As we move into 2026, employers with staff in New York City should be mindful of two significant regulatory changes that may affect their workforce practices. These updates introduce new compliance obligations and reinforce existing protections for employees working within the city.
1) New York City Amends the Earned Safe and Sick Time Act (ESSTA)
New York City recently amended the ESSTA to better align its requirements with the Temporary Schedule Change Act (TSCA). These amendments take effect on Feb. 22, 2026, and there are two key changes of which employers should be aware.
First, New York City employers will be required to provide employees with 32 hours of unpaid safe and sick leave. These hours are independent of the paid leave otherwise accrued under the ESSTA and the 20 hours of Paid Prenatal Leave to which employees are also entitled. Employers must front-load the 32 hours of unpaid safe and sick leave to employees, which are available for use immediately upon hire and subsequently on the first day of each calendar year. Employers, however, may still set a minimum usage increment of up to four hours per day for unpaid leave. Employers must separately track and report each category and amount of paid and unpaid leave balances under the ESSTA on a pay statement or other form of written documentation provided to the employee each pay period.
The ESSTA amendment to provide unpaid safe and sick leave replaces the two days of unpaid leave that were required under the TSCA. However, employees are still able to request temporary changes to their work schedule, subject to approval by their employer. Employers are not required to approve these requests and can approve, deny or propose an alternative. An employer must respond to an employee’s request as soon as practicable. Employers should also note that employees who make a request to temporarily change their work schedule are still entitled to anti-retaliation protection.
Expanded Reasons for Safe and Sick Time
Second, the ESSTA will expand the reasons employees may use safe and sick leave. Employees may now use safe and sick leave to:
- Provide caregiving for a minor child or other care recipient.
- Initiate, attend or prepare for legal proceedings or hearings related to housing or subsistence benefits in which the employee, the employee’s family member or the employee’s care recipient is a party.
- Take actions necessary to apply for, maintain or restore subsistence benefits or shelter for the employee or their family member or care recipient.
- Take actions, including legal, social services or safety planning, for an employee or their family member who has been the victim or workplace violence.
- Handle closure of the employee’s workplace or closure or restriction on in-person operations of a school or child care by order of a public official due to a public disaster.
- Obey direction from a public official during a public disaster to remain indoors or avoid travel preventing the employee from reporting to their work location.
2) New York City Imposes Pay Data Requirements on Large Employers
New York City is continuing its trend of demanding increased pay data transparency from employers. New York City Council recently enacted two laws under which private employers with more than 200 employees are required to submit pay data to a yet to be designated agency.
These laws became effective Dec. 4, 2025, after New York City Council voted to override Mayor Eric Adams’s vetoes. Although the reporting requirements do not begin immediately, New York City is required to complete its first step in implementing this program by December 2026. Therefore, employers should be aware of, and prepare for, submission of any required data. Private employers can face fines as high as $5,000 for non-compliance with these new requirements.
Which Employers Are Covered?
The reporting requirements under Int 0984-2924 apply to private employers in new York City with more than 200 employees. This includes “all employees performing work for compensation on a full-time, part-time or temporary basis.” Notably, for employers with seasonal or temporary employees whose amount fluctuates per week, employer size may be determined by counting the highest total number of employees concurrently employed at any point during the reporting year.
What Data Are Employers Required to Report?
As currently written, the law requires that employers “shall include current information corresponding with the categories of information required by the equal employment opportunity commission in the EEO-1 component 2 reporting requirements for reporting years 2017 and 2018.”
Under the EEO-1 component 2 form, employers were required to submit data regarding the number of employees and total hours of work organized by race/ethnicity, sex and job categories. Within each job category, the data was aggregated into 12 pay bands reflecting an employee’s W-2 Box 1 earnings. Here’s a sample EE-1 component 2 form.
Helpfully, New York City, through a yet to be designated agency, will publish a new, standardized form for employers. Int 0982-2024 also recognizes that New York City will likely adopt modifications to the previous data categories, such as accounting for different gender identities. Employers will also be given the option to provide explanatory remarks regarding any of the information contained in the report.
Employers will be allowed to submit their data anonymously. However, all covered employers must submit a signed statement attesting to compliance and the accuracy of their data, and that statement must include identification of the employer.
When are Employers Required to Report Data?
Although the laws became effective Dec. 4, 2025, it is uncertain when employers will first be required to submit their data. Int 0982-2024 gives the mayor of New York City one year to designate an agency that will be charged with the creation and execution of a system to collect the pay data from covered employers. After its designation, the agency has up to one year to develop the standardized form employers will use to submit their data. Employers then have one year from publication of that form to submit their data.
As of the time of this alert, the mayor of New York City has yet to designate an agency to administer this program. However, once the mayor designates an agency, the agency may act quickly to implement its framework and publish a standardized data form, which will start the clock for employers to submit their data.
What Consequences do Employers Face?
A covered employer’s failure to submit its pay data can result in monetary penalties. For a first offense, a covered employer will receive a summons and will have 30 days to cure the violation. If the employer cures the violation, it will receive only a written warning.
If the employer does not cure the violation within 30 days, the employer shall be subject to a civil penalty of $1,000. This penalty increases to $5,000 for any subsequent offense.
New York City will also publish annually on its website a list of covered employers not in compliance with the reporting requirements, but only if an employer fails to cure a violation after notification and if the employer is given at least 30 days to comply.
How Will New York City Use Data?
Under Int 0984-2924, a designated agency, in collaboration with the commission on gender equity and other relevant agencies, will be tasked with conducting a pay equity study. The study will evaluate the data contained in the pay reports submitted by covered employers “in order to evaluate whether there are disparities in compensation among employees based on gender and race or ethnicity, and if so, identifying industries where disparities may be prevalent and any trends in occupational segregation based on gender and race or ethnicity.” After conducting this study, the designated agency will make public recommendations regarding employer action plans for addressing any disparities identified through the study.
What Employers Should Do
- Review and update policies and handbooks to ensure compliance with the new ESSTA unpaid leave and allowable use of safe and sick leave requirements.
- Review payroll and demographic data collection policies to ensure the ability to comply with upcoming reporting requirements. Employers with mostly seasonal and temporary workers should track the number of compensated employees working per week to determine whether it is subject to any reporting requirements.
Should you have questions or need advice regarding this or related matters, please reach out to a member of Harris Beach Murtha’s Labor and Employment Practice Group, including Daniel J. Palermo at (585) 419-8946 and dpalermo@harrisbeachmurtha.com; attorney Scott A. Elliott at (585) 419-8791 and selliott@harrisbeachmurtha.com; or the Harris Beach Murtha attorney with whom you most frequently work.
This alert does not purport to be a substitute for advice of counsel on specific matters.
Harris Beach Murtha’s lawyers and consultants practice from offices throughout Connecticut in Bantam, Hartford, New Haven and Stamford; New York state in Albany, Binghamton, Buffalo, Ithaca, New York City, Niagara Falls, Rochester, Saratoga Springs, Syracuse, Long Island and White Plains, as well as in Boston, Massachusetts, and Newark, New Jersey.
