NYC Department of Consumer Affairs Holds Public Hearing to Discuss Proposed Sick Leave Rules

On April 29, New York City (“City”) employers joined together to voice concerns about the Earned Sick Time Act (“Act”) and proposed rules to implement the Act at a public hearing in front of the City’s Department of Consumer Affairs (“Department”).  They testified on key problems created by the proposed rules and the Act, including the following:

1.  Joint Employer Issue:  Although the Act itself does not mention the concept of joint employer, the proposed rules do.  However, the rules never set forth any test or method for making a determination of joint employer relationship.  If passed, employers will be left guessing what is meant by “joint employer.”  Further, the rules state that joint employers “may be separate and distinct entities with separate owners, managers and facilities.”  Absent guidance to the contrary, this provision could mean two completely separate employers who happen to employ the same worker are joint employers under the Act!

2.  Time Increment Issue:  As most employers know, the Act allows employers to “set a reasonable minimum increment for the use of sick time not to exceed four hours per day.”  This provision suggests that four hours per day is a reasonable increment to use and is beyond reproach.  The proposed rules, however, rephrase this concept and state that an employer can choose the increment “not to exceed four hours per day, provided such minimum increment is reasonable under the circumstances.”  This language seems to say that an increment of four hours or less may not be reasonable in some circumstances.  If these proposed rules become final, an employer will never know if its chosen increment is reasonable until after a challenge has been filed and resolved.  Such uncertainty is unreasonable.

3.  Investigation Issue:  Perhaps the most troubling issue in the proposed rules is hiding in a seemingly administrative provision regarding the Department’s power to investigate complaints related to the Act.  The proposed rules allow the Department to conduct an investigation on its own initiative where the Department has reason to believe an employer’s conduct related to the Act warrants investigation.  The language then states “including, where: . . . the department has reason to believe that the employer fails to pay minimum wage, prevailing wage, engages in discriminatory practices or retaliation, misclassifies employees as independent contractors or denies undocumented employees sick time required under the Earned Sick Time Act . . .”  Does this now mean in addition to the state and federal governments, the local government can investigate wage and hour issues and general issues of discrimination, all under the auspices of this Act?  Such redundancy is wasteful and unnecessary.

4.  Part-Time Employee Issue:  Neither the Act, the amendments, nor the proposed rules address a key accrual issue.  The purpose of the Act was to give City employees five days of paid sick leave to take care of their health needs or those of family members.  Because the accrual and use provisions of the Act are drafted in terms of hours, the Act awards employees who work 40 hours per week with five paid sick days and employees working less than that per week with more than five days.  For example, if an employee works 20 hours per week, that employee could take ten paid sick days (i.e., ten days where they are paid four hours each day)!  This is not consistent with the intent of the Act and this unexpected result should be corrected.

In addition to those issues, there are many other problems with this legislation.  One issue many employers may miss is that employees who work more than 80 hours in the City are entitled to sick leave, regardless of where the employer is located.  The Department’s informational packet on the Act gives the example of a trucking company based in Buffalo whose employees load and unload the trucks in the City.  According to the example, if employees are loading and unloading the trucks in the City for more than 80 hours per calendar year, they are entitled to sick leave under the Act.  This means thousands of employers, whose employees work in the City for a small amount of time per year, are covered under the Act and must provide paid sick leave!

On a much broader level, there are a number of proposed regulations that have no basis under the Act, such as those concerning the sale of an employer’s business.  Needless to say, if the Act is silent on an issue, the regulations should not be used to expand the Act.  This point was raised during the hearing and will hopefully be corrected.

Now that the Department gathered public comments on the proposed rules, they will bring these concerns to the City’s legal team to determine whether or not the proposed rules will be implemented and if they are, what changes, if any, will be made.  Hopefully the City listened to the employers and their representatives and will actively consider the issues raised.

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