Posted on: October 5, 2023
The state of New York has enacted legislation that increases the earnings threshold for exemption from certain wage payment protections under the New York Labor Law. New York City has issued a Final Rule that clarifies many provisions under the city's Earned Safe and Sick Time Act.
The state of New York has enacted Senate Bill 5572/Assembly Bill 6796, which increases the earnings threshold for exemption from certain wage payment protections under the New York Labor Law.
Currently, individuals employed in an executive, administrative, or professional capacity who earn in excess of $900 per week are exempt from certain wage payment protections relating to, among other things, pay frequency and direct deposit consent. As of March 13, 2024, the earnings threshold will increase to $1,300 per week, and employees who earn $1,300 or less will be subject to these wage payment protections.
Note: The increased threshold does not impact the weekly earnings threshold that workers employed in a bona fide executive or administrative capacity must earn to be exempt from overtime pay requirements.
Covered exempt employees earning $1,300 or less per week will be subject to the following labor law protections:
As of March 13, 2024, in addition to pursuing a private action against their employer, executive, administrative, and professional employees earning $1,300 or less per week may file a complaint with the New York Department of Labor (NYDOL) to recover owed wages.
Employers should note the increased earnings threshold for March 13, 2024 and adhere to the wage payment requirements for all covered employees.
Updated on: October 11, 2023
New York City has issued a Final Rule relating to the city’s Earned Safe and Sick Time Act. The Final Rule addresses several important topics including but not limited to calculating employer size, covered employees, calculating the rate of pay for safe and sick time purposes, accrual, pay statement requirements, employee notice and policy requirements and the impact of a business sale or transfer on employees’ safe and sick time balances.
The Final Rule takes effect on October 15, 2023.
The New York City Earned Safe and Sick Time Act (ESSTA) requires employers to provide the following amounts of Safe and Sick Time (SST) on an annual basis:
|
Employer Size |
Amount of Leave Per Year |
Paid or Unpaid? |
|
4 or fewer employees (businesses with net income of $1 million or less in the previous tax year) |
40 hours |
Unpaid |
|
4 or fewer employees (businesses with net income over $1 million in the previous tax year) |
40 hours |
Paid |
|
5–99 employees |
40 hours |
Paid |
|
100 or more employees |
56 hours |
Paid |
Employers must also provide the amount of SST accrued and used during a pay period and an employee’s total balance of accrued SST (this information may be reported on a pay statement or a separate written statement). Employers may also require reasonable advance notice of an employee’s need to use SST.
The Final Rule requires employers to calculate headcount based on their total number of workers employed at any point in the U.S. during the calendar year to date.
For purposes of counting employees:
The Final Rule also requires employers to immediately increase their employees' SST when the change in headcount requires the employer to provide more leave during the calendar year. For instance, if an employer's headcount increases from 75 to 115 employees (above 99 employees), the employer must allow their employees to use an additional 16 hours of SST (when applicable) for the remainder of the calendar year to reach the requisite 56 hours.
However, if their headcount falls below 100 employees, employers are prohibited from reducing SST benefits until the following calendar year.
Employers whose headcounts increase to an amount that requires them to provide additional paid SST are not required to retroactively pay employees for any previous, unpaid SST time that was already used by an employee.
See the Final Rule for additional details and examples.
The Final Rule clarifies that:
Examples in the Final Rule clarify that only hours worked within New York City count as hours worked for the purposes of accruing and using SST under the ESSTA.
The Final Rule indicates that employee accrual of SST must account for all time worked, regardless of whether time worked is less than a 30-hour increment. For the purposes of calculating accrual for time worked in increments of less than 30 hours, employers may round accrued SST to the nearest five minutes, or to the nearest one-tenth or quarter of an hour, provided that it will not result, over a period of time, in a failure to provide the proper accrual of SST to employees for all the time they have actually worked.
The Final Rule clarifies that an employer must pay an employee for SST at the employee's regular rate of pay at the time the SST is taken, provided that the rate of pay is the highest applicable rate of pay they would be entitled to under all applicable laws.
The Final rule indicates that if the employee uses SST during hours that would have been designated as overtime, the employer is not required to pay the overtime rate of pay. However, the employer may only deduct the number of hours of SST actually used by the employee from the employee’s SST accruals, regardless of whether those hours would have been classified as straight-time or overtime hours.
Employers that have tipped employees are not required to pay employees for lost tips or gratuities but also cannot take a tip credit for hours that the employee is out on SST. Employers must pay all employees at least the full applicable minimum wage unless a higher applicable rate applies. See the Final Rule for examples.
The Final Rule indicates that employers must report:
The Final Rule recognizes that an employee’s total SST balance may be greater than the amount of SST the employee actually has available for use in that benefit year. When this occurs, the employer must still inform the employee of the amount of SST they have available to use in that year.
The Final Rule provides that employers can meet the reporting requirements by including the required information on pay statements or by providing other written documentation to employees every pay period.
The Final Rule provides that the required accrual, usage and available balance information can be provided on a pay statement electronically or through other written documentation electronically if the electronic system:
The Final Rule indicates that an employer may require an employee to provide reasonable notice of the need to use SST provided the requirement to provide notice and the method of providing notice are set forth in a written policy.
An employer that requires notice of the need to use SST where the need is not foreseeable must provide a written policy that contains reasonable procedures for the employee to provide notice as soon as “practicable.”
Examples of such procedures may include, but are not limited to, instructing the employee to:
Any procedures for employees to give notice of the need to use SST when the need is not foreseeable may not include any requirement that an employee appear in person at a worksite or deliver any document to the employer prior to using SST .
In determining when notice is “practicable” in a given situation, an employer must consider the individual facts and circumstances of the situation.
An employer that requires notice of the need to use SST where the need is foreseeable must have a written policy that contains procedures for the employee to provide reasonable notice, which may include any of the reasonable procedures bulleted above. The policy must not require more than seven days’ notice prior to the date SST is to begin. Employers may require that such notice be in writing.
A need is foreseeable when the employee is aware of the need to use SST seven days or more before such use. Otherwise, the need is unforeseeable.
As a reminder, under current law, an employer may require an employee to provide documentation that supports the need for SST if the leave lasts four or more consecutive workdays.
Under the Final Rule, employers requiring written documentation of an employee's leave under the ESSTA must:
The Final Rule also clarifies:
Note: If an employer requests such documentation, it must give the employee at least seven days to submit the documents.
The Final Rule makes clear that business sales, transfers in ownership, and certain subcontracting changes won’t impact employees' SST balances. Employers that do not properly transfer an employee's accrued SST to a successor employer may violate the law, and the original and successor employer (and any joint employers) may be held responsible.
Employees must be allowed to use and receive payment for unused and accrued SST from their former employer, if they were entitled to a larger amount of SST under the law at their former employer.
The Final Rule specifies employer actions that may violate the law. See the Final Rule for further details and examples.
Review safe and sick leave and pay policies and procedures to ensure compliance with the Final Rule.
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