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Recently enacted New York State FY 2021 budget legislation (SB 7506B, Part J) establishes a statewide paid sick leave law that, effective September 30, 2020, requires employers to allow employees to begin accruing sick leave and to begin providing accrued sick leave to employees beginning January 1, 2021.

According to Governor Cuomo's news release, employers with 100 or more employees will be required to provide at least seven days of job-protected paid sick leave each year (businesses with five to 99 employees will be required to provide at least five days of paid leave).

Employers with four or fewer employees will be required to provide five days of job-protected unpaid sick leave each year.

The Governor stated that the law provides for "the strongest paid sick leave program in the nation" expanding on the paid sick leave legislation (SB 8091) enacted in March 2020 that requires paid sick leave for individuals affected by COVID-19 (go here for more information).

SB 7506B creates a permanent statewide paid sick leave law that will be available for all illnesses. (EY Payroll Newsflash Vol. 21, #102, 3-26-2020.)

Modified paid sick leave law provisions

Effective September 30, 2020, employees will begin to accrue sick leave at a rate of one hour for every 30 hours worked. Beginning January 1, 2021, employers must allow employees to begin to use their accrued sick leave upon oral or written request. Sick leave must be provided for the employee's personal or family member illness, injury, health condition or incident of domestic violence, regardless of whether such illness is diagnosed or requires medical care at the time of request.

The law requires that:

• Employers with four or fewer employees allow employees to use up to 40 hours of accrued unpaid sick leave (unpaid sick leave converts to paid sick leave if the employer had a net income of greater than $1 million in the previous tax year)
• Employers of five to 99 employees provide up to 40 hours of accrued paid sick leave to employees
• Employers of 100 or more employees provide up to 56 hours of accrued paid sick leave to employees

Employers may choose to "front load" sick leave, providing employees with the total amount of required sick leave at the beginning of the year, rather than waiting for the employee to accrue the hours; however, an employer making this election may not reduce or revoke sick leave if the employee does not work sufficient hours during the year to reach an accrual that is equal to the sick leave provided.

An employee's unused sick leave must be carried over to the next year; however, an employer may limit the use of sick leave to (a) 40 hours per calendar year if the employer has fewer than 100 employees and (b) 56 hours per calendar year if the employer has 100 or more employees.

Employers are not required to pay employees for unused sick leave upon termination, resignation, retirement or other separation from employment.

Employers with a pre-existing sick leave policy are not required to provide any additional sick leave if the employer's plan meets or exceeds the requirements under the new law.

Paid sick leave must be paid at the same rate that the employee is paid for working hours or the state minimum wage, whichever is greater.

Upon returning from sick leave, employees must be restored to their same position and pay as was provided before the leave.

Recordkeeping requirements

Upon employee oral or written request, an employer must within three business days of the request provide a summary of the sick leave accrued and used for the current and previous calendar years. As is the case for other payroll records, employers are required to maintain a record for a minimum of six years noting of the amount of sick leave provided to each employee.

Certain New York cities can impose their own sick leave laws

The law does not preclude a city with New York state with a population of one million or more from enacting and enforcing its own paid sick leave law that meets or exceeds the requirements of the new statewide law. Any local government's (i.e., New York City) paid sick leave ordinance already in effect as of the effective date of the new statewide law will not be limited or diminished.

As we've previously reported, New York also has a paid family leave program that is funded by employee payroll deductions and provides eligible employees with job-protected paid time off to bond with a new child, care for a family member with a serious health condition and assist loved ones when a family member is deployed abroad on active military service.

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EY Payroll News Flash