Employment Law Updates in New York City and State

Jonathan A. Wexler, Esq., and Kaitlyn Fallon, Esq.
Published Date:
Jan 1, 2015

This article is the second in a two-part series about Updates in Employment Law in the Greater Metropolitan Area. The first part was issued in the issue.

As discussed in Part I, which appeared in the November 2014 TaxStringer, New York State, New York City, and New Jersey have enacted various statutes that have changed the employment landscape for both employers and employees. In addition to those provisions discussed in Part I, New York City has adopted a paid sick leave law and has amended its Human Rights Law to protect employees and applicants against discrimination related to an applicant’s unemployment status. New York State also amended its wage law to allow employers to make deductions from an employee’s wages in order to recover certain overpayments and salary advances.

New York City Earned Sick Time Act

As of April 1, 2014, pursuant to New York City Administrative Code section 20-911 et seq., New York City employers with at least five employees must offer up to 40 hours of paid sick leave per year under the New York City Earned Sick Time Act (“NYCESTA or the Act”). Companies with fewer than five employees must offer its employees up to 40 hours of unpaid leave per year. This is based on employees earning leave time at the rate of one hour for every 30 hours worked up to an annual maximum of 40 leave hours. However, regardless of the number of employees, employers who already provide at least 40 hours of paid leave including paid time off, paid vacations and/or paid personal days that can be used by employees to take care of themselves or a family member, and for the other reason the act specifies it is not required to provide additional paid time off to comply with the Act.

Under the NYCESTA, paid leave may be used for absences resulting from: (i) an employee’s mental or physical medical condition, including diagnosis, care, and treatment; (ii) care for family member who needs medical diagnosis, care or treatment of a mental or physical illness, injury or health condition, or who needs preventive medical care; or (iii) closure of employee’s place of business, or of the employee’s child’s school or child-care provider, due to a public health emergency. “Family member” under the Act is defined as an employee’s child, spouse, domestic partner, parent, sibling (including any half-sibling, step-sibling or sibling related through adoption), grandchild, grandparent, or the child or parent of an employee’s spouse or domestic partner.

The NYCESTA covers full time, part time, and temporary employees who work in New York City at least 80 hours during a calendar year. The Act, however, does not apply to government agencies; federal work study programs; employees who are compensated by qualified scholarship programs; physical therapists, occupational therapists, speech language pathologists, and audiologists who are licensed by the New York State Department of Education; independent contractors; participants in work experience programs; employees who do not work more than 80 hours in a calendar year; or employees covered by a collective bargaining agreement when the law went into effect, until the expiration date of the CBA.

Under the NYCESTA, leave is earned at the rate of one hour of paid leave for every 30 hours worked, and employers may require that it be used in increments of four hours or more. Further, an employer can require an employee to provide up to seven days’ advance notice of the need to use sick leave if the need is foreseeable. However, if the need is unforeseeable, the employer may require an employee to give notice as soon as practicable. Additionally, if an employee is absent for more than three consecutive work days, the company may require that the employee provide the company medical certification of the need for leave.

Additionally, employees may carry over unused sick leave into the next calendar year. However, employers may cap the carry-over at 40 hours. As an alternative to permitting employees to carry over sick leave, an employer can choose to pay the employee for the unused sick leave at year end. Notably, upon termination of employment, companies have no obligation to “cash out” unused sick leave.

Finally, companies must give written notice to its employees of their sick leave rights and keep records of notices and other documentation of their compliance with the NYCESTA for three years.

New York City Law Against Unemployment Discrimination

On June 11, 2013, New York City amended its Human Rights Law to prohibit employment agencies and employers with at least four employees from discriminating against potential or actual job applicants on the basis of their being unemployed. As a result, an employer may not make any decisions pertaining to hiring, compensation, or terms and conditions of employment based on an employee’s or applicant’s employment status. Employers should not indicate on classified ads that applicants must be employed in order to apply or be considered for the position.

However, employers may still consider an applicant’s unemployment status where there is “substantially job-related reason” for doing so. In addition, an employer may permissibly inquire into the circumstances surrounding an applicant’s separation from employment, give priority to their own current employees for an open position, or set compensation or terms or conditions of employment based on actual amounts of experience.

Notably, under this law, individuals and the New York City Commission on Human Rights (NYCCHR) may now bring a private action against the employer alleging unemployment discrimination. Consequently, the individual or NYCCHR may seek damages, punitive damages, injunctive relief and attorneys’ fees.

Changes in New York State Wage Deduction Law

On October 9, 2013, New York State, which has traditionally been restrictive in its wage deduction provisions, amended the State’s labor law to allow employers to deduct salary advances (a cash payment by the employer to an employee under the expectation that such money will be earned in the form of future wages), and make deductions from employees’ paychecks in order to recover overpayments where those overpayments are due to a mathematical or clerical error.

In order to make deductions for overpayments, the employer must provide notice to the employee of the intent to make deductions and the employer must set up a procedure to allow the employee to contest the deduction. Additionally, only overpayments made within the eight-week period prior to the date of notice to the employee may be recovered. Accordingly, employers must be vigilant with respect to possible overpayments. The deductions for those overpayments, however, may be made over a period of six years from the date of the original overpayment.

In order to deduct an amount from an employee’s wages to recover an advance, the timing, duration and frequency of the repayment deduction must be agreed to in writing before the advance is made. In addition, deductions may be made only during the company’s regular payroll periods and no interest or fees may be charged. Furthermore, the agreement may provide that total reclamation may be made at the final payroll period if employment terminates before full repayment. Finally, the employer must implement a procedure that allows an employee to dispute to deductions.

Jonathan A. Wexler, Esq.Jonathan A. Wexler, Esq., is a shareholder at Vedder Price and a member's of the firm's labor and employment practice area in the New York office. He represents private-sector, not-for-profit, and public-sector clients in litigation matters in federal and state courts and before certain administrative agencies. He counsels clients on labor and employment law matters, including wage and hour matters and employee benefit issues. Mr. Wexler is a member of the Labor and Employment Section of the New York State Bar Association and he was selected for inclusion from 2009 to 2014 in New York Super Lawyers. He can be reached at jwexler@vedderprice.com or 212-407-7732.

Kaitlyn Fallon, Esq., is a first-year associate at Vedder Price.

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