Most employers are required to post the familiar EEO Is the Law poster.  This is a friendly reminder that the OFCCP (Office of Federal Contract Compliance Programs) also requires federal contractors and subcontractors subject to Executive Order 11246 to post two other posters in addition to the EEO Is the Law poster: the EEO Is The Law Poster Supplement, which, among other things, advises employees and job applicants that Executive Order 11246 now prohibits discrimination based on sexual orientation and gender identity; and the Pay Transparency Nondiscrimination Provision, which generally states that employees and applicants may not be discriminated against for discussing, disclosing, or inquiring about compensation.

All three posters need to be physically posted where they can be readily seen by employees and applicants, and they must be made accessible to individuals with disabilities. If you recruit job applicants online, you must include the posters electronically with each electronic job application, or include a prominent link to the posters with each electronic application, including a brief explanation of what the link connects to, so it is conspicuous to applicants.  For employees who work remotely and have computer access, you can also make all three posters available electronically, for example by posting them on your company intranet.

Remember that in addition to these posting requirements, the OFCCP’s regulations also require that the Pay Transparency Nondiscrimination Provision be incorporated into your employee handbook or manual.  Your handbook or manual must include the precise language prescribed by OFCCP.

During a Congressional hearing on March 6th, Labor Secretary Alexander Acosta unveiled a six-month pilot program intended to encourage employers to self-audit and self-report accidental violations of the Fair Labor Standards Act (“FLSA”). Under the program, called Payroll Audit Independent Determination (PAID), the Wage and Hour Division (WHD) of the U.S. Department of Labor will attempt to facilitate settlement agreements between employers who self-report and affected employees.  Employers who qualify for PAID and agree to pay back wages due will not be subject to liquidated damages or civil penalties and attorneys’ fees (all of which an employee could get if he or she files a lawsuit) under the FLSA.  Affected employees will have the right to choose whether to accept back payment in exchange for a release of claims.

There are several open questions about PAID that employers should keep in mind at this time. First, what effect, if any, will an employer’s participation in PAID have on potential claims under applicable state and local law, even if a settlement is reached?  Second, will employees apprised of potential violations by WHD be inclined to accept a settlement agreement that does not include liquidated damages or interest?  Third, is there anything preventing such employees from using the information gleaned from a self-reporting employer to file a lawsuit?  Fourth, will the information and data employers provide to the WHD be discoverable and deemed an admission in future lawsuits, especially by employees who choose not to participate?  Finally, it is not clear whether and to what extent WHD will examine a self-reporting employer’s records for violations in addition to what is self-reported, and whether employers should open themselves up to that scrutiny.

All of these open issues will likely limit the amount of employers who voluntarily self-report wage and hour violations during the six-month pilot period. After PAID’s six-month pilot period is complete, the Labor Department will evaluate the program’s effectiveness and determine whether to