Category: Compensation

New York Paid Sick Leave FAQs

New York State Offers Paid Sick Leave FAQs

New York State’s paid sick leave law somewhat quietly went into effect on September 30, 2020. At that time, the NYS Department of Labor had not issued any interpretative guidance for employers. Luckily, no employees are eligible to take leave under the law until January 1, 2021. And now, at least, the DOL has issued paid sick leave FAQs that answer some questions (while perhaps raising others).

Basic NYS Paid Sick Leave Requirements

New York’s 2021 budget legislation included mandatory sick leave for employees throughout the state, except employees of government entities. All private employers with more than 4 employees must provide paid sick leave.

“Small” Employers

Employers with up to 4 employees must provide employees with at least 40 hours of unpaid sick leave each year.

However, employers of this size who had net income over $1 million in the previous tax year must pay employees for this leave.

“Medium” Employers

Employers with between 5 and 99 employees must provide employees with at least 40 hours of paid sick leave each year.

“Large” Employers

Employers with 100+ employees must provide employees with at least 56 hours of paid leave each year.

Accrual

Existing employees began accruing sick leave on September 30, 2020.

Employees accrue leave at a rate of not less than 1 hour per 30 hours worked.

Alternatively, employers can frontload all of the leave at the beginning of the year.

Basis for Leave

Eligible employees may take accrued sick leave for any of these reasons:

  • Mental or physical illness, injury, or health condition of either an employee or an employee’s family member, regardless of whether such illness, injury, or health condition has been diagnosed or requires medical care at the time employee requests leave.
  • Diagnosis, care, or treatment of a mental or physical illness, injury, or health condition of, or need for medical diagnosis of, or preventative care for either the employee or an employee’s family member.
  • Absences related to domestic violence.

Click here for more details on the statutory requirements.

DOL’s Paid Sick Leave FAQs

For the most part, unfortunately, the State FAQs essentially restate the law without clarification or elaboration. Here are some topics of interest that the DOL addresses (or fails to):

Telecommuters

Employees who telecommute are “covered by the law only for the hours when they are physically working in New York State.” This clarification presumably refers to the accrual component, not the taking of accrued leave. Someone who is on sick leave is not “physically working” anywhere.

This nuance should not provide much administrative complexity for employees who live and work entirely in New York State. Arguably they wouldn’t accrue time if they happen to conduct some work outside of the state on an isolated basis (e.g., while on vacation). However, it probably wouldn’t be worth the trouble to carve that work out for sick leave accrual purposes.

On the other hand, employees who work from home outside of New York for a New York-based company apparently don’t accrue sick leave unless they come into the state to work. Such employees would have to work at least 30 hours in New York to accrue their first hour of NYS sick leave.

Finally, there is the case of employees who split their time working inside and outside of New York. This scenario may create the biggest administrative hassle.

Will your company track hours separately based on work location? Or will you just give employees the benefit of the doubt for accrual purposes? How would this affect whether you frontload sick leave at the beginning of the year rather than tracking accrual?

Employer Size

As discussed above, the amount of sick leave employees can take (and whether it’s paid) depends on the size of the employer’s workforce and its net income. The law itself left some gaps in evaluating those factors. The paid sick leave FAQs don’t fill all of them.

One of the FAQs indicates that the employer must count all employees at its New York State locations. So, it’s not a facility-based analysis. But, frankly, that conclusion wasn’t in much doubt based on the law itself.

The FAQs don’t clarify, for example, whether telecommuters who primarily work outside of New York, but occasionally come into a New York office, count.

They also don’t expand on the calculation of “net income.”

Preventative Care

The New York paid sick leave law allows employees to use accrued time for preventative medical care. The FAQ document more specifically acknowledges that leave is available for routine doctor, dentist, and eye doctor appointments.

Safe Leave

The paid sick leave FAQs use the term “safe leave,” which is not found in the law. The DOL uses it to refer to the scenarios where victims of domestic violence can take sick leave.

An FAQ notes that an employee can use “safe leave” even if they have not contacted the police about the alleged perpetrator.

Bereavement Leave

The paid sick leave FAQs explain that bereavement is not a basis for using accrued sick leave.

