Provided by: Jennifer Kirschenbaum, Esq.
June 22, 2021
Written by Kieran Bastible, Esq.;Kbastible@kirschenbaumesq.com
As you are likely aware as an avid reader of this Newsletter, since January 1st New York’s Labor Law requires New York private sector employees to offer paid sick leave (“PSL”) to their employees. Compensation must be at the employee’s “regular rate” or the minimum wage, whichever is greater.
How is this “regular rate” properly calculated for a non-exempt employee who is not paid on an hourly basis, but instead by the piece, procedure, or on a commission basis? While New York State has released an informal guidance page, including frequently asked questions, regarding the fairly new PSL, no clarification on this particular issue has yet been forthcoming. While (hopefully) future guidance from the Department of Labor will address this issue, what are employers (and their employment counsel) to do in the interim?
Rather than dust off the “Magic 8 Ball”, we look west to California (which became the first state to pass a paid sick leave law, effective in 2015) for their treatment of “piece rate” workers, as a possible portent of future New York State guidance to come. California has revised its approach several times. When first enacted, the law provided that for employees paid on a commission or piece rate basis, the applicable rate of pay was equivalent to the employee’s total wages over the previous 90 days divided by the number of hours worked. Soon thereafter, the law was amended, directing employers to pay non-exempt employees at the regular rate applicable during the workweek in which the employee uses sick leave, and also deleting the provisions in the original law addressing the calculation of sick leave for employees paid on a commission or piece rate basis.
The law also directs that California employers must pay out sick leave benefit payments to employees no later than the payday for the next payroll period after the sick leave was taken. Perhaps due to the “rush to calculation” of the regular rate for non-hourly paid employees this would cause, California has now adopted an “either/or” approach; to wit, paid sick time for nonexempt employees shall be calculated either: (i) in the same manner as the regular rate of pay for the workweek in which the employee uses paid sick time, whether or not the employee actually works overtime in that workweek; or (ii) by dividing the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment. https://www.dir.ca.gov/dlse/paid_sick_leave.htm
Whether New York follows California’s lead remains to be seen. Both states’ respective employment laws are “pro-employee.” Regardless, we believe that a “if they don’t work, they don’t get paid” approach to piece work employees – at least in the realm of the PSL – will not fly.
To discuss the impact of New York's paid sick leave law and how to implement at your practice, email Kieran (firstname.lastname@example.org) or Taryn (TCrimi@kirschenbaumesq.com). Initial consults for newsletter members are not charged.