When Must New York Employers Pay for Unused Paid Time Off?

When Must New York Employers Pay Employees for Their Unused Paid Time Off?

When Must New York Employers Pay Employees for Their Unused Paid Time Off?

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The Empire State has some of the most comprehensive legal protections for employees in the country.  Employees in New York State have a right to paid time off under the state’s paid sick leave law.  Understanding this law, among other relevant employment statutes in New York, is key to navigating your rights as an employee and your requirements as an employer.

IS PAID TIME OFF REQUIRED IN NEW YORK?

Employees in New York have a legal right to take paid time off work for specific reasons under state law.  The New York State Sick Leave Law (NYSSLL) requires employers with five or more employees, or a net income of over $1 million, to provide paid sick and safe leave to employees.  A qualifying employee may take paid time off for sick leave relating to mental or physical health, including diagnoses and preventive care.  A qualifying employee may also take paid time off for safe leave if the employee or their family member has been the victim of domestic violence.  The employee must be paid their normal rate of pay for any paid leave time, or the applicable minimum wage rate, whichever is greater.  At minimum, employees accrue sick and safe leave at the rate of one hour off for every thirty hours worked.  All private-sector employees in New York State are covered, regardless of industry, occupation, part-time status and overtime exempt status.

WHEN ARE EMPLOYERS REQUIRED TO PAY OUT UNUSED PAID TIME OFF?

Employers are not required to pay employees for unused sick leave at the end of an employment relationship under the New York paid sick leave law.

But, if an employee has an employment contract specifying a right to vacation days, the employer must pay the value of the unused vacation days as wages at the end of the employee’s employment under N.Y. Labor Law § 191(3).  New York courts have held that an agreement to give benefits or wage supplements, like vacation, can specify that employees lose accrued benefits under certain conditions.  If an employee has earned vacation time and there is no written forfeit policy, then the employer must pay the employee for the accrued vacation.

Rules for employees in the public sector differ, as the NYSSLL does not cover federal, state or local government employees.  In New York, some public employees have the right to be paid out their accrued sick leave upon retirement.  Some federal employees also are entitled to be paid out for their unused time when they leave employment, but these rules vary depending on the type of employee.  Notably, federal contractors do not have to pay out unused paid time off.

HOW DOES QUITTING VS. BEING TERMINATED AFFECT THE RIGHT TO BE PAID OUT FOR UNUSED TIME?

The manner in which an employee leaves employment only impacts the right to be paid out if that is what is specified in the employment contract or policy.  For example, if the contract or policy states that employees are only paid for unused time if they are laid off, but not if they quit or are terminated for cause, then those rules govern.

HOW SHOULD EMPLOYERS AND EMPLOYEES HANDLE DISPUTES OVER PAID TIME OFF?

Both parties should review the company’s policies, contracts and practices regarding paid time off.  This is important as there may be limitations on when monies are owed and what procedures must be followed, such as giving notice.  If either party fails to comply, it will impact their rights.

To avoid disputes, employers should proactively consult an attorney to draft a written policy and/or review an existing one to ensure it accurately reflects their wishes regarding paid time off and complies with any laws.  Employment contracts and collective bargaining agreements should also be reviewed in the same way.

Conclusion

If you are involved in a dispute over paid time off or other employee benefits, you should contact a qualified attorney.

Romano Law has broad experience with all types of employment matters including wage disputes, employee handbooks and employment agreements.  From New York to Miami and Los Angeles, our employment attorneys are ready to help.  Contact us to speak with a member of our team.

Photo by JP Valery on Unsplash

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This Blog is made available by Romano Law PLLC for general informational and educational purposes only, not to provide specific legal advice. By using this Blog you understand that there is no attorney client relationship between you and Romano Law PLLC or any individual contributor. You should consult a licensed professional attorney for individual advice regarding your own situation.

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