The final rules provide guidance on how employers must administer the new 32-hour bank of immediately available unpaid protected time off.

On June 23, 2026, the New York City Department of Consumer and Worker Protection (DCWP) adopted final amended rules implementing the Earned Safe and Sick Time Act (ESSTA). The final rules, which take effect on July 23, 2026, incorporate the significant statutory amendments enacted by Local Law 145 of 2025 and impose several new compliance obligations on employers.

As discussed in our prior Alert, Local Law 145 amended ESSTA to expand the authorized reasons for safe/sick time, require employers to provide an additional 32 hours of unpaid safe/sick time immediately available upon hire and at the start of each calendar year, and codify paid prenatal leave obligations. The final rules largely adopt the regulatory framework set forth in the proposed rules issued in January 2026 but introduce several revisions in response to public comments. This Alert summarizes the key changes introduced by the final rules and offers guidance for employers navigating these new requirements.

Key Terminology Change

The final rules replace references to “safe/sick time” with the term “protected time off,” which has the same definition as “safe/sick time” under ESSTA. “Protected time off” encompasses both paid and unpaid time off from work that can be used for the purposes described in ESSTA, which include caring for the employee’s or their family member’s health; taking safety measures when the employee or their family member experience domestic violence, stalking, human trafficking or workplace violence; providing care for a child or care recipient; attending legal proceedings related to subsistence benefits or housing; and responding to a public disaster.

Administration of the 32-Hour Unpaid Protected Time Off Bank

The final rules provide guidance on how employers must administer the new 32-hour bank of immediately available unpaid protected time off:

• Employers may fulfill their obligation to provide 32 hours of unpaid protected time off by providing “some or all” of this time as paid leave. However, providing this time as paid leave does not reduce or eliminate an employer’s separate obligation to provide paid protected time off under ESSTA’s accrual or frontloading requirements (40 or 56 hours, depending on employer size).
• When an employee is absent for a qualifying reason and has both paid and unpaid protected time off available, the employer must provide paid protected time off first, unless the employee affirmatively requested to draw from the unpaid bank. Only after the employee exhausts paid protected time off may the employer rely on the unpaid bank to cover the absence.
• Employers are not required to carry over the unused portion of the 32 hours of unpaid protected time off from one calendar year to the next.
• Responding to concerns raised during the comment period, the final rules state that employers should pay employees for otherwise “unpaid” protected time off when necessary to comply with other legal obligations or to meet the criteria for an overtime exemption under state or federal law, such as the Fair Labor Standards Act salary basis test.

New Post-Employment Disclosure Obligation

One of the most significant additions to the final rules is post-employment access to leave records. When an employee’s employment ends, employers that use electronic systems for pay statements or leave tracking must either (a) continue to provide the former employee with access to the electronic system for six months following separation or (b) provide the employee with a written statement containing required leave information no later than one week after the employee’s final payday.

If a written statement is provided, it must include the following information:

1. The amount of protected time off accrued;
2. The amount of protected time off used during the last pay period (differentiating between paid and unpaid);
3. The employee’s total balance of protected time off;
4. The amount of protected time off available for use (differentiating between paid and unpaid);
5. The amount of paid prenatal leave used during the last pay period; and
6. The employee’s total balance of paid prenatal leave.

Reinstatement of Unpaid Leave Upon Rehire

Another notable addition to the final rules provides that when an employee separates from employment and is rehired by the same employer within the same calendar year, the employer must reinstate the employee’s unused portion of the 32 immediately available hours of unpaid protected time off.

This new obligation operates alongside the existing ESSTA reinstatement requirement for accrued paid protected time off. Under ESSTA, when an employee is rehired within six months of separation by the same employer, previously accrued safe/sick time that was not used must be reinstated, and the employee is entitled to use such accrued time at any point after being rehired. However, an employer is not required to reinstate accrued safe/sick time to the extent the employee was paid for unused accrued time prior to separation and the employee agreed to accept such payment. Taken together, employers must now track and potentially reinstate both the unused portion of the 32-hour unpaid bank (if rehired within the same calendar year) and any previously accrued paid protected time off (if rehired within six months), subject to the payout exception.

Updated Recordkeeping and Policy Requirements

The final rules update employer recordkeeping obligations to require differentiation between paid and unpaid protected time off on pay statements and in employer records. Employers’ written protected time off policies must now also specify the amount of unpaid protected time off (a minimum of 32 hours) provided pursuant to ESSTA and confirm that the time off is immediately available for use on the employee’s first day of employment and the first day of each new calendar year.

Penalties and Enforcement

The final rules clarify the civil penalties and employee relief available when DCWP finds that an employer maintains a policy or practice of not providing or refusing to allow the use of protected time off or paid prenatal leave.

Protected Time Off Violations

Relief granted to each affected employee must include (1) application of the hours the employee should have accrued, (2) application of 32 hours of unpaid protected time to the employee’s balance and (3) monetary relief of $500 per employee per calendar year the unlawful policy or practice was in effect.

Paid Prenatal Leave Violations

Each affected employee is entitled to (1) 20 hours of paid prenatal leave applied to their balance and (2) $500 per employee per calendar year the policy or practice was in effect.

What This Means for Employers

The final rules take effect on July 23, 2026. In light of these changes, employers should:

• Review and update existing safe and sick leave policies and employee handbooks to reflect the expanded leave entitlements;
• Evaluate payroll systems to ensure they can track paid and unpaid protected time off banks separately and generate the required information on pay statements;
• Assess and modify offboarding procedures to comply with the new post-employment disclosure obligation;
• Confirm that rehire procedures account for reinstatement of unused unpaid protected time off;
• Consider the implications of the unpaid leave bank for exempt employees and determine whether payment is necessary to preserve salary basis exemptions; and
• Train human resources, managers and payroll personnel on proper administration of the final rules.

We will continue to monitor developments and provide further updates as warranted.

For More Information

If you have any questions about this Alert, please contact Eve I. Klein, Katelynn Gray, Poline Pourmorady, Jessica Goldstein, any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.