The New York City Council has expanded employee protections under the Earned Safe and Sick Time Act (ESSTA) and aligned several city requirements with New York State law. These amendments take effect on February 22, 2026.
Expansion of ESSTA Leave Requirements
Under the existing ESSTA framework, employers are required to provide either 40 or 56 hours of paid sick leave, depending on business size. The amended law introduces several additional obligations.
- 32 Hours of Unpaid Sick Leave New York City employers must now provide an additional category of leave: 32 hours of unpaid sick leave. This leave must be frontloaded at the start of employment and at the beginning of each calendar year. Unlike paid ESSTA leave, unused unpaid hours do not carry over to the following year.
- Expanded Qualifying Reasons for Leave Employees may now use paid or unpaid ESSTA leave for additional purposes, including:
- Caring for a minor child or other care recipient
- Addressing issues related to subsistence benefits or housing, including legal proceedings
- Responding to a public disaster
- Responding to workplace violence
These changes require updates to employee handbooks and written policies prior to February 22, 2026.
Wage and Hour Updates for 2026
Several wage-related changes take effect on January 1, 2026. Employers should review payroll practices and compliance materials in advance.
Minimum Wage Increases
- Downstate (New York City, Long Island, and Westchester County): $17.00 per hour (up from $16.50)
- Remainder of New York State: $16.00 per hour (up from $15.50)
Employers must issue updated Notice of Pay Rate forms and revise tip credit policies where applicable. Failure to provide required notices may result in penalties.
Increase to Exempt Salary Thresholds
Overtime misclassification remains a frequent source of wage-and-hour claims. To qualify for overtime exemptions, employees must meet both the salary threshold and applicable duties tests.
As of January 1, 2026, the minimum salary thresholds increase as follows:
- New York City, Long Island, and Westchester County: $1,237.50 per week ($64,350 annually)
- Remainder of New York State: $1,161.65 per week ($60,405.80 annually)
Meeting the salary requirement alone is not sufficient to establish exempt status. Employers should review job descriptions and employee classifications to reduce the risk of overtime disputes.
Paid Family Leave Rate Increases
Effective January 1, 2026, New York Paid Family Leave (PFL) benefits and employee contribution rates will increase. The maximum weekly benefit rises to $1,228.53, and employee contributions increase to 0.432% of gross wages per pay period, capped annually at $411.91.
If an employee begins PFL in 2025 and the leave continues into 2026, the 2025 benefit rate will apply. New intermittent claims beginning in 2026 after a three-month lapse will be calculated using the 2026 rate.
Increase to Jury Duty Pay
As of June 8, 2025, New York employers with 11 or more employees must pay at least $72 per day (or the employee’s regular daily wages, if lower) for the first three days of jury service. This reflects an increase from the prior $40 daily requirement.
Employers that already provide full pay during jury service are not affected. Others should update handbook policies to ensure compliance.
Restrictions on Use of Credit History in Hiring
New York State has enacted legislation limiting the use of credit history in employment decisions. Signed by Governor Kathy Hochul on December 19, 2025, the law takes effect on April 18, 2026 and largely aligns statewide standards with existing New York City rules.
The law generally prohibits employers from requesting or using credit reports, credit scores, or personal financial information—such as debts, bankruptcies, or liens—when making decisions about hiring, compensation, or other terms of employment.
Exceptions apply for certain positions, including law enforcement roles, jobs requiring security clearance, positions involving substantial public trust, access to sensitive information, or authority over significant financial assets. Consumer reporting agencies are also restricted from providing credit-related employment reports unless an exemption applies.
Employers that currently conduct credit checks for New York-based roles should review hiring and background screening practices before the April 18, 2026 effective date.
Off-Duty Political and Religious Activities
New York’s Legal Activities Law protects employees who engage in certain political or religious activities outside of work.
Under New York Labor Law Section 201-D, employers generally may not discipline or terminate employees for lawful off-duty political or religious activities. These protections do not extend to conduct that incites violence or constitutes unlawful hate speech.
Given the rise in social media-related disputes, employers should carefully evaluate whether off-duty conduct is legally protected before taking action.
Proposed NYC Pay Data Reporting Requirements
The New York City Council has passed legislation that, if signed into law, would require certain large private-sector employers to submit annual pay data reports.
The bills would apply to employers with at least 200 employees and require reporting of job titles, compensation data, and demographic information such as gender and race or ethnicity. Civil penalties for inaccurate or incomplete reporting could range from $1,000 to $5,000 per violation.
Employers potentially covered by the legislation may wish to review compensation practices and internal data collection processes in advance.
California Law Developments
Workplace Know Your Rights Act
Effective February 1, 2026, California employers must comply with new notice requirements under the Workplace Know Your Rights Act (SB 294). Employers must provide a stand-alone notice directly to employees, rather than relying solely on workplace postings.
The notice must be delivered to all current employees by February 1, 2026, and to new hires at the start of employment. Employers must use a method reasonably calculated to ensure receipt within one business day. Penalties may reach up to $500 per employee for noncompliance.
Employers may use their own notice format, provided it includes all information contained in the state’s model notice.
Model notices issued by the California Department of Industrial Relations are available here:
English Version (PDF) Spanish Version (PDF)
Emergency Contact Requirement for Arrests
Beginning March 30, 2026, California employees must designate an emergency contact for arrests or detentions. If an employee is arrested at the workplace—or offsite during work hours when the employer has actual knowledge—the employer must notify the designated contact.
2026 California Poster Updates
In addition to the new notice requirement, California employers must update required workplace posters for 2026. Changes include a statewide minimum wage increase to $16.90 per hour, with higher rates in certain local jurisdictions and industries.
Federal Law Developments
Gender Identity in the Workplace
Federal enforcement priorities regarding gender identity discrimination have shifted under the current administration. A January 2025 executive order directs federal agencies to recognize only two biological sexes and instructs agencies to prioritize enforcement consistent with that directive.
This approach may conflict with existing EEOC guidance and the Supreme Court’s decision in Bostock v. Clayton County (2020), which held that Title VII prohibits discrimination based on sexual orientation and gender identity. How courts and agencies will reconcile these positions remains uncertain.
Employers should proceed cautiously when addressing harassment, speech, restroom access, and accommodation issues.
Religious Accommodations
Religious accommodation obligations continue to evolve following the Supreme Court’s decision in Groff v. DeJoy (2023). Under Groff, employers must provide religious accommodations unless doing so would impose substantial increased costs or otherwise create an undue hardship.
Employers should expect closer scrutiny of how accommodation requests are evaluated and documented, including those involving scheduling, dress and grooming, religious expression, or prayer in the workplace.
DEI Programs
Recent federal executive orders have eliminated diversity, equity, and inclusion initiatives within the federal government and imposed certification requirements on federal contractors. While these measures apply directly to government entities and contractors, they may indirectly affect private employers.
Private employers maintaining DEI-related initiatives should review programs and policies to ensure compliance with applicable federal, state, and local laws.
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