November 20, 2025
Year-End Reminder for New York and New Jersey Employers: What Happens to Unused Leave?
As we approach the end of 2025, New York and New Jersey employers should review their leave policies to ensure compliance with state and local requirements for carryover, forfeiture, and payout. Below is a summary of what employers need to know before December 31.
New York State Paid Sick Leave
Under New York State’s Paid Sick Leave Law, employees must be allowed to carry over their unused sick leave from one calendar year to the next. However, employers may limit employees’ use of sick leave to forty (40) or fifty-six (56) hours per year, depending on the employer’s size, even if hours were carried over from a previous year.
New York City Paid Safe and Sick Leave
Under New York City’s Earned Safe and Sick Leave Law, employers who will frontload paid sick leave the following year may choose to pay out or allow carryover of unused leave at the end of the current year. All other employers must allow carryover of unused leave. Employers may limit employees’ use of sick leave to forty (40) or fifty-six (56) hours per year, depending on the employer’s size, even if hours were carried over from a previous year.
New York State and City Paid Prenatal Leave
Under both State and City law, employers are required to provide twenty (20) hours of paid leave for pregnancy-related medical appointments. Unused paid prenatal leave time does not carry over into the next calendar year.
New Jersey Earned Sick Leave
New Jersey’s Earned Sick Leave Law requires employers to provide up to forty (40) hours of paid sick leave per benefit year. Employers may choose to pay out unused sick leave at the end of the year or allow employees to carry over up to 40 hours of unused sick leave into the next benefit year. Employers may limit use of sick leave to 40 hours per year, even if hours were carried over from a previous year.
Other Paid Time Off
Most private employers in New York and New Jersey are not legally required to provide paid time off (“PTO”) for vacation, holidays, or personal time. As such, employers who provide PTO may maintain a “use-it-or-lose-it” policy so long as that policy is clearly stated in writing and consistently applied. Employers who include sick leave in their PTO allotment must pay attention to applicable state and local sick leave laws regarding payment and/or carry over.
Key Takeaways for Employers
As you prepare for year-end, take the following steps to ensure compliance:
- Review and update your policies. Confirm that your sick leave, PTO, and vacation policies align with current state and local requirements.
- Audit employee balances. Ensure your systems correctly track accrual, use, and carryover.
- Communicate clearly with employees. Send reminders explaining how unused leave will be treated going into the new year.
- Document your practices. If offering payout options, maintain records of employee elections and communications.
- Coordinate across jurisdictions. Employers with workforces in both New York and New Jersey should ensure compliance with the applicable laws in each state.
- Consult counsel as needed. Leave laws are highly technical and frequently updated. Reviewing policies with employment counsel each year can help prevent costly mistakes.
If you have questions about federal, state or local leave laws or other wage and hour laws, please contact Chaim Book at cbook@booklawllp.com, Sheryl Galler at sgaller@booklawllp.com, Rebecca Nathanson at rnathanson@booklawllp.com, or Charlotte Pramer at cpramer@booklawllp.com.
