law, ESSTA limits

accrual at 40 hours for employers with 99 employees or less; however, employers with 100 or more employees will be required to provide accrual of up to 56 hours of leave annually.

Start of Accrual: Under the NYPSL law, employees begin earning leave upon commencement of employment or the law’s September 30 effective date, whichever is later, and the same commencement of employment or law’s effective date standard is currently provided for under ESSTA. The ESSTA amendment provides that accrual begins upon commencement of employment or “the effective date of the local law that created the right to such time, whichever is later.”

Eligibility to Begin Using Accrued PSL: Previously, ESSTA permitted employers to impose a waiting period of up to 120 calendar days following an employee’s commencement of employment before leave can be used. In contrast, the NYPSL law provides that employees need not be permitted to begin using accrued leave until January 1, 2021, and notably does not otherwise appear to permit an employer-imposed usage waiting period on new hires. The ESSTA amendment, conforming with NYPSL, removes the usage waiting periods for newly hired employees and instead provides that employees are entitled to leave as it is accrued.

Rate of Pay: Previously, ESSTA required that leave be compensated at the same rate as the employee earns from their employment at the time it is used. The amendment deletes this language and adopts the NYPSL provision requiring that leave be paid at the employee’s regular pay rate. However, while the NYPSL law provides that employees cannot be paid less than the applicable minimum wage under New York Labor Law (NYLL), the ESSTA amendment provides that the rate of pay “shall not be less than the highest applicable rate of pay to which the employee would be entitled pursuant to [the NYLL] or any other applicable federal, state, or local law.”

Notice and Posting: Since ESSTA was amended in 2018, employers have been required to distribute a written notice explaining certain leave rights and providing information regarding the benefit year in English and the primary language of the employee if an agency translation has been made available, within 30 days of the effective date of the 2018 amendment or upon commencement of employment, if later. However, employers were permitted, but not required, to post the notice at their business location. The amendment to ESSTA requires updated notices of rights to be distributed to employees upon commencement of employment. For employees employed prior to September 30, within 30 days of the effective date of the amendment. Additionally, employers are now required to post the notice conspicuously at their business location in an area accessible to all employees.

For a copy of the amendments to the New York City ESSTA, click on the link following link: NYC ESSTA Amendments.

Need assistance in complying with ESSTA or NYPSL? Contact your dedicated YPTHRM representative at 516 567-9790 or email us at info@ypthrm.com.

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