Employers Sick Over New Paid Sick Day Laws: The Epidemic is Spreading

Newark is the latest city to enact a mandatory Paid Sick Leave law, joining Jersey City and New York City. These laws will be impacting employers long after the latest bug goes around the workplace. These cities are joining other cities and states across the country, including Seattle, Connecticut, and San Francisco, in requiring employers to give their workers paid time off to manage their own illnesses or to take care of a child or close relative who is sick. Although each law is unique, Newark and New York City share common core requirements that will have major impacts on almost all businesses in the area.

Newark’s Paid Sick Leave Law will go into effect on May 29, 2014 after it was signed into law on January 29, 2014 by Mayor Luis Quintana. This is only two months after New York City’s analogous law went into effect on April 1^st of this year. In both cities, for employees to be eligible for paid sick leave they must work at least 80 hours a year in the city. For every thirty (30) hours worked an employee must be given one (1) hour of paid sick leave time. In New York City and in Newark, an employee is eligible to earn up to forty (40) hours* of paid leave time per year with the ability to carry those hours over. Unused sick time may be paid out in cash, or may be carried over to subsequent years; however, the employer is not required to permit the employee to use more than 40 hours in any given year. There is no requirement to pay out unused or “banked” sick time upon termination of the employee’s employment. In both cities, while accrual of sick days begins immediately, employees may be required to wait up to 90 days (in Newark) or 120 days (in New York City) before being allowed to use the sick days.

Along with these core requirements, the law requires that employers provide a city-created written notice to all new and current employers and post notice at the employer’s place of business. If employers violate these laws, employees can bring a claim in court and the employer can be fined up to $1,000 per violation along with other sanctions. Employers are prohibited from retaliating against employees who bring claims under this new law.

Employers that already have paid time off policies that meet or exceed the minimum requirements of these laws will not be required to provide additional paid sick time. Otherwise, company policies must be modified to conform to the Paid Sick Time Act. In the past, many employers provided paid time off only for full time employees, but the new laws do not permit employers to treat part time employees differently. These new Paid Sick time laws do not allow for an employer to inquire into the nature of the medical issue, which is in direct conflict with the Family and Medical Leave Act and other similar laws. This tension between these laws will have to be resolved over time.

These concerns only touch the surface of potential conflicts that may arise from the enactment of these new laws. Nevertheless, with these major cities adopting paid sick leave laws, the principle seems destined to spread to other cities and states. Legislation is already in the works in many jurisdictions. On the other hand, businesses are lobbying their states to adopt laws to prevent this type of legislation out of concern for its alleged negative economic impact. It is imperative for all local businesses must stay in tune with the changing legislation in their area on this matter.

*In Newark, for employers with fewer than 10 employees, the annual accrual of leave time is capped at 24 hours.

If you or your company would like more information regarding this issue or employment law, contact Thomas B. Wassel at twassel@cullenanddykman.com or via his direct line at  516-357-3868.

Special thanks to Maria Ehlinger, a law clerk at Cullen and Dykman, for her assistance with this post.