ADP HR Compliance Update

NY Issues Final Rule on Sick Leave; NYC Enacts Salary Transparency Law and Limits the Use of Automated Tools in Employment Decisions

Posted on January 19, 2021

The New York Department of Labor has issued a final rule to clarify sick leave requirements. New York City will regulate the use of automated tools in certain employment decisions and require employers to include the minimum and maximum starting salary for advertised jobs, promotions or transfer opportunities. Click on each of the updates below to learn more.

The New York Department of Labor (DOL) has issued a final rule to clarify sick leave requirements. The final rule took effect December 22, 2021.

Background:

New York state had previously enacted legislation that provides for up to 40 hours of sick leave. If you have five or more employees or a net income of more than $1 million, you must provide paid sick leave. If you employ fewer than five employees and have a net income of $1 million or less, you must provide unpaid sick leave.

The Details:

The final rule clarifies:

Definitions of confidential information, domestic partner, family offense, human trafficking, mental illness, net income, preventative medical care, sexual offense and stalking. See the text of the law for further details; and
Accrual, documentation protocol and employee counts for the purposes of sick leave.

Leave Accrual:

Under the final rule, accrued leave must account for all time that your employee works, even if the time worked is less than a 30-hour increment. You may round an employee's accrued leave to the nearest five minutes, or the nearest one-tenth or quarter of an hour, if it will not result in a failure to provide the proper amount of leave for all the time that your employees have worked.

Employer Requests for Documentation:

If sick leave lasts for three or more consecutive or previously scheduled workdays or shifts, you may request an attestation from:

An employee of their eligibility for leave; or
A licensed medical provider that supports the need for leave, the amount of leave needed and the date that the employee may return to work.

Prohibited Actions:

Under the final rule, employers cannot ask for:

The reason for an employee's leave;
An employee to pay the costs or fees associated with obtaining medical or other verification of eligibility for use of their sick leave;
An employee to provide confidential information, such as the nature of an illness, the prognosis, treatment, or other related information;
Details or information regarding the leave taken; or
For an employee's attestation to explain the nature of the illness or details that relate to their safe leave (domestic violence, sexual offense, family offense, human trafficking, or stalking).

Employee Count:

To determine the number of employees employed during a calendar year, use the highest total number of employees that are employed at the same time, at any point during the calendar year to date. This includes part-time employees and employees on paid or unpaid leave (sick leave, leaves of absence, disciplinary suspension, or any other type of temporary absence), who you reasonably expect to return to work.

Note: An employee that is jointly employed must be counted by each employer, even if the employee is not on an employer's payroll.

Increased Employee Count:

If an employee count increases during the calendar year above a paid sick leave threshold:

You must ensure that the accrual of additional required leave up to what an employee is entitled to is prospective from the date of the increase. However, that does not entitle employees to reimbursement for previously used unpaid leave or to use more than the maximum amount of leave that you have set;
You may credit prior accruals of sick leave (used and unused paid leave and used unpaid leave) in a calendar year towards increased paid leave obligations, but you cannot credit prior accruals of unused and unpaid leave towards paid leave obligations; and
You must retain all existing accruals of paid and unpaid leave notwithstanding an increase in the number of employees during a calendar year.

If you reduce the number of employees below a threshold, you cannot reduce the sick leave an employee is entitled to until the following calendar year.

Next Steps:

Train HR personnel and managers on the applicable updated sick leave requirements and visit the DOL website for updates.

New York City has enacted legislation (Int. No. 1894-A), that amends the New York City Human Rights Law and regulates the use of automated tools in certain employment decisions. The law takes effect on January 1, 2023.

The Details:

The legislation regulates New York City employers and employment agencies' use of artificial intelligence, data analytics, machine learning, or statistical modeling (automated employment decision tools) that is used to substantially assist or replace discretionary decision making for employment decisions.

The law generally applies to computerized tools or software programs based on algorithms to identify, select, evaluate, or recruit candidates, such as:

Recruiting tools that review résumés, chat with or rank applicants, or conduct behavioral analysis of candidates; and
Tools used to assess workers' skills, performance, and productivity or monitor field-based or remote employees.

Note: The law does not include a tool that does not automate, support, substantially assist or replace discretionary decision-making processes and that does not materially impact people, including, but not limited to, a junk email filter, firewall, antivirus software, calculator, spreadsheet, database, data set, or other compilation of data. The law is also silent on tools that identify employees for termination or reductions in force.

Notice Requirement:

Under the law, employers must notify a New York City resident that applied for a position (at least 10 business days before using the tool) if their application will be subject to an automated tool as part of the decision-making process and what specific job qualifications and characteristics the tool will use to assess workers and candidates. The notice must also inform candidates of their right to request an alternative selection process or accommodation.

Using an Automated Employment Decision Tool:

To use an automated employment decision tool, covered employers must retain an independent auditor to assess whether the tool's selection criteria result in disparate impact based on race, ethnicity, or sex on an annual basis. They must also publish a summary of the results and the distribution date of the tool on their websites.

The law also requires covered employers to retain information about the source and type of data collected for the tool and the businesses' data retention policy. Employers must disclose this information on their website or provide it to an applicant within 30 days of a written request, unless prohibited by law.

Penalties:

Employers who fail to comply may face fines of up to $500 for a first violation and $500 to $1,500 for subsequent violations.

Next Steps:

If considering the use of automated employment decision tools, New York City employers should:

Create a process for conducting independent audits as required by law;
Comply with the notice requirements above and consider issuing the required notice to all applicants for New York City openings and promotions to help minimize issues with capturing NYC residency;
Allow for employees and candidates to opt-out of the automated employment tool process; and
Update data-retention policies to ensure compliance with the law.

Covered employers should also anticipate further regulations from the City that clarify their obligations under the law.