Fringe Benefits in New York

An employee’s right to receive paid leave, bonuses and severance pay depends on the terms and conditions that the employer has established either by a written policy or past practice for earning these wage supplements.

Paid Leave

N.Y.S. employers are not required to provide their employees with paid holidays, vacations, personal days or sick leave (unless they employ workers in N.Y.C. as discussed more fully below). Under Section 195 of the N.Y.S. Labor Law, employers must notify their employees either individually in writing or by public posting of the terms and conditions of the employer’s policies concerning sick leave, vacations, personal leave, holidays and work hours. An employer's failure to comply with the Section 195 notice requirement may prevent the employer from denying these benefits to their employees where there is a disagreement or ambiguity as to the terms of the policy in question.

Under New York City’s Paid Sick Leave Law, employers who employ workers within the City must give these employees sick leave (whether or not the employer is located in N.Y.C.), which they can use for the care and treatment of either themselves or an eligible “family member” (as defined therein). Employers with 5 or more employees who are hired to work more than 80 hours in a calendar year in New York City must provide paid sick leave. Employers with less than 5 employees must provide unpaid sick leave. Workers protected by this law include undocumented workers (workers without legal immigration status) and domestic workers (nannies and housekeepers).

Covered employees may be entitled to receive up to 40 hours of paid sick leave for their own illness and other “acceptable reasons” per calendar year for any absence due to: the employee’s mental or physical illness, injury or health condition; a need for medical diagnosis or treatment or “preventive medical care”; to care for a covered “family member” who needs medical diagnosis, care or treatment, or who needs preventive medical care; closure of the employer’s place of business by order of a public official due to a public health emergency; and to care for a child whose school or childcare provider has been closed by order of a public official due to a public health emergency.

If an employee’s need is foreseeable, the employee is required to provide seven (7) days’ advance notice of the employee’s need to use his/her accrued sick leave. If an employee’s need is not foreseeable, the employee is required to provide notice as soon as practicable under the circumstances. Employees may carry over accrued, unused sick leave from one calendar year to the next, but may not use more 40 hours of sick leave in a calendar year. Employees must use a minimum of four (4) hours of accrued sick leave per day. Employers are not required to pay employees for accrued but unused sick leave time upon the termination of their employment for any reason.

Bonuses

Under New York law, a bonus will be deemed as "wages" only if the bonus compensation is directly linked to the employee's own job performance and is therefore considered to be a "non-discretionary" bonus. In cases where the bonus compensation is based on discretionary factors such as the profitability of the employer's business, then the bonus is "discretionary" compensation which does not constitute "wages" under N.Y.S. law. An employee may still have a breach of contract claim for an unpaid discretionary bonus where the bonus compensation is offered by the employer as an inducement for the employee's continued employment and the employee reasonably relies upon such an offer in continuing his/her employment. Moreover, the regular payment of bonuses by an employer may constitute a past practice giving rise to an implied contractual obligation to continue the payment of the bonuses to its employees.

Severance Pay

Although severance pay is not required by either federal or N.Y.S. law, an employer's written policy or past practice of providing severance pay to its employees upon their employment terminations may establish a legal obligation to pay severance pay under either the federal law known as ERISA or as a breach of contract claim under N.Y.S. law. In these cases, an employee's severance pay entitlement must be reviewed on a case-by-case basis.

If you have any questions or need more information concerning your specific wage and hour issues, please call us at (914) 949-2700 or use our email form to get in touch with New York Labor and Employment Attorneys.