The New York Legislature tried to create a State bereavement leave law in 2019, but Governor Cuomo vetoed the legislation.

Rate of Pay

When employees use paid sick leave, their employers need only pay their regular rate of pay for the time off. There is no requirement to pay overtime if sick leave occurs when the employee otherwise would have been working overtime.

In addition, employees do not need to make up for lost tips during leave time. However, employers likewise cannot apply a tip credit toward sick leave. Thus, tipped employees must receive sick leave based on the applicable minimum wage if their normal working pay rate is lower.

Employees who receive different rates of pay for different tasks must receive sick leave pay based on the weighted average of their pay rates.

Local Laws

The DOL’s FAQ document specifically mentions local laws in Westchester County and New York City.

Westchester County’s law provides that domestic workers accrue paid sick leave at the rate of one hour for every 7 days worked. An FAQ says that this benefit will remain available to domestic workers in Westchester.

Another FAQ confirms that “New York City may continue to enforce the provisions of the New York City Paid Safe and Sick Leave Law to the extent that such provisions meet or exceed the end standard or requirements for minimum hour and use set forth in the New York State Paid Sick Leave Law, as determined by the Commissioner of Labor.”

Paid Family Leave

An FAQ says that employees can choose to use paid sick leave during New York Paid Family Leave only if their employer allows them to. Doing so may permit an employee to receive their full salary rather than the lesser amount the Paid Family Leave program provides.

Carryover

The FAQs acknowledge that employees may be able to accrue more sick leave than they could take in any calendar year because the law requires employers to permit employees to carry unused time over from one year to the next.

Carrying over time may have no impact where the employer frontloads the full annual allowance at the beginning of the year. But, for employees who must accrue time, it enables them to have time available immediately each year.

Employees also keep all accrued time if they change positions within a company.

Unused Leave

The paid sick leave law does not require employers to pay out unused sick leave upon separation from employment. However, an FAQ cautions that “seasonal employees who maintain an ongoing employment relationship with their employer maintain their leave accruals through such breaks in employment.”

Donating Time

An FAQ allows that employers can permit employees to donate unused sick leave to other employees. However, this must be completely voluntary on the donating employee’s part.

Employers considering this approach should be mindful of potential implications. For example, employers cannot limit any employee’s total sick leave accrual over multiple years. Thus, some employees may have time to donate that they might never be able to use themselves. Plus, employees have different pay rates; therefore, donating time between employees could impact the cost of the sick time to the company.

Notice

The DOL confirms that employees can take sick leave without any particular amount of advance notice, as long as they make an oral or written request before taking leave. And employers may permit an employee to use available leave even if they didn’t notify the employer before taking the time off.

The full paid sick leave FAQs document is available here.

Your Company’s Next Steps

If you haven’t already determined how your company plans to implement the New York paid sick leave law, now is probably the time to act. If you’re not going to frontload sick time in January, then you need to start tracking employee accrual as of September 30, 2020. Regardless, you should review existing leave policies, including vacation and paid-time-off policies, to determine your overall approach to paid leave starting in 2021. Many companies have the option of structuring paid leave such that there is minimal additional labor cost. But this will likely require deliberate steps before the new year begins.

It remains to be seen whether the DOL will fill in more gaps before employees can start taking NYS paid sick leave. If your company falls into coverage gray areas or otherwise can’t determine how the law applies to you, then you should monitor potential further guidance from the State.

Horton Law will continue to track any developments. Sign up for our email newsletter or follow us on LinkedIn to stay updated.

Enhanced Unemployment

Enhanced Unemployment Offers Employers A New Option During Coronavirus Pandemic

Here’s a little secret. Most employment lawyers historically didn’t have to pay much attention to unemployment laws before COVID-19 came along. Employees would leave jobs and either get unemployment benefits or not, for various reasons. But new enhanced unemployment benefits under the federal Coronavirus Aid, Relief, and Economic Security (“CARES”) Act have suddenly created many new legal complexities surrounding the unemployment system. Solely in the vein of making a horrible situation slightly better, the CARES Act has produced some new approaches to layoffs and work reduction that might pose unique benefits to both workers and their employees.

