Summary: New York City issued final rules under the New York City Earned Safe and Sick Time Act (ESSTA), providing clarity on employer size, telecommuting and hybrid employees, employee notice, and documentation concerns, among others. These final rules are effective October 15, 2023.
Employers with New York City employees — take note of these ESSTA final rules highlights detailed below. Read on for more information.
The ESSTA requires employers with New York City employees to provide paid leave for the following covered reasons:
Employees accrue one hour of ESSTA time for every 30 hours worked within New York City. Employers must allow employees to use ESSTA leave as it is accrued, with no waiting period for new hires.
See table below outlining the maximum accrual amounts under the ESSTA[2]:
|
Employer Size |
Maximum Accrual Amount of ESSTA Leave |
|
100 or more employees |
56 hours of paid leave each calendar year |
|
5 – 99 employees |
40 hours of paid leave each calendar year |
|
1 – 4 employees and a net income of $1 million or more |
40 hours of paid leave each calendar year |
|
1 – 4 employees and a net income of less than $1 million |
40 hours of unpaid leave each calendar year |
Employees may carry over to the next calendar year up to 40 or 56 hours of ESSTA leave, depending on employer size (as outlined in the table above). However, employers are only required to allow employees to use up to 40 or 56 hours of ESST leave per calendar year.
In addition to distributing a written ESSTA policy to employees upon hire, employers must post the Notice of Employee Rights in a visible and accessible area for employees and also provide a written notice of this poster to employees upon hire.
On September 15, 2023, the New York City Department of Consumer and Worker Protection adopted final rules to the ESSTA as an amendment, providing much-needed clarity to employers on several outstanding questions highlighted below.[3]
Employer Size: The final rules clarify that employer size is based on the employer’s total number of employees nationwide, rather than just those employees working in New York City. Employer size during a given calendar year is determined by counting the highest total number of employees concurrently employed at any point during the calendar year-to-date, including part-time employees, employees jointly employed by more than one employer, and those employees on a leave of absence (paid or unpaid) or suspension who are expected to later return to active employment.
If an employer experiences an increase in the number of employees, ESSTA time must be provided on a prospective basis from the date of the increase in the number of employees.
Example 1: An employer with a calendar year of January 1 – December 31 has 90 employees. Employee A works 40 hours per week and used 20 hours of ESSTA time in 2020 and carried over 20 hours to 2021. In June 2021, the employer hired several new employees, bringing the total headcount to 110. Employee A has not used ESSTA time in 2021, and had worked 1,050 hours between January 2021 and the date the employee headcount went over 99 employees.
Result: Employee A has 55 hours of ESSTA time available for immediate use: 35 hours accrued in 2021 (1050 / 30 = 35) + 20 hours carried over from 2020 = 55.
Example 2: Under the same facts as Example 1, Employee A used 40 hours of accrued ESSTA time in May 2021, before her employer’s headcount increased above 100.
Result: After her employer’s headcount increases in June 2021, Employee A has 15 hours of ESSTA time available for immediate use: 35 hours accrued in 2021 + 20 hours carried over from 2020, - 40 hours used in 2021.
If an employer reduces the number of employees in a calendar year, they cannot reduce ESSTA time for their employees until the following calendar year.
Example: An employer with a calendar year of January 1-December 31 has four employees. On April 1, 2021, the employer hires three new employees, bringing the employer’s total number of employees to seven. On November 1, 2021, the employer lays off four employees, reducing the employer’s total number of employees to three. The employer must begin providing paid ESSTA time to all employees on April 1, 2021. The employer must continue providing paid ESSTA time to the three remaining employees through at least December 31, 2021, the last day of the current calendar year.
Telecommuting Employees: Employees who perform work by telecommuting while physically located outside of New York City are not covered under the ESSTA.
Example: An employee lives in Florida and works from home for a company based in New York City. The employee is required to attend daylong meetings at the New York City headquarters approximately twice a year. This employee is not covered under the ESSTA.
Hybrid Employees: For hybrid employees whose primary work location is outside of New York City, only hours worked within New York City will count toward the accrual of ESSTA time.
