New York Paid Sick Leave Accrual Rules: Statutory Compliance Guide
An authoritative legal guide to New York Labor Law § 196-b, detailing statutory accrual formulas, employer size and revenue tiers, carryover obligations, and zero-tip-credit wage standards.
Need to calculate accrued sick leave?
Calculate annual caps, accruals, and balance valuations with our interactive engine.
1. Statutory Scope & Coverage (Labor Law § 196-b)
Enacted in 2020, New York Labor Law § 196-b mandates job-protected sick leave for all private-sector employees working within the State of New York. The law covers all employment types—including full-time, part-time, seasonal, and temporary employees—without any exclusion based on industry or job title.
2. Employer Headcount & Net Income Tiers
The exact amount and character of sick leave owed depends on the employer’s total headcount across all locations and, for small businesses, their net taxable income:
| Headcount | Net Income Criterion | Mandatory Benefit | Annual Usage Cap |
|---|---|---|---|
| 0 – 4 Employees | ≤ $1,000,000 net income | Unpaid Sick Leave | 40 Hours / Year |
| 0 – 4 Employees | > $1,000,000 net income | Paid Sick Leave | 40 Hours / Year |
| 0 – 4 Employees | Net income unknown / unresolved | Legally Unresolved (Requires tax verification) | 40 Hours / Year |
| 5 – 99 Employees | Any revenue level | Paid Sick Leave | 40 Hours / Year |
| 100+ Employees | Any revenue level | Paid Sick Leave | 56 Hours / Year |
*Note for micro-businesses: An employer with 4 or fewer employees cannot assume unpaid status without verifying prior-year net taxable income under NYLL § 196-b(1)(a). If net income exceeds $1 million, paid leave is mandatory.
3. Accrual Rate & Frontloading Rules
Employees accrue sick leave at a rate of not less than 1 hour for every 30 hours worked. Accrual begins on the employee's first day of work, and there is no 90-day waiting period to use accrued hours.
Alternatively, an employer may elect to frontload the entire 40 or 56 hours at the start of the calendar year or fiscal benefit year. If an employer frontloads the statutory maximum, they are relieved from tracking fractional weekly accruals.
4. Uncapped Continuous Accrual vs. Annual Usage Limits (Labor Law § 196-b(1) & (6))
A vital statutory distinction under New York Labor Law is that accrual itself is continuous and uncapped throughout the year. An employee working 2,400 hours accrues 80 hours of sick leave at the 1:30 statutory rate. The statute does NOT artificially cap the employee's earned balance at 40 or 56 hours.
Instead, Labor Law § 196-b(6) regulates how accrued leave is handled:
- Mandatory Carryover: All accrued, unused sick leave must carry over to the subsequent calendar year. An employer cannot enforce a "use-it-or-lose-it" forfeiture policy.
- Annual Usage Limitation: Employers are legally permitted to limit an employee's usage of sick leave in any single calendar year to the statutory entitlement ceiling (40 hours for employers with under 100 employees; 56 hours for employers with 100 or more employees).
- New York City ESSTA Nuance: In New York City, the Earned Safe and Sick Time Act (ESSTA) covers domestic workers (40 hours paid leave regardless of employer size) and permits leave usage for "safe time" reasons associated with domestic violence, stalking, sexual offenses, or human trafficking.
5. Pay Valuation & Zero Tip Credit Protection
Paid sick leave must be compensated at the employee's regular rate of pay, but never below the statutory minimum wage ($17.00 Downstate, $16.00 Upstate in 2026). Under 12 NYCRR Part 196, employers are strictly prohibited from taking a tip credit against sick leave pay.
Frequently Asked Questions
How does an employee accrue sick leave in New York?
Under New York Labor Law § 196-b, employees accrue sick leave at a rate of at least 1 hour for every 30 hours worked. Accrual begins immediately upon hire with zero waiting period.
Can an employer cap the amount of sick leave an employee can use each year?
Yes. While employers must permit employees to carry over unused accrued sick leave to the next calendar year, employers may set an annual usage cap equal to the statutory entitlement (40 hours for employers with under 100 employees; 56 hours for employers with 100 or more employees).
Are small employers required to provide paid sick leave in New York?
It depends on net income. Small employers with 4 or fewer employees whose net income was $1 million or less in the prior tax year may provide unpaid sick leave. If their net income exceeded $1 million, they must provide paid sick leave.
Can tipped employees be paid the tipped cash wage when using sick leave?
No. Under 12 NYCRR Part 196, sick leave hours must be paid at the employee’s regular rate of pay, but never less than the basic statutory minimum wage ($17.00 Downstate, $16.00 Upstate in 2026). Employers cannot claim a tip credit for sick leave pay.