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News & Press: Laws & Regulations

Paid Sick Leave: Understanding Payout and Carryover for Unused Sick Leave

Tuesday, December 02, 2014  
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As the year comes to a close, the New York State Restaurant Association and allied member Jackson Lewis would like to share important information regarding the New York City Paid Sick Leave law and how to manage employees’ unused sick time under NYC's Earned Sick Time law at year’s end. 

 

 

 

Employers have three options for how to handle accrued, unused sick time at the end of their benefits year. For employers that use the calendar year to track paid sick time, the new year begins on January 1st. For employers that use a different period of time, the same options apply.

Option 1) Payout & Front-load Accrual
Employers can payout all accrued, unused sick time from the previous year and front-load or provide all 40 hours of sick time on the first day of the new year. The benefits of paying out unused sick time is to incentivize employees to not use their sick time frivolously, especially during the busy holiday season, and removes the burden of tracking how much sick time employees accrue throughout the year.

Option 2) Carryover & Front-load Accrual
Employers can carryover accrued, unused sick time to the new year and front-load or provide all 40 hours of sick time on the first day of the new year. The benefit of this option again is to relieve the burden of tracking how much employees accrue as well as minimize the overall financial obligation associated with paying out accrued, unused sick time at year’s end. 

Option 3) Carryover & Track Accrual
Employers can carryover accrued, unused sick time to the new year and continue to track how much sick time employees accrue in the new year. The benefit of this option again is to minimize the overall financial obligation associated with paying out accrued, unused sick time at year’s end as well as limit the amount of sick time that can be used at the start of the year since accrual will occur over the course of the year. 

Other Important Information for Restaurants to Know:
- If you select to front-load accrual in the new year and choose not to track accrual, employers must still track usage of sick time. 
- Employers are not required to allow an employee to use more than 40 hours of paid sick time in a benefits year. This is true even if an employee carries over time from the prior year. For example, if an employee carries over 20 hours from the previous year and then accrues 40 more hours in the next year, while the employee would have 60 hours in their “bank” of sick time, the employer still only has to allow the use of up to 40 hours of paid sick time in that year.
- Employers can require employees to submit written verification that they used the sick time in accordance with the law but can only request medical documentation from employees if the employee uses sick time for more than three consecutive workdays. 

 

Still have questions? Contact the Labor Hotline for all NYC related questions at 212.545.4005. This hotline is an exclusive member benefit provided by our strategic partner and allied member Jackson Lewis. 

 

For more information on the Paid Sick Leave law, visit the Department of Consumer Affairs Website and review information the Association has previously provided:


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