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New York City Update: New Developments in Paid Sick Leave, Consideration of Criminal Background Information

  • March 23, 2016

New York City continues to refine existing obligations imposed on New York City employers and propose new ones. The City has:

(i) enacted its first set of amendments to the New York City Earned Sick Time Act’s (ESTA) administrative rules originally issued in July 2014; and

(ii) proposed initial rules related to the criminal background information law, the Fair Chance Act (FCA).

ESTA Rules Amendments and Updated FAQs

Amendments to the New York City Earned Sick Time Act’s administrative rules became effective on March 4, 2016. Significant revisions include:

1. Clarification of recordkeeping requirements and the effect of a failure to maintain, retain, or produce required records pursuant to a notice of hearing issued to an employer.

  • In addition to the standard information required, records must include “[t]he date that the Notice of Rights as set forth in section 20-919 of the Administrative Code was provided to the employee and proof that the Notice of Rights was received by the employee.”
  • Further, the rules state an employer’s failure to maintain, retain, or produce records that are relevant to a “material fact” in a notice of hearing issued to the employer “creates a reasonable inference that such fact is true.”

2. Additional guidance on how covered employers calculate the number of employees in their business.

  • For example, the rules state how an employer with a fluctuating workforce should count the number of employees to determine its “business size.”

3. A definition for “temporary help firm” as “an organization that recruits and hires its own employees and assigns those employees to perform work or services for another organization to: (i) support or supplement the other organization’s workforce; (ii) provide assistance in special work situations including, but not limited to, employee absences, skill shortages or seasonal workloads; or (iii) perform special assignments or projects.”

4. Clarification of joint employer situations, including those involving temporary help firms. The amendments state:

  • employees who are jointly employed by two or more joint employers will have their employment for each of the joint employers considered as a “single employment” for purposes of accrual and use of sick time;
  • temporary help firms that place temporary employees in an organization are “solely responsible for compliance with all provisions of the [ESTA] for that temporary employee”; and
  • regardless of the size of the organization(s) where a temporary help firm places its employees, if the temporary help firm is covered under the ESTA, it must provide sick time to all of its employees.

5. Clarification of minimum increments of usage and addition of language that will enable an employer to set intervals and time frames for the use of sick time.

  • For uses of sick time beyond four hours, employers may establish “fixed periods of thirty minutes or any smaller amount of time for the use of accrued sick time” and can “require fixed start times for such intervals.”
  • The following examples are included in the rules for illustrative purposes: “An employee is scheduled to work from 8:00 am to 4:00 pm Mondays. She schedules a doctor’s appointment for 9:00 am on a Monday and notifies her employer of her intent to use sick time and return to work the same day. The employer’s written sick time policies require a four hour minimum increment of sick time used per day. If she does not go to work before her appointment, she should appear for work by 12:00 pm. [The] employee…arrives to work at 12:17 pm. Under her employer’s written sick time policies, employees must use sick time in half-hour intervals that start on the hour or half-hour. The employer can require the employee to use four-and-a-half hours of her accrued sick time and require her to begin work at 12:30 pm. Similarly, if the employee wanted to leave work at 8:40 am to go to her 9:00 am doctor’s appointment, the employer could require the employee to stop work at 8:30 am.”

6. Clarification on accrual and hours worked calculations for certain employees, rate of pay calculations for piecework basis employees, and what is included in the rate of pay.

7. Additional guidance on employee notification of use of sick time and the requirement that employers maintain a written sick time policy, including the content, such as:

  • whether sick time is provided up front each year or based on hours worked (and how much time is provided up front each year);
  • clarification that an employer’s policy or procedures on employee notice requirements cannot require employees to “appear in person at a worksite or deliver any document to the employer prior to using sick time” when the need to use sick time is not foreseeable;
  • language regarding an employer’s right to discipline employees who abuse sick time through a pattern of behavior suggesting abuse, by providing a non-exhaustive list of examples of potential abuse: (1) using sick time on or adjacent to weekends, regularly scheduled days off, holidays, vacations, and so on, (2) using sick time on days when other leave was denied, or (3) using sick time during shifts or on workdays when the duties required are perceived as undesirable; and
  • consequences for failing to provide requested documentation within the period of time specified in the policy.

