Client Bulletin #529
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On February 26, the New York City Council overwhelmingly passed - by a vote of 46 to 5 - Mayor Bill de Blasio's proposed changes to New York City's new Earned Sick Time Act. Confronted with concerns by small business, the Council also provided a somewhat deceptive consolation to newly-covered companies.
As stated in our earlier bulletin, employers who currently provide paid time off or other vacation policies that already conform to the ESTA will not need to provide additional time off. However, even these employers must remain vigilant with respect to the ESTA's notice, posting, recordkeeping and other, ancillary, requirements. Moreover, it is not yet clear exactly how employers can ensure that their current sick leave policies will be deemed to satisfy the ESTA.
Set forth below are the primary changes and additions to the ESTA in the new bill:
- As anticipated, the ESTA now takes effect on April 1, 2014, for all employers with five or more New York City employees (a deadline previously imposed only for larger employers).
- The ESTA originally provided that employees could use earned sick time to care for a "family member," which was limited to an employee's "child, spouse, domestic partner or parent, or the child or parent of an employee's spouse or domestic partner." This definition has now been expanded to include grandchildren, grandparents, and siblings (also half-siblings, step-siblings, or siblings related through adoption).
- The new bill extends the statute of limitations for employees to file a complaint with the Department of Consumer Affairs from nine months to two years.
- The new bill lengthens the employer recordkeeping requirement from two years to three.
- The bill authorizes proactive enforcement of the ESTA by the Department of Consumer Affairs (which probably means that employers must live with the threat of inspections and investigations), but it also allows the Mayor to give other agencies enforcement power.
- The ESTA previously provided that it would take effect only if New York City's economic performance was sufficiently stable (according to analysis by an independent budget office). The new bill summarily removes this safeguard.
Many small businesses were not required to provide paid sick leave under the earlier version of the ESTA. Now, faced with the April 1 deadline, small employers are the most disadvantaged; they are the ones forced to hurriedly conform to the ESTA's myriad requirements. To ease this burden (that is, to appease small business interests), the Council added a six-month grace period, during which newly-covered companies (those with five to nineteen New York City employees) would not be subject to ESTA penalties for "unintentional" violations. This, however, is deceiving. Though these employers may escape the ESTA's additional penalties, small businesses are presumably still subject to the ESTA's underlying requirements and may well be liable to employees for time off which should have been paid. Of course, whether or not a violation was "intentional" can also be subject to debate.
Like it or not, Mayor de Blasio has pledged that the amended ESTA will be the very first bill he signs as Mayor. New York City employers - small, medium and large - should immediately amend their policies accordingly.
Constangy will be creating a model ESTA policy in the near future. In the meantime, if you would like to discuss the ESTA or how it applies to your company, please contact Phill Lipari or Amy Beth Dambeck in the Princeton Office.
About Constangy, Brooks & Smith, LLP
Constangy, Brooks & Smith, LLP has counseled employers on labor and employment law matters, exclusively, since 1946. A "Go To" Law Firm in Corporate Counsel and Fortune Magazine, it represents Fortune 500 corporations and small companies across the country. Its attorneys are consistently rated as top lawyers in their practice areas by sources such as Chambers USA, Martindale-Hubbell, and Top One Hundred Labor Attorneys in the United States, and the firm is top-ranked by the U.S. News & World Report/Best Lawyers Best Law Firms survey. More than 140 lawyers partner with clients to provide cost-effective legal services and sound preventive advice to enhance the employer-employee relationship. Offices are located in Alabama, California, Florida, Georgia, Illinois, Massachusetts, Missouri, New Jersey, North Carolina, South Carolina, Tennessee, Texas, Virginia and Wisconsin. For more information, visit www.constangy.com.