As widely reported, on May 8, 2013, the New York City Council overwhelmingly approved the “Earned Sick Time Act,” which requires most private employers within the City to provide certain paid and unpaid sick leave to eligible employees.

By way of background, the Act, effective as early as April 1, 2014, will require employers with 20 or more employees to provide eligible employees working within the City (including temporary and part-time employees) with up to 5 paid sick days per calendar year. The paid leave requirement will be applicable to smaller employers with 15 to 19 employees as early as October 1, 2015. Notably, employers not subject to the paid leave requirement will nevertheless be required to provide unpaid sick leave.

These sick days will accrue from the inception of employment (or from the Act’s effective date, whichever is later) at the rate of one hour of leave for every 30 hours worked. After an initial 120- day waiting period for each employee, he or she will be eligible to use accrued sick days for absences from work in order to attend to his or her health needs or those of his or her family members. Employees may use up to 40 hours of sick leave per calendar year. Additional details, including other requirements related to employing domestic employees, may be found here.

Although the City’s Department of Consumer Affairs is charged with drafting regulations to flesh out the Act’s details and eliminate existing ambiguities in the law, there are a series of practical steps that employers may take now in order to reduce burdens associated with the Act and ensure compliance:

• Planning Ahead. January marks the ideal time to roll-out new or modified employment policies (such as those customarily contained in an employee handbook). Employers with workers in the City should therefore begin to review the Act’s requirements against their existing sick leave policies in order to determine whether changes will be necessary.
• Implementing a PTO Policy. Many employers currently maintain a vacation policy and a separate sick leave policy. One option to reduce the burdens associated with the Act includes enacting a single integrated PTO policy, which provides for days usable by the employee for either sick leave or vacation purposes.
• Reviewing Termination Practices. Although the Act requires the carry-over of accrued but unused sick leave from one calendar year to the next, the legislation does not require the payout of such leave upon an employee’s separation of employment. On the other hand, employers should be mindful that under existing law accrued vacation (or PTO) days must be paid out upon termination unless an employer has a written policy to the contrary.
• Confirming Recordkeeping Practices. The Act requires that employers maintain certain records evidencing compliance. As a result, now would be an appropriate time for an organization to review its employment recordkeeping practices, including with respect to payroll records, time-sheets, employee leave entries, etc.
• Independent Contractor Misclassification. The Act does not apply to bona fide independent contractors. However, employers should redouble their efforts to ensure that they are properly classifying workers, including by reviewing the company’s direction and control over its contractors and whether the worker truly has established his or her own independent business.