Coughing up the Dough

The stats are in.  Not complying with NYC’s Paid Sick Leave law can affect your bottom line.  Fines for NYC based companies that broke the 2014 Paid Sick Day law have been shooting up.  Over $1.2 Million in fines were assessed against violating employers during the City’s last fiscal year (FY  2016) and over $2.1 Million in restitution was awarded to 13,675 employees for the same period.  During the prior Fiscal Year (FY2015), just $50 Thousand in fines were assessed and about $55 Thousand in restitution was ordered to 97 employees. (see Performance Indicators at 2016 Mayor’s Management Report)

Under the 2014 law, all NYC based businesses with five or more workers must offer at least five paid sick days a year. NYC DCA Paid Sick Leave Law  NYC’s Department of Consumer Affairs (DCA), which enforces the law, spent the first year focusing on outreach and education instead of enforcement, they say. They wanted employers and employees both to understand the new law and make appropriate accommodations before hammering them with fines.  

Keep in mind that one complaint can spark an investigation of a firm’s entire payroll.   According to the annual Mayor’s Management Report, the DCA says that “almost all investigations of a complaint were expanded to the entire workplace, based on experience that a single complaint frequently evidences a workplace-wide compliance issue.” 2016 Mayor’s Management Report

Clearly, the City thinks companies should be aware of the law by now and is enforcing compliance. While we applaud the DCA for taking an education and outreach approach first, perhaps more outreach is needed… especially when it comes to smaller firms.  Small firms typically do not have the same professional resources that larger firms have.  With no HR or payroll departments, or accountants and lawyers, to monitor their regular practices, they are particularly at risk for crushing penalties.  If the City is going to enact more such one-size-fits-all measures the outreach periods should be phased in or extended for smaller firms.

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