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How to Set Up a New York Sick Leave Accrual Policy in Friday

How to Set Up a New York Sick Leave Accrual Policy in Friday #

PTO accrual policies are only available on the Friday Premium plan.

This article explains how to configure an accrual-based sick leave policy for employees working in New York State. New York City employers must also review and configure the additional NYC leave requirements included below.

Important: Friday helps employers configure and track leave policies, but the employer is responsible for ensuring its written policy and Friday settings comply with all applicable laws. This article provides general guidance and is not legal advice.

Determine How Much Sick Leave You Must Provide #

The required amount depends on the employer’s total number of employees and, for employers with four or fewer employees, the employer’s net income.

Employers With 100 or More Employees #

Employees must be allowed to accrue and use up to 56 hours of paid sick leave per calendar year.

Employers With 5–99 Employees #

Employees must be allowed to accrue and use up to 40 hours of paid sick leave per calendar year.

Employers With 0–4 Employees #

If the employer’s net income was more than $1 million in the previous tax year: 40 hours of paid sick leave.
If the employer’s net income was $1 million or less in the previous tax year: 40 hours of unpaid sick leave.

Accrual Rate:
New York employees must accrue sick leave at a rate of at least one hour for every 30 hours worked. Employers may alternatively provide the full required amount at the beginning of the applicable calendar year.

Create the New York Sick Leave Policy #

Step 1: Open the Policies Page #

From the side menu, click Time Off.
Go to the Policies tab.
Scroll down to the available policy templates.
Click any of the pre-named policies.
Click Create Policy.

Note: Template names are placeholders. You can rename the policy and use it for any type of time off.

Step 2: Name the Policy #

Enter a clear policy name, such as New York Sick Leave.
Add a description explaining that the policy is used for New York-required sick and safe leave.

Step 3: Create a Limited Policy #

When asked, “Is there a limit to how many hours an employee can take off?” select Yes.
New York sick leave is not unlimited. Employees earn leave based on qualifying hours worked, subject to annual requirements.

Step 4: Select Hourly Accrual #

When asked how PTO hours should be accumulated, select Hourly.
Do not select a fixed amount for standard accrual-based New York sick leave.
Use Fixed only if front-loading the required amount (not covered in this article).

Step 5: Select the Hours That Count Toward Accrual #

Hourly accrual in Friday is calculated from hours recorded on employees’ timesheets.
Select hour types that represent qualifying time worked, such as:

– Work hours
– Overtime hours

Do not include:

– Unpaid lunch periods
– Previously used PTO
– Other nonworking hours

Include additional hour types only if the employer’s written policy provides a more generous benefit.

For NYC Employers:
Account for all time worked, including increments of fewer than 30 hours. NYC permits certain rounding methods as long as employees receive at least the required accrual over time.

Step 6: Enter the Accrual Rate #

Configure as 1 hour earned for every 30 hours worked.

Examples:

30 hours worked = 1 sick leave hour
60 hours worked = 2 sick leave hours
300 hours worked = 10 sick leave hours

Do not use a rate of one hour for every 40 hours worked.

Step 7: Do Not Add a Waiting Period #

When asked, “Do new employees go through a waiting period before their accrued time off becomes available?” select No.
Covered employees should begin accruing sick leave when employment begins.

NYC Employers:
May not use probation periods, waiting periods, blackout days, or similar restrictions.

Step 8: Configure Carryover #

When asked what should happen to unused hours at the end of the policy year, select Some Hours Carry Over.
Enter the applicable carryover limit:

– 40 hours for employers subject to the 40-hour requirement
– 56 hours for employers subject to the 56-hour requirement

Note:
Employees must generally be allowed to carry over up to 40 or 56 hours of unused accrued leave into the following calendar year. The employer may still limit the amount of accrued leave an employee can use during a calendar year to 40 or 56 hours, as applicable.

Do Not Select No Hours Carry Over #

Do not select No Hours Carry Over for a standard accrual-based New York sick leave policy.
An employer may avoid carryover under certain front-loaded arrangements if:

– Employees are paid for unused leave at year-end, and
– The full 40 or 56 hours are front-loaded for the following year.

Employers using this arrangement should confirm compliance with all requirements.

Step 9: Carefully Review the Maximum Balance #

Friday’s Maximum Balance setting controls the highest balance an employee can hold at one time.
Once an employee reaches the maximum balance:

– Accrual stops.
– Accrual resumes after leave is used and the balance falls below the maximum.

Important:
Do not automatically set the maximum balance to 40 or 56 hours without reviewing the employer’s carryover policy.

