Employers in New York City or with employees who may be based out of New York City, should be familiar with New York City’s Safe and Sick Leave Law. Under this law, which applies to any employee working in New York City:

• Employers with 100 or more employees must provide up to 56 hours of paid leave each calendar year.
• Employers with 5 to 99 employees must provide up to 40 hours of paid leave each calendar year.
• Employers with four or fewer employees and a net income of $1 million or more must provide up to 40 hours of paid leave each calendar year.
• Employers with four or fewer employees and a net income of less than $1 million must provide up to 40 hours of unpaid leave each calendar year.
• Employers with 1 or more domestic workers must provide up to 40 hours of paid leave each calendar year; employers with 100 or more domestic workers must provide up to 56 hours of paid leave each calendar year.
• Employers must allow employees to use safe and sick leave as it is accrued, with no waiting period for new hires.
• Employees can use safe and sick leave for unexpected reasons without giving advance notice.
• Employers must provide employees with a written safe and sick leave policy that describes the benefit and how to use it.
• Employers can require documentation only when employees use more than three workdays in a row of safe and sick leave, if the documentation requirement is explained in the employer’s written policy.
• Employers must inform employees of their accrued, used, and total leave balances on a paystub or through an employee-accessible electronic system.

A difference from the New York State Safe and Sick Leave is New York City’s requirement that Employers inform their employees of their accrued, used and total leave balances on either the employee’s paystub or via an online portal accessible to all employees. This provision is enforced by the New York City Department of Consumer Affairs, and our office has seen increased enforcement of this provision.  Violations of this notice provision could result in steep penalties. For the first violation penalties could be as high as $500.00 per employee, and penalties may increase to $750.00 per employee for a second violation, and $1,000 per employee for any subsequent violations. Accordingly, the cost of non-compliance may be high.

Many employers may consider themselves to be in compliance because they have hired a payroll company to prepare their paystubs. However, outsourcing the payroll functions does not and cannot supplant an employer’s own internal systems to ensure compliance with the notice provision. While a payroll companies may market itself as experts in payroll compliance, looking to the fine print, Employers may be surprised to find that many payroll company’s terms of service still place the burden of ensuring compliance with federal, state and local compliance back on the Employer contracting for the service. Further, many terms of service have provisions that may limit the monetary limit in the event of any non-compliance.

Additionally, case law in the Second Circuit and in New York State Courts find that compliance with requirements under the federal Fair Labor Standards Act and New York Labor Law, even for notice requirements, are a non-delegable obligation; meaning it is solely the obligation of the Employer to ensure compliance. For this reason, cases filed against payroll companies for failing to ensure compliance with statutory notice and pay requirements have been dismissed in both federal and state courts.