Example 1: A retail business based in New Jersey with locations in both New Jersey and New York City hires a new employee. The employee, who lives in New Jersey, will work primarily at a New Jersey location but may be asked to cover shifts in New York City when needed due to staffing shortages at those locations. The employer estimates that some months, the employee will work one to three six to eight-hour shifts in New York City, but that their New York City hours will vary and some months the employee may not work in New York City at all. This employee must accrue one hour of ESSTA time for every 30 hours worked within New York City and must be allowed to use their accrued hours for covered ESSTA reasons when scheduled to work within New York City.
Example 2: A construction business based in Nassau County, Long Island, does business both within New York City and on Long Island. An employee works a total of 300 hours for the employer at a site in New York City from June 1, 2021 to July 26, 2021. The employee accrues 10 hours of ESSTA time. The employee continues working for the employer at a site on Long Island from July 27, 2021 to September 28, 2021, working a total of 450 hours during that timeframe and accruing 15 hours of sick leave under New York State paid sick leave laws. On October 1, 2021, the employee is scheduled to report to work on Long Island but is unable to do so due to illness. The employee is not entitled to use ESSTA time at the time of his illness because he was scheduled to report for work on Long Island, rather than in New York City.
Employee Notice & Documentation: The final rules clarify that employers may require an employee to provide reasonable notice of the “foreseeable” need to use ESSTA time as long as their written ESSTA policy contains procedures for providing notice. A need is “foreseeable” when the employee is aware of the need to use ESSTA time seven days or more in advance.
If an employer requires documentation for ESSTA time, the employer must reimburse an employee for all reasonable costs or expenses incurred, including any fees charged by a licensed health care provider for providing the documentation to the employee.
Employers may not require ESSTA time documentation if the use of ESSTA time lasts three or fewer consecutive workdays. Finally, employers cannot require disclosure of details in the required documentation, except for the dates the employee needed to use ESSTA time.
Pay Statement Balance: Employers must provide employees their accrued, used, and total ESSTA leave balances on a pay statement, another form of written documentation, or through an employee-accessible electronic system each pay period. When an employee’s accrued ESSTA time balance exceeds the amount of ESSTA time the employee has available for use in a calendar year, the pay statement or other form of written documentation must inform the employee of the amount of ESSTA time available for use in the calendar year.
Example: An employee of an employer with 300 employees accrues 56 hours of ESSTA time in calendar year 1 and uses six hours of ESSTA time in calendar year 1. She carries over 50 hours from calendar year 1 to calendar year 2, accrues 56 hours in calendar year 2, and does not use any hours in calendar year 2.
Result: Her ESSTA time balance at the end of calendar year 2 is 106 hours:
50 hours carried over from calendar year 1 + 56 hours accrued in calendar year 2.
She may carry over 56 of those 106 hours into calendar year 3 and accrue another 56 hours in calendar year 3.
However, she may only use 56 hours in calendar year 3.
Enforcement: The final rules clarify that there will be a “reasonable inference” that the employer is in violation of the ESSTA (and subject to applicable penalties) if they:
Example: An employer with 83 employees does not maintain or distribute a written ESSTA time policy and does not provide employees with pay statements or other written documentation reflecting their ESSTA time accruals. Employees may take time off due to illness on an ad hoc basis and are paid for this time off at their supervisors’ discretion. As a result, some employees are paid for sick time and others are not. The employer has a policy or practice of not providing or refusing to allow the use of accrued ESSTA time in violation of the ESSTA.
Result: Each employee is entitled to relief in the amount of $500 per calendar year the unlawful policy or practice remains in effect under the ESSTA.
As the October 15, 2023 effective date for these ESSTA final rules approaches, employers with employees working in New York City are advised to:
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[1] ESSTA’s broad definition of family member includes the following: child (biological, adopted, or foster child; legal ward; child of an employee standing in loco parentis), spouse (current or former, and regardless of whether they reside together), domestic partner (current or former, and regardless of whether they reside together), parent, child or parent of an employee’s spouse or domestic partner, grandchild or grandparent, sibling (half, adopted, or step sibling), any other individual related by blood to the employee, any other individual whose close association with the employee is the equivalent of a family relationship.
[2] Employers may provide more generous leave than what is required under the ESSTA.
[3] Note the items highlighted in this article are a non-exhaustive list of all the ESSTA final rule amendment updates and do not include all of the changes.