New York distinguishes between:

Annual accrual

Annual usage

Carryover

Total accumulated balance

Example:
An employee may carry 20 hours into a new year and then accrue another 40 hours, resulting in a 60-hour balance, even if only 40 hours can be used that year.

NYC Guidance:
Employees’ accumulated balances may exceed the annual 40- or 56-hour usage limit.

Recommendation:
Confirm the appropriate maximum balance with your HR or legal adviser.

Step 10: Configure Termination Payout #

When asked, “Are outstanding PTO hours automatically cashed out when an employee is terminated?” generally select No for New York sick leave.

Exceptions:
Payment may be required if:

The employer’s written policy promises payment
Sick leave is combined with vacation or general PTO
An employment agreement or contract requires payment

Review the employer’s written policy before completing this setting.

Step 11: Do Not Add Seniority Levels #

Do not use policy levels to delay or reduce legally required sick leave based on years of service.
Employers may create more generous levels for longer service, as long as every covered employee receives at least the legally required benefit.

Step 12: Assign the Policy to Covered Employees #

Select all employees who are covered by the New York policy:

– Individual employees
– A group of employees
– Everyone

Do not exclude employees based on:

Part-time status

Salaried or hourly status

Overtime-exempt status

Temporary status

New York State’s sick leave law generally covers private-sector employees regardless of industry, occupation, part-time status, or overtime-exempt status.

Step 13: Choose How the Policy Should Start #

After assigning employees, Friday will ask how the policy should begin calculating balances.

Start From Today #

Select Start From Today when:

– The policy should begin on the current date
– Employees have no previous balance
– No retroactive accrual is required

Start Retroactively #

Select Start Retroactively when Friday should calculate previous accrual based on information already recorded in the system.
Friday may review:

– Employee hire dates
– Timesheet hours
– Policy settings
– Applicable policy levels

Review every calculated balance before completing the policy.

Enter Balances Manually #

Select Manually when moving balances from another payroll, timekeeping, or PTO system.
Enter the correct starting balance for each employee.

This is generally the safest option when employees already accrued or used sick leave before the policy was created in Friday.

Select a Specific Start Date #

Use this option when the policy should begin calculating from a particular past or future date.
Confirm that employees receive all leave they are legally entitled to before selecting a future effective date.

Step 14: Complete the Policy #

Review all settings and click Create or Continue.
The policy will appear on the Policies tab. You can select the policy to view:

– Policy settings
– Assigned employees
– Employee balances
– Employee statuses

To make changes later, click the three-dot menu and select Edit.

Recommended New York Settings #

Additional Requirements for New York City Employers #

As of February 22, 2026, New York City employers must provide an additional bank of immediately available protected time off.

Create a Separate 32-Hour NYC Policy #

NYC employers must provide employees with 32 hours of unpaid protected time off that is immediately available:

When employment begins
On the first day of each calendar year

Key Points:

The 32-hour bank is separate from the employee’s accrued 40 or 56 hours.
The hours may not be prorated for employees who begin working partway through the year.
Unused hours from this 32-hour bank do not have to carry into the following year.

Create a separate Friday policy called:
NYC Unpaid Protected Time Off

Recommended settings:

Limited policy: Yes

Accumulation method: Fixed

Amount: 32 hours

Frequency: Calendar year

Waiting period: No

Carryover: No hours carry over

Maximum balance: 32 hours

Termination payout: No

Assigned employees: All covered NYC employees

Review every new hire’s policy assignment to ensure all 32 hours are immediately available.

Employers Providing Additional Paid Leave #

NYC employers may satisfy the additional 32-hour requirement by providing at least 32 additional hours of paid protected time instead of unpaid time.
The additional 32 hours must still be immediately available:

– On the employee’s first day of employment
– On the first day of each calendar year

The employer cannot require employees to accrue these additional hours.

Create a Separate New York Paid Prenatal Leave Policy #

New York private-sector employers must also provide employees with 20 hours of paid prenatal leave.

Key Points:

Separate from regular sick leave

Available without accrual or minimum employment period

Available to employees regardless of employer size

Limited to the employee directly receiving prenatal health care

Measured over an individual 52-week period (beginning when the employee first uses paid prenatal leave)

Create a separate Friday policy called:
New York Paid Prenatal Leave

Suggested initial settings:

Limited policy: Yes

Accumulation method: Fixed

Amount: 20 hours

Waiting period: No

Carryover: No

Termination payout: No

Policy levels: None

Assigned employees: All covered employees

Note: Because the 52-week period begins when each employee first uses prenatal leave, a standard calendar-year policy may not fully automate this requirement. Employers may need to monitor the applicable 52-week period and manually adjust or renew the balance for each employee.

