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April 14, 2014 | BusinessEmploymentFrom the blog

NYC’s Earned Sick Time Act: Is Your Small Business Ready?

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Domenic Romano

Founder & Managing Partner

On March 20, 2014, Mayor Bill de Blasio signed amendments to New York City’s Earned Sick Time Act into law.  The new regulations took effect on April 1, 2014.  The revised law impacts half a million more employees than the initial legislation passed back in June 2013.

City workers and lawmakers see the Act as a positive step toward job security and income equality, but how will the amended law affect business owners, and how can your NYC small business prepare for the change?  

New York City’s Sick Leave Law

The amended act adds a new Chapter 8 to Title 20 of the New York City Administrative Code.  The new law expands paid sick leave to nearly 1.2 million New Yorkers.  Supporters believe that the law “will ensure that workers—even in the smallest of businesses—cannot be fired for taking a sick day.”

NYC employers with five or more employees must provide up to 40 hours of paid sick leave per calendar year.  Those businesses with fewer than five employees must provide for unpaid leave.  Workers will earn one hour of sick leave for every 30 hours worked and can accrue up to 40 hours per year. Employers may choose—but are not required—to pay an employee for unused sick leave at the end of their calendar year.

Under the Act, employees can take sick days to care for either themselves or a family member, including a “child, spouse, domestic partner, parent, parent of a spouse or domestic partner, grandchild, grandparent, or sibling.”  An employee can use paid sick leave for doctor, dentist or eye appointments and not just when they or a family member fall ill.

The law also requires employers to provide written notice of employee’s rights to new workers at the time of hiring and to existing employees by May 1, 2014.  The notice must be posted in an area accessible to all employees.  It must include information about accrual, the dates of the calendar year of the business, the right to be free from retaliation and the right to file a complaint with the NYC Department of Consumer Affairs (DCA).  Employers must maintain records documenting their compliance with the Earned Sick Time Act for at least three years.

On March 27, 2014, the city proposed rules to help businesses understand their new responsibilities under the law.  The rules cover a variety of topics including:

  • How new businesses can calculate their size to comply with the law;
  • How an employee’s immigration status will affect his or her right to sick leave;
  • When certain employers will have to pay out sick leave to employees; and
  • How the DCA will enforce the new law.

Preventative Medicine for your NYC Business

These recent reforms raise new concerns and responsibilities for businesses in New York City.  By taking a few proactive steps, however, small business owners can help ease the transition into the city’s amended sick day law:

(1)    Make sure your employees are on notice and informed of their rights.  It is important that both you and your employees are fully educated on what rights are granted by the Earned Sick Time Act.  The DCA released a form notice for NYC employers.  Notice must be provided both in English and the employee’s primary language (if that language is available on the DCA website).

(2)    Maintain accurate records of your company’s compliance with the law.  The DCA recommends that employers keep a record of employees’ signed acknowledgment of the new sick leave law.  These records must be made available to DCA upon notice, and the DCA may conduct an investigation on its own initiative.  Employers may require documentation from a licensed health care provider if an employee calls in sick for more than three consecutive days.  Any health-related information must be kept confidential unless the employee permits disclosure or disclosure is required by law.

(3)    Start budgeting for the additional expense.  If your small business has five or more employees, increased costs to fund paid sick leave don’t have to break the bank.  The sick days only begin once a worker has been on the job for three months or 120 days after April 1, 2014 for existing employees.  One small business owner in Midtown says he “crunched the numbers and realized that he could absorb the cost.”

Further easing the burden, small businesses with fewer than 20 employees have a six-month grace period.  During the grace period, businesses will not be fined for unintentional violations.  Also, if a complaint is filed, employers will have the opportunity to cure the violation by producing the requested information or resolving the complaint to the DCA’s satisfaction.

Overall, New York City views the act as a positive step for businesses and their employees. “Our workers can’t work in fear of losing their jobs over an illness.  That doesn’t benefit New Yorkers or our businesses,” explained Hector Figueroa, President of workers’ union 32BJ.  City Councilwoman Margaret Chin provides further support, saying that “through conversations and compromise, we have put forth practical legislation that allows businesses to protect their employees as well as their bottom lines.”

The DCA is holding a public hearing on Tuesday, April 29, 2014, hoping to address the comments and concerns that businesses in New York City may have with the recent amendment.  Will business owners raise reasonable concerns about the amended sick leave law?  Is your business preparing for the additional requirements?

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