Paid Sick Leave

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We previously blogged about the requirements of Maryland’s new paid sick leave law, the Maryland Healthy Working Families Act. That law took effect on February 11, 2018, despite efforts by a number of lawmakers to delay it. As required by the law and in response to thousands of questions received, the Maryland Department of Labor recently issued a frequently asked questions document, three sample policies, and an employee notice poster available in English and Spanish.  The guidance provides information on topics such as how to count your employees to determine whether you meet the 15-employee threshold for mandatory paid leave (employers with fewer than 15 employees are required to provide only unpaid leave); how the law applies when you have part-time employees, or a collective bargaining agreement; and whether you can use a different method of leave accrual for different types of employees (the answer is yes).

The Department’s guidance should prove useful to employers in complying with Maryland’s new law. If you already have a sick leave policy in place, it should be carefully reviewed to ensure it meets all of the statutory requirements, and if it does not, you should amend it or add a new policy, accordingly. In addition, if you have other leave policies such as vacation leave, PTO, parental leave, or FMLA leave, your sick leave policy will need to be coordinated with your existing policies.  Employers should also bear in mind that the Department issued its guidance with the caveat that it is only preliminary; so continue to stay tuned for further developments, including potential regulations that may be promulgated by the Department.

Absent further action by the Maryland General Assembly, a new sick leave law known as the Maryland Healthy Working Families Act (the “Law”) will take effect in Maryland by February 11, 2018. Although the Law was vetoed by Governor Larry Hogan, the General Assembly overrode his veto on January 12, 2018. The new Law adds to mandatory sick leave laws enacted by a number of other states and localities and to the federal sick leave rule for federal contractors. The Law is summarized below.

Which employers are covered? All Maryland employers are covered. Employers with 15 or more employees must provide paid sick leave under the Law. Employers with 14 or fewer employees must provide unpaid sick leave under the Law. References to sick leave below mean paid leave for employers above the 15-employee threshold and unpaid leave for those below the threshold.

Which employees are covered? The Law does not apply to (1) employees who “regularly” work fewer than 12 hours per week; (2) independent contractors; (3) certain real estate brokers and real estate salespersons; (4) individuals under age 18 before the beginning of the year; (5) workers in certain agricultural sectors; (6) construction workers covered in a collective bargaining agreement; (7) specified employees who work on an as-needed basis in a health or human services industry; (8) an employee who “is employed by a temporary services agency to provide temporary staffing services to another person if the temporary services agency does not have day-to-day control over the work assignments or supervision of the individual while the individual is providing the temporary staffing services”; or (9) an employee who “is directly employed by an employment agency to provide part-time or temporary services to another person.”

How much sick leave must be provided? Employees earn one hour of sick leave for every 30 hours worked. Earned sick leave begins to accrue on January 1, 2018 or the date on which the employee begins employment with the employer, whichever is later. Although an employer typically must allow an employee to accrue sick leave for all hours worked, an employer need not accrue sick leave for employees during (1) a two-week pay period in which the employee worked fewer than 24 hours total; (2) a one-week pay period if the employee worked fewer than a total of 24 hours in the current and immediately preceding pay period; or (3) a pay period in which the employee is paid twice a month and the employee worked fewer than 26 hours in the pay period.

For what purposes may sick leave be used? Employees must be permitted to use sick leave:

  • To care for or treat the employee’s mental or physical illness, injury, or condition;
  • To obtain preventive medical care for the employee or employee’s family member;
  • To care for a family member with a mental or physical illness, injury, or condition;
  • For maternity or paternity leave; and
  • For specified circumstances due to domestic violence, sexual assault, or stalking committed against the employee or the employee’s family member.

An employer can require that an employee provide verification of the need for leave if an employee uses the leave for more than two consecutive shifts.

How much notice must an employee provide? If the need for leave is foreseeable, the employer may require an employee to provide reasonable advance notice of not more than 7 days before the leave would begin; if not foreseeable, the employee must provide notice as soon as practicable.

May employers cap sick leave use or accrual? Employers may restrict employee sick leave use and accrual as follows:

  • Employers may restrict employees from accruing more than 64 hours of sick leave at any time
  • Employers may restrict employees from using more than 64 hours of sick leave in a year
  • Employers may restrict employees from carrying over more than 40 hours of accrued, unused sick leave from one year into another
  • Employers may prohibit employees from using sick leave during the first 106 calendar days worked.

What happens to sick leave at the end of employment? Employees need not be compensated for sick leave at the conclusion of employment, but employees who are re-hired within 37 weeks after leaving employment must have their unused accrued leave reinstated.

What if an employer already has a paid time off or paid sick leave policy? Employers can use an existing paid leave policy (including a paid time off policy) to satisfy the Maryland requirements so long as the terms are equal or more generous than the Law requires.

What notices must an employer provide to its employees? Employers must provide a specified notice to employees, informing them of their right to leave under the Law. The Maryland Commissioner of Labor & Industry (the “Commissioner”) is required to create and make available a free poster and model notice. Employers must also provide employees with regular notice about the amount of sick leave they have available, which must be provided either in writing each time an employee is paid (such as on a pay stub), or through an online system.

Will any regulations or guidance by published by Maryland? The Commissioner must publish a model policy that an employer may use to satisfy the Law’s requirements. The Commissioner must also provide technical assistance to an employer upon request. Finally, the Law authorizes the Commissioner to promulgate regulations that will provide further details on the terms of the Law.

What are the consequences for failure to comply? Penalties include: (1) payment for the value of leave not paid or provided in violation of the Law; (2) an additional amount of up to three times the unpaid leave; (3) actual economic damages; (4) a civil penalty of up to $1,000 for each employee for whom the employer is not in compliance; and (5) in certain circumstance, punitive damages. Civil penalties may be waived if a violation is caused by an error of a third-party payroll service provider.

How does the Law impact sick leave laws passed by Maryland localities? The Law preempts local jurisdictions from enacting new paid sick leave laws after January 1, 2017; however, it does not preempt localities from amending paid sick leave laws that were enacted before January 1, 2017. Therefore, Montgomery County, Maryland’s paid sick leave law (which provides more generous benefits than the Law in some respects) will remain effective, however, Prince George’s County’s law will not.

What’s next and what should employers do? Employers should act now to get into compliance with the Law, including establishing or updating paid sick leave or paid time off policies to provide the amounts and types of leave required by the Law. At the same time, employers should keep a close eye on the Maryland legislative process. There is a possibility that the Maryland General Assembly may delay the effective date of the bill until April rather than February, and that additional amendments may be passed.  Employers should also watch for new regulations and guidance to be promulgated by the Commissioner.