8. Clarification regarding penalties and relief in the event of ESTA violations, including:

  • $500 penalty for failure to respond to a complaint or provide information requested by the Department of Consumer Affairs regarding a complaint;
  • Entitlement to relief for “each and every employee” of an employer whose policy or practice did not allow accrual or use of sick time in the form of: (1) placing 40 hours of sick time to the employee’s sick time balance, or (2) if known, placing the number of hours of sick time the employee should have accrued (but no more than 80 hours) to the employee’s sick time balance; and
  • Imposition of penalties on a per-employee basis.

9. Clarification regarding retaliation cases, including:

  • An expansive definition of “adverse employment action” as “any act that is reasonably likely to deter an employee from exercising rights guaranteed under the Earned Sick Time Act”; and
  • That retaliation will be established when it can be shown “that a protected activity was a motivating factor for an adverse employment action, even when other factors also motivated the adverse employment action” and that a causal connection between an employee’s exercise of ESTA rights and an adverse employment action can be established either indirectly, if, for example, the adverse employment action “followed closely” after an alleged protected activity, or directly, if there is evidence of retaliatory animus.

On March 15th, within days after the final rules went into effect, DCA also updated its Frequently Asked Questions. (DCA is aware of discrepancies in the PDF version of the updated FAQs and states that it intends to correct these discrepancies promptly.) The January update to the FAQs incorporated revisions to align the guidance more closely with the rules. The recent substantive updates, summarized below, include:

1. FAQ 14 in Section II, relating to employees covered by a collective bargain agreement, no longer includes the following language:

  • “If a collective bargaining agreement includes an ‘evergreen clause’ providing that the agreement will remain in effect following its expiration date unless one side terminates the agreement, then the law will not apply until that option is exercised. Otherwise, the law will take effect for such employees on the date of the termination of their collective bargaining agreement, and employees will begin to accrue sick leave under the law beginning on that date.”
  • A new FAQ to Section IV provides guidance regarding unforeseeable uses of sick leave.

2. Revised FAQ 6 in Section IX states that the law requires employers to keep or maintain records establishing the date the notice was provided to an employee and proof the notice was received by the employee. Pursuant to § 7-13(b)(5) of the rules, an employer must maintain, among other things, “contemporaneous, true, and accurate records that show, for each employee…. The date that the Notice of Rights as set forth in section 20-919 of the Administrative Code was provided to the employee and proof that the Notice of Rights was received by the employee.”

Proposed FCA Rules

The New York City Commission on Human Rights has proposed amendments to title 47 of the Rules of the City of New York, which implement the provisions of Local Law No. 63 of 2015, the Fair Chance Act. According to the Commission, the proposed rules will “establish certain definitions and criteria around procedure and application of the Human Rights Law provisions regarding unlawful discrimination on the basis of criminal history against job applicants and employees.”

While much of the content of these proposed rules was promulgated in November 2015 when the Commission issued its Legal Enforcement Guidance, the proposed rules not only deviate from the Guidance on a number of issues, but also address issues not previously covered in the Guidance.

Many of the significant proposed rules, as well as examples where the proposed rules deviate from the Commission’s Guidance, are summarized below.

1. Establishment of per se violations.

  • A violation for “declaring, printing, or circulating, or causing the declaration, printing, or circulation of, any solicitation, advertisement, or publication…” can now be established even if it is not one “for employment” and is deemed to “express, directly or indirectly” a limitation or specification in employment regarding criminal history (as opposed to “stating” such a limitation or specification).
  • The proposed rules identify new per se violations:
  1. “using applications for employment that require applicants to either grant employers permission to run a background check, or to provide information regarding criminal history”
  2. “using a standard form, such as a boilerplate job application, intended to be used across multiple jurisdictions, that requests or refers to criminal history. Disclaimers or other language indicating that applicants should not answer specific questions if applying for a position that is subject to the Human Rights Law do not shield an employer from liability.”
  • “Taking an adverse employment action because of an applicant’s non-conviction” is no longer a per se violation.

2. Clarification of the types of prohibited criminal history questions and statements.

  • “any communications made, orally or in writing, to the applicant or employee for the purpose of obtaining criminal history, including, without limitation, stating that a background check is required for a position,” are prohibited during a job interview and at any other time before a conditional offer is extended.

3. Clarification of conditional offers, including the meaning of a conditional offer, the appropriate handling of pre-conditional offer inadvertent disclosures, and the procedures that must be followed when revoking a conditional offer.