Another secret. Here are the main takehomes from all the words below:

  • People on unemployment get an extra $600/week until the end of July 2020.
  • The extra money doesn’t come at the expense of employers.
  • New York’s Shared Work Program is a much more attractive option than it ever has been before.

If any of these points seem interesting, please keep reading.

New York State Unemployment

Even before the CARES Act came along, unemployment has long been a fairly complicated system. But most of that complication came in the back end. It involved the details of calculating who has worked enough to receive unemployment benefits, how much they earn, and how much each employer has to pay to enable workers to receive these benefits. Luckily, the government usually handles most of that complexity–in essence, they send workers checks and send employers the bill to cover the benefits.

Although the federal government plays a role in unemployment, it’s usually in the background. Processing unemployment claims and providing compensation to workers out of a job usually falls to the states. Thus, most employers in New York, for example, make regular contributions to the state unemployment insurance system. These contributions vary depending on how many workers receive benefits credited to a particular company’s account. In other words, companies with more employees (usually former employees) who receive benefits typically contribute more to the system. (Many non-profit organizations have the option of essentially being self-insured for unemployment. If they choose to do so, these organizations can refrain from paying unemployment “taxes” and instead reimburse the State directly for the amount of any benefits received by their employees.)

New York workers who become eligible for unemployment must first file a claim with the State. Then they have to re-certify on a weekly basis. The re-certification process serves to confirm that an individual is still out of work, but is available to work and actively looking for a new job. As long as that remains true, a claimant can normally continue to receive unemployment benefits for up to 26 weeks out of a year. To keep things simple, the amount of benefits is usually equal to half of what the person made while working, up to a max of $504 per week.

CARES Act Enhanced Unemployment

Among its numerous stimulus measures, the CARES Act includes many provisions that create temporary enhanced unemployment benefits. This article isn’t going to address all of them in detail. For example, the CARES Act enables self-employed individuals to receive unemployment benefits more easily than they normally could. It also allows workers to receive unemployment beyond the standard 26 weeks in some situations. These and other enhanced unemployment benefits may be relevant to your business or its employees. But, for now, we’re going to primarily focus on other aspects of the CARES Act unemployment enhancements that will likely have a broader and more immediate impact on how companies choose to manage their workforce during the coronavirus crises.

$600 “Federal Pandemic Unemployment Compensation”

Perhaps the most publicized aspect of the CARES Act unemployment measures gives virtually anyone receiving unemployment benefits an additional $600 per week. This extra benefit only lasts until July 31, 2020 (technically, the week of unemployment ending before that date). But it’s still a huge expansion of standard unemployment benefits.

Remember, the NYS max unemployment benefit is normally $504 per week. That’s what someone who normally makes $1,008 or more per week would get. Now they’ll receive $1,104. Yes, even if they made less than before!

The U.S. Department of Labor has issued guidance clarifying that people receiving unemployment will get the $600 extra per week as long as they normally qualify for at least $1 of state unemployment benefits. So, for example, someone who only made $400 per week when working could now get $800 on unemployment ($200 state unemployment benefits plus the $600 federal addition).

Employees will even receive the $600 bump if they’re only receiving partial unemployment benefits. In New York, workers whose pay is cut resulting in them working less than four days in a week and earning under $504 may qualify for partial unemployment. Though usually only a small benefit of a couple hundred dollars, the extra $600, plus whatever they’re still earning from working on a reduced schedule, will often result in such employees earning way more than they regularly would.

Though they might rather be working as normal, this enhancement is at least a meaningful upgrade for individuals on unemployment.

There’s also good news for employers (beyond the peace of mind in knowing their out-of-work employees are getting more money). The federal government is paying for this extra $600/week. Under existing New York law, this means it won’t count against employers’ unemployment experience rating. But that’s only the extra $600. The standard NYS portion will still be charged to the employer as normal.

Federal Funding of Shared Work Program

New York has had a “Shared Work Program” for decades. This program allows employers to establish a plan for reducing employee hours and compensation that will also enable workers to receive some unemployment to supplement the lower wages.

