NYC Finalizes Protected Time Off Law Rules

The New York City Department of Consumer and Worker Protection (DCWP) adopted final rules implementing the Protected Time Off Law (PTOL), formerly known as the Earned Safe and Sick Time Act (ESSTA).

The final rules operationalize Local Law 145 of 2025, which expanded covered reasons for protected leave, created a new 32-hour unpaid leave entitlement, codified paid prenatal leave requirements, and established specific penalties for prenatal leave violations.

This update applies to employers with one or more employees working in New York City that are subject to the PTOL. The final rules took effect on July 23, 2026.

Legal Requirements

• Provide employees with protected time off in accordance with the PTOL, including the new 32-hour unpaid protected time off entitlement, required paid prenatal leave, and all applicable leave-use rights.
• Permit employees to use protected time off for all covered purposes, including the newly expanded reasons related to caregiving, housing and public benefits proceedings, public disasters or emergency conditions, and workplace violence.
• Maintain and communicate leave balances as required, including distinguishing between paid protected time off, unpaid protected time off, and paid prenatal leave, and providing post-employment balance access or notices.
• Follow applicable leave-administration requirements, including using paid leave before unpaid leave unless the employee requests otherwise and restoring unused unpaid protected time off when a separated employee is rehired during the same calendar year.

Practical Considerations

• Update payroll, Human Resources Information System (HRIS), and offboarding processes to separately track leave categories, maintain required balance information, and support post-employment access or notice obligations.
• Review exempt employee leave practices and consider paying otherwise unpaid protected time off when necessary to preserve exempt status under the federal Fair Labor Standards Act (FLSA) or applicable state wage-and-hour laws.
• Update written leave policies to address the new unpaid entitlement, expanded covered reasons for leave, paid prenatal leave requirements, and related administrative obligations.
• Employers currently offering more generous paid leave policies may satisfy the requirement without creating a separate unpaid leave bank, provided the paid leave is available under the same terms as the required protected time off.

Overview

New 32-Hour Unpaid Protected Time Off Requirement

• Employees must have access to 32 hours of unpaid protected time off immediately upon hire and again at the beginning of each calendar year. This leave may be used for the same covered reasons as paid protected time off.
• The entitlement is not prorated based on part-time status or mid-year hire dates. The full 32 hours must be made available.
• Employers may satisfy some or all of this requirement by providing equivalent paid time off.
• Unused portions of the 32-hour unpaid entitlement do not need to carry over into the next calendar year.

Administrative Requirements

• Paid Leave Priority Rule: When an employee has both paid and unpaid protected time off available, employers must apply leave to the paid bank first unless the employee specifically requests to use unpaid time.
• Rehire Restoration: If an employee is separated and rehired during the same calendar year, employers must restore any unused portion of the employee’s unpaid protected time off.
• Post-Employment Balance Access: Employers must either maintain electronic access to leave balances for six months after separation or provide a written statement showing accrued, used, and available balances shortly after the employee’s final payday.
• Pay Statement Requirements: Pay statements or written notices must distinguish between paid protected time off, unpaid protected time off, and paid prenatal leave balances and usage.

Expanded Reasons for Leave: Employees may use protected time off for:

• Caring for a child or care recipient.
• Matters related to housing or public benefits proceedings.
• Public disasters or emergency conditions.
• Workplace violence situations affecting the employee or certain family members.

Documentation Rules

• For absences exceeding three consecutive workdays, employers may request reasonable documentation.
• Documentation supporting the new protected reasons for leave must be accepted if it shows the leave was used for a covered purpose.

Paid Prenatal Leave

• Local Law 145 codified the paid prenatal leave requirement set forth in Section 196-b of the New York Labor Law.
• If an employer fails to provide required paid prenatal leave, affected employees may receive 20 hours of paid prenatal leave added to their balance, as well as $500 per employee for each calendar year the violation existed.

Exempt Employee Considerations: Employers should consider paying for otherwise unpaid protected time off when necessary to maintain exempt status under the FLSA or applicable state wage-and-hour laws, because unpaid deductions could jeopardize exempt status for salaried employees.

Why This Matters

The final rules significantly expand employer leave-administration obligations. In addition to the new unpaid leave entitlement and expanded covered uses, employers must implement new tracking, notice, pay statement, and recordkeeping processes. Many employers may need payroll, HRIS, policy, and offboarding updates to ensure compliance with the PTOL framework.

Key Risks for Employers

• Employers who fail to provide required paid prenatal leave may be required to restore paid prenatal leave to affected employees and may face civil penalties.
• DCWP has broad enforcement authority under the PTOL framework, including investigations, administrative complaints, and civil penalties.
• Improper unpaid deductions from exempt employees for protected time off could jeopardize FLSA exempt status, creating overtime and back-wage exposure separate from PTOL enforcement obligations.
• Failure to properly track, maintain, communicate, and distinguish leave balances may create additional compliance and enforcement risks.

Source References

• New York City – Adopted Protected Time Off Under the Earned Safe and Sick Time Act Rules (July 23, 2026)

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