New NYS DOL Guidance on NYS COVID-19 Paid Sick Leave
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Dear Clients, Colleagues and Friends,
All of us at Moskowitz & Book, LLP have gotten off to a great start of 2021 and have been providing much employment law advice to our clients. We look forward to an end to the global pandemic with good health for all and great potential for growth and profit in the upcoming year.
As the Biden administration gets off to a running start, we are expecting many additional employment law changes this year and will keep you apprised. We have written about one development at the federal Department of Labor below. In the meantime, New York State employers should take note of the important details below.
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New NYS DOL Guidance on NYS COVID-19 Paid Sick Leave
On January 19, 2021, the New York State Department of Labor (“NYS DOL”) released its guidance (“Guidance”) regarding NYS’s COVID-19 sick leave law, which went into effect in March 2020. Paid sick leave under the federal Families First Coronavirus Act (“FFCRA”) expired on December 31, 2020. Therefore, paid sick leave directly related to COVID-19 is currently mandatory only under NYS’s COVID-19 paid sick leave law.
The NYS DOL provides guidance based on four scenarios:
- Employee Susie has completed her period of mandatory quarantine or isolation. Susie’s employer may not require her to take a COVID-19 test before returning to work. However, if Susie does take a COVID-19 test and receives a positive test result, she must not go back to work. Susie will be entitled to take leave under NYS’s COVID-19 sick leave law, even if Susie already took sick leave under that law. Susie will be deemed to be under an order of quarantine or isolation but must submit proof of the positive COVID-19 test from a licensed medical provider or testing facility.
- Tariq, after completing a mandatory order of quarantine or isolation, continues to test positive for COVID-19. He cannot return to work. Tariq will be entitled to take sick leave under NYS’s COVID-19 sick leave law, even if he already took sick leave under that law. Tariq will be deemed to be under an order of quarantine or isolation but must submit proof of the positive COVID-19 test from a licensed medical provider or testing facility.
- If an employer requires Sarah to stay out of work due to her exposure or potential exposure to COVID-19, even if the exposure did not occur in the workplace, the employer must pay Sarah at her regular rate of pay until (a) the employer permits Sarah to return to work; or (b) Sarah becomes subject to a quarantine or isolation order and is eligible to take sick leave under NYS’s COVID-19 sick leave law.
- An employee is allowed to qualify for sick leave under NYS’s COVID-19 sick leave law for a maximum of three orders of quarantine or isolation. The second and third orders must be based on positive COVID-19 test results.
Overall, the new guidance suggests the following:
- Employees may be entitled to leave for up to three times under the NYS COVID-19 sick leave law.
- Employees other than nursing home staff are not required to undergo another COVID-19 test after completing their quarantine or isolation period.
- Employers must pay their employees at their regular rate of pay if it requires such employees to stay home due to exposure or potential exposure to COVID-19, even during the period when the employee does not qualify for sick leave under the NYS COVID-19 sick leave law.
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Increases to NYS Paid Family Leave in 2021
In 2021, eligible employees are entitled to use up to twelve (12) weeks of NYS Paid Family Leave (“PFL”) to bond with their newborn baby, care for a family member with a serious health condition, or help loved ones while a family member is deployed for active military service. Last year, employees were entitled to up to ten (10) weeks of PFL.
Under the NYS emergency leave law for COVID-19, employees also may use PFL if they or their minor dependent child are under an order of quarantine or isolation due to COVID-19.
Employees on PFL will receive 67% of their average weekly wage (“AWW”), capped at $971.61 (67% of the 2021 Statewide Average Weekly Wage (“SAWW”)). Both the AWW and SAWW increased from last year’s 60% rate.
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Staffing Agencies as “Retail or Service Establishments” According to the DOL
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In opinion letter FLSA2021-6, the U.S. Department of Labor (“DOL”) addressed whether “staffing firms that recruit, hire, and place employees on temporary assignments with clients” would be exempt from the overtime pay requirements of the Fair Labor Standards Act (“FLSA”) through the FLSA’s “retail or service establishment” exemption (Section 7(i) of the FLSA).
The FLSA’s retail or service establishment exemption allows for eligible commissioned employees of a retail or service establishment to be exempt from overtime pay. Such commissioned employees must (1) be working at a “retail or service establishment”; (2) earn a regular rate of pay that is at least one and one-half times the applicable minimum wage; and (3) earn more than fifty percent of their pay in commission payments.
In this opinion letter, the DOL discussed whether staffing agencies could qualify as “retail or service establishments”.
For a business to qualify as a “retail or service establishment,” (1) the business must “engage in the making of sales of goods or services”; (2) “75 percent of its sales of goods or services, or of both, must be recognized as retail in the particular industry”; and (3) “not over 25 percent of its sales of goods or services, or of both, may be sales for resale.” As to the first factor, the DOL determined that staffing agencies engage in the sale of services by providing temporary staffing and permanent recruitment services to their clients. The DOL’s opinion was not changed by the fact that the agencies’ clients are commercial entities (that is, other businesses).
The second factor, according to the DOL, involves two questions: whether the business’ sales are recognized by its industry as “retail” and whether the business has a “retail concept.” The DOL left it to the staffing agencies to determine if their industry recognizes their sales of services as “retail,” and turned to the question of whether staffing agencies have a “retail concept.” The DOL noted that it had previously issued non-exhaustive lists of establishments that do or not have a “retail concept,” but withdrew those lists in May 2020. Instead, the DOL will examine whether an establishment meets the criteria sets forth in DOL regulation 29 CFR § 779.318(a). Applying those criteria here, the DOL determined that staffing agencies may have a “retail concept.”
As for the third factor, the DOL determined that because staffing agencies rarely engage in the reselling of staffing and recruitment services to other businesses (e.g., Agency A sells its services to Agency B, then Agency B resells such services to Client), they likely meet the third test for “retail or service establishment”.
The DOL concluded by noting that its opinion applies to a “typical” staffing agency. Not every staffing agency will necessarily qualify as a retail or service establishment, and not every commissioned employee of such agency will qualify for the overtime exemption.
Staffing agencies should seek legal assistance to counsel them in determining whether their commissioned employees may be exempt from the FLSA’s overtime pay provisions.
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Religious Teachers and the Ministerial Exception...
The Department of Labor ("DOL"), in its opinion letter FLSA2021-2, recently concluded that private religious school teachers may be exempt from the wage and hour requirements of the Fair Labor Standards Act ("FLSA") if such teachers qualify as...
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