Frequently Asked Questions #

Is PTO accrual available on every Friday plan? #

No. PTO accrual policies are only available on the Friday Premium plan.
Employers on another plan must upgrade to Premium before creating an hourly sick leave accrual policy.

What accrual rate should I use for New York sick leave? #

1 hour of sick leave for every 30 hours worked (minimum required by New York State law).

Should I select Fixed or Hourly? #

Select Hourly for accrual-based New York sick leave.
Select Fixed if the employer intends to front-load the required hours.

Can I front-load the full amount instead of calculating accrual? #

Yes. New York allows employers to provide the full required amount at the beginning of the year instead of calculating one hour for every 30 hours worked.
Review carryover, year-end payout, and new-hire rules before using a front-loaded policy.

Does Friday calculate accrual from payroll hours? #

No. Friday calculates hourly PTO accrual using hours recorded on employees’ timesheets, not payroll hours.
Employers must ensure qualifying working hours are accurately tracked in Friday.

Which timesheet hours should count? #

Select all hour types that represent qualifying time worked, such as:

– Work hours
– Overtime hours

Do not include unpaid lunch periods or other nonworking time unless the employer’s policy is more generous.

What if an employee does not use Friday’s time tracking? #

If an employee’s working hours are not tracked in Friday, the employer may need to:

– Enter the employee’s working hours into Friday
– Calculate the accrual outside Friday and manually adjust the balance
– Use an appropriate front-loaded policy

Do salaried employees need to be included? #

Generally, yes. New York’s sick leave requirements apply to private-sector employees, including salaried and overtime-exempt employees.
For NYC, overtime-exempt employees are generally assumed to work 40 hours per week unless their regular workweek is fewer than 40 hours.
Employers should determine how those hours will be recorded if salaried employees do not submit timesheets.

Do part-time employees accrue sick leave? #

Yes. Part-time employees accrue sick leave at the same minimum rate (one hour for every 30 hours worked).
They may accrue more slowly due to fewer hours worked but should not be excluded.

Do temporary or per diem employees qualify? #

Many temporary and per diem employees may be covered.
Do not exclude an employee solely due to an irregular schedule or per diem classification.

How many hours must an employer provide? #

NYC employers must also provide the separate 32-hour immediately available bank.

Should new employees have a waiting period? #

For the recommended setup, select No.
Employees should begin accruing leave when employment begins.
NYC employers cannot use a waiting period, probation period, or blackout period.

What happens when an employee reaches the maximum balance? #

The employee stops accruing additional hours.
Accrual resumes when leave is used and the balance falls below the maximum.
Employers should review their carryover and annual usage rules before setting a maximum balance.

Should the maximum balance be 40 or 56 hours? #

Not necessarily. The 40- or 56-hour figure may represent the annual usage limit, not the highest possible balance.
Employees may carry hours from a previous year and accrue additional hours, resulting in a higher balance.
Setting the maximum balance too low could stop accrual too early.

What is the difference between carryover and maximum balance? #

Carryover: Controls how many unused hours move into the next policy year.
Maximum balance: Controls the highest total balance an employee may hold at one time.
These are separate settings and should not automatically be set to the same amount.

Can employees carry unused sick leave into the following year? #

Generally, yes. Employees must be permitted to carry over up to 40 or 56 hours of unused accrued leave, depending on employer size.
The employer may still limit annual use to 40 or 56 hours.

Can I select No Hours Carry Over? #

Generally, do not select No Hours Carry Over for a normal accrual-based policy.
Different rules may apply when the employer front-loads the full required amount and pays employees for unused leave at year-end.

Does unused sick leave need to be paid at termination? #

New York generally does not require unused statutory sick leave to be paid when employment ends.
Payment may be required if:

– The employer’s written policy promises payment
– Sick leave is combined with vacation or general PTO
– A contract or employment agreement requires payment

Should I create seniority-based policy levels? #

Do not use policy levels to provide newer employees with less than the legally required sick leave.
Employers may add more generous levels for long-term employees as long as all employees receive at least the required minimum.

What start option should I use when moving from another system? #

Select Manually and enter each employee’s current balance.
Before entering balances, verify:

– Previously accrued hours
– Previously used hours
– Carried-over hours
– Manual adjustments
– The employee’s correct hire date

When should I use Start Retroactively? #

Use Start Retroactively only when Friday contains complete and accurate information for the prior period.
Review the employee’s:

– Hire date
– Timesheets
– Qualifying hour types
– Prior adjustments
– Current balance

Always review the balance calculated by Friday before completing the policy.

Can I use one general PTO policy instead of a separate sick leave policy? #

An employer may