Employers must apply to the State for approval under this program. To qualify, a Shared Work Plan must:

  • Reduce work hours and corresponding wages 20–60%
  • Apply only to employees who normally work no more than 40 hours per week
  • Not reduce or eliminate fringe benefits (unless also doing so for the entire workforce)
  • Cover a period of up to 53 weeks
  • Replace a layoff of an equal percentage of employees

For more, read New York’s Shared Work Program Provides a Layoff Alternative

Some companies with seasonal fluctuations in their business routinely use this program. The primary benefit for employers is that they keep their workforce intact and in touch with the company. Another feature of the program is that employees don’t have to look for alternative work despite receiving partial unemployment benefits. The idea is for them to continue working for their current employer.

Usually, the State charges the employer’s account for the unemployment benefits employees receive under the Shared Work Program. However, the CARES Act creates full federal funding for the program through the end of 2020. This funding makes the program very attractive for employers who have less work to be done, need to save money, and don’t want to lose their employees during the COVID-19 crisis.

Note: The CARES Act does not provide federal reimbursement for Shared Work benefits paid to temporary, seasonal, or intermittent employees even though such workers can participate in a Shared Work plan under New York law.

Putting It All Together

To show the value of these enhanced unemployment provisions, let’s look at an example.

Company X

Suppose a company with 50 employees has 10 management employees who still need to and are able to work full-time right now. The other 40 are hourly employees who all make $20 per hour (not realistic, but it keeps the math simple). These employees all normally work a 40-hour week. The company qualifies as an essential business, so it can continue to operate. But customer demand is down, and management wants to keep employees safe through social distancing and remote work as much as possible. Consequently, there is much less work for these 40 employees to perform.

Let’s say the company decides it only has about 800 hours of work per week for the hourly employees. That’s half of the standard 1600 hours (40 employees x 40 hours/week). It could lay off 20 of the employees and let the other 20 work full-time, or it could let everyone work 20 hours instead of 40. Assume the company expects business to pick up later this year and will again need 40 hourly employees.

If the company either lays off half of the employees or reduces everyone’s hours, the affected employees can apply for unemployment. They will all get the $600/week enhanced unemployment benefit. The employer won’t have to pay for that. But it will have to pay for the standard NYS benefits the employee will also receive. That is, those benefits will affect the company’s unemployment insurance experience rating and the UI taxes it pays.

Shared Work Program Option

But, under the Shared Work Program, the federal government will pay all of the unemployment with no charge to the employer. Here’s what that would look like:

  • Each of the 40 employees will work 20 hours
  • Employee benefits remain intact
  • The company pays each worker $400/week (20 hours x $20/hour)
  • Each employee receives $200 in standard NYS unemployment for up to 26 weeks (subject to some individual circumstances)
  • Each employee also receives $600/week in enhanced unemployment until the end of July 2020

Through July, each employee will “earn” a total of $1,200 per week for working only 20 hours! That’s $60/hour, or triple their regular hourly rate!

At the same time, the company is still only paying $20/hour and saving $200/week per employee, or $8,000 for the 40 employees.

Can Your Company Take Advantage of This Situation?

The scenario above is just one hypothetical example. The math will vary for each company looking at options to reduce labor costs during the COVID-19 pandemic. But the Shared Work Program does offer flexibility. An employer can divide up its workforce in various ways to include/exclude different employees. You can modify the hour/compensation reduction between 20 and 60% to suit your business needs.

There may also be some logistical hassles. You do have to apply for and receive approval to participate in a Shared Work Program. But it seems New York is encouraging employers to take advantage of this option and may be able to process applications reasonably quickly.

 

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COVID-19 Leave Guidance

U.S. DOL Issues Preliminary COVID-19 Leave Guidance

On March 18, 2020, President Trump signed the Families First Coronavirus Response Act into law. Among other provisions, the law mandated two new forms of leave for employees of private employers with less than 500 employees and all government entities. The U.S. Department of Labor has the authority to issue regulations interpreting these leave requirements. Before releasing formal rules, the DOL has posted initial COVID-19 leave guidance on its website.

Fact Sheets

The DOL has created “Fact Sheets” targeting both employees and employers. These documents are available in English and Spanish and are available through these links:

Employee Paid Leave Rights

Employer Paid Leave Requirements

The fact sheets primarily outline the parameters of the law. For our full summary of the legislation, click here.