  • With respect to revocation of a job offer based on the third reason set forth in the definition of conditional offer (“other information the employer could not have reasonably known before the conditional offer if, based on the information, the employer would not have made the offer and the employer can show the information is material”), the proposed rules no longer includes language from the Guidance requiring the information be material “to job performance.”
  • Unlike the Guidance, which described how to handle “inadvertent disclosures,” the proposed rules refer more broadly to “inadvertent discovery” and “unsolicited disclosure” and identify when employer liability is created under these circumstances. Similarly, the proposed rules no longer include language setting forth what type of behavior on the part of the employer would constitute good faith effort (to avoid liability).
  • For purposes of the New York Correction Law Article 23-A analysis, the proposed rules clarify that the duties and responsibilities of a job cannot be changed “upon learning of an applicant’s or employee’s criminal history.” Given that the Guidance prohibited the change “after making a conditional offer of employment,” the revision could be intended to clarify that such a change cannot be made in the case of a pre-conditional offer inadvertent discovery or unsolicited disclosure.

4. Establishment of guidelines for employers considering whether and how applicant and employee criminal convictions or pending cases relate to the duties of a prospective or current job or would pose an unreasonable risk to the property or the safety or welfare of specific individuals or the general public.

  • The “unreasonable risk exception” has been modified as follows:
  1. Under the Guidance: the analysis “begin[s] by assuming that no risk exists and then [requires the employer to] show how the Article 23-A factors combine to create an unreasonable risk.”
  2. Under the proposed rules: the analysis instead requires “consider[ing] and apply[ing] the Article 23-A factors to determine if in fact an unreasonable risk exists.”

5. Recharacterization of the time period that applicants or employees must be given to respond to an employer’s concerns after receiving a copy of the inquiry and the employer’s Article 23-A analysis.

  • The Guidance characterized this period predominantly as a three-day period.
  • The proposed rules set forth four factors that must be considered when determining what “reasonable time” is and state that in all cases, it cannot be less than three business days. The factors are:
  1. what additional information the applicant or employee is purporting to gather and whether that additional information would change the outcome of the Article 23-A analysis;
  2. why the applicant or employee needs more time to gather the information;
  3. how quickly the employer needs to fill the position; and
  4. any other relevant information.
  • Presumably in response to this recharacterization, the proposed rules state that applicants and employees must be informed of their rights upon receipt of the notice. This entails informing them how they can respond to the decision and the time frame within which they are required to respond.

6. Clarification of the exemptions permitted under the FCA.

  • While it unclear whether this amounts to a substantive change in the scope of the exemptions, the proposed rules deviated from language in the Guidance on “discretionary” versus “mandatory” barriers with respect to licensing and employment.
  1. Under the proposed rules, the exemption that is otherwise permitted “[i]n a position where federal, state, or local law requires criminal background checks or bars employment based on criminal history” does not apply to an employer authorized, but not required, to check for criminal backgrounds.
  2. Similarly, the proposed rules clarify that the exemption does not apply “simply because” a position for which criminal history “could be a mandatory barrier” based on the governmental licensure or approval required, and in such cases the employer is permitted only to inquire as to whether the applicant has (or can obtain within a reasonable period of time) the necessary license or approval.
  • With respect to the exemption relating to self-regulatory organizations, the proposed rules clarify that it “includes positions in which applicants or employees are not required to be registered with a self-regulatory organization (“SRO”), when the applicant or employee nevertheless either chooses to become registered while in the position or elects to maintain their prior registration.”
  • The proposed rules, for the first time, state that it is an affirmative defense that actions taken by an employer are permissible pursuant to a perceived exemption.

7. Expansion of enforcement and penalties sections.

  • The proposed rules include a discretionary mechanism for responding to charges of per se violations in which the Commission’s Law Enforcement Bureau would send an Early Resolution Notice to employers or licensing agencies.
  • The proposed rules provide three circumstances under which the presumption that, in revoking a conditional offer, an employer was motivated by an applicant’s or employee’s criminal history, can be rebutted.
  • The proposed rules also set forth a tiered penalty schedule for first and second violations based on the employer’s size (at the time of the violation), which range from $500 to $10,000.

8. Clarification regarding non-convictions: employers may not request information or inquire about non-convictions and may not deny employment or take any adverse actions based on non-convictions.

9. Clarification that the FCA applies equally to individuals with pending criminal cases.


All employers with New York City operations should review their compliance with the New York City Earned Sick Time Act and the New York City Fair Chance Act, as well as with other recent New York City enactments, such as the Stop Credit Discrimination in Employment Act and the New York City Commuter Benefit Law. Multi-state employers must do the same with the patchwork of state and local paid sick leave and ban-the-box legislation.

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