Questions and Answers

The Wage and Hour Division of the DOL has also created a “Questions and Answers” page as part of its COVID-19 leave guidance.

For simplification, the DOL is referring to the two new forms of leave as “paid sick leave” and “expanded family and medical leave.”

“Paid sick leave” refers to paid leave under the Emergency Paid Sick Leave Act. Eligible employees can receive up to two weeks of paid leave for absences related to COVID-19 (the novel coronavirus).

“Expanded family and medical leave” refers to paid leave under the Emergency Family and Medical Leave Expansion Act. It is a new form of leave under the Family and Medical Leave Act (FMLA) that allows employees to take up to 12 weeks of leave to care for a child whose school has closed or whose childcare is unavailable due to COVID-19. The last 10 of these 12 weeks would be paid leave for eligible employees.

The DOL seems to be updating this Q&A page periodically. It has already grown from 14 questions at launch on March 24th, to 37 questions on March 26th, as of the writing of this article.

The first question addresses when the leaves become available. Although most observers initially read the law to take effect on April 2nd, the DOL states that these new leave requirements take effect on April 1, 2020. Unless extended, these leave provisions will expire as of December 31, 2020.

Click to read: DOL Families First Coronavirus Response Act Questions and Answers

Here are a few notable clarifications in the COVID-19 leave guidance Q&As:

What records do employers need to keep to document these leaves?

Because employers can receive tax credits to offset the wages they pay to employees during these leaves, they must be able to demonstrate that the employee qualified for the leave under the law.

For paid family leave, the DOL says “you must require your employee to provide you with appropriate documentation in support of the reason for the leave, including: the employee’s name, qualifying reason for requesting leave, statement that the employee is unable to work, including telework, for that reason, and the date(s) for which leave is requested.” Documentation of the reason for the leave will also be necessary.

For expanded family and medical leave, “you must require your employee to provide you with appropriate documentation in support of such leave, just as you would for conventional FMLA leave requests.”

The IRS’s initial statement regarding the tax credits accompanying these paid leaves is available here.

What documentation does the employee need to provide to take these leaves?

For paid sick leave, supporting documentation “may include a copy of the Federal, State or local quarantine or isolation order related to COVID-19 or written documentation by a health care provider advising you to self-quarantine due to concerns related to COVID-19.”

For expanded family and medical leave, an employee could provide “a notice of closure or unavailability from your child’s school, place of care, or child care provider, including a notice that may have been posted on a government, school, or day care website, published in a newspaper, or emailed to you from an employee or official of the school, place of care, or child care provider.”

Can employees take intermittent leave?

Yes, if their employer allows it. The guidance says employees can take the leave in any time increment that the employer permits. But, then it limits that position.

Unless the employee is teleworking, paid sick leave is only available in full-day increments, except where the leave is to care for a child who is out of school/child care due to COVID-19.

Do employees have a right to these leaves if their worksite closed before April 1, 2020?

No, but they might be eligible for unemployment benefits.

What if the employer closes down while an employee is taking paid sick leave or expanded family and medical leave”?

The employer must pay for any leave before the closing. The employee is not eligible for paid leave after that, but they may become eligible for unemployment benefits.

Employee Rights Poster

By April 1, 2020, covered employers must post an employee rights notice regarding these new forms of leave in the workplace.

The DOL has prepared the poster, which is available here.

Future Developments & Compliance

The COVID-19 leave guidance now available on the DOL’s website references “forthcoming regulations.” These will likely go into even more detail on some aspects of the new laws. The regulations will also carry more legal authority than this preliminary website guidance. The DOL has suggested the regulations would come out sometime in April, despite the April 1st effective date.

Perhaps due to the need to issue the formal regulatory guidance, the DOL has indicated that it will not enforce these new leave requirements until April 18, 2020. However, employers who violate the law before then may still face some consequences. Employers who committed violations in early April despite “reasonable” actions “in good faith” will still have to repay employees who should have received paid leave as soon as practicable. The DOL may later seek additional penalties, however, for employers who willfully violated the leave requirements even before the DOL begins enforcement.

Consequently, employers who might be subject to these new requirements must get familiar with them and plan to comply as well as possible by April 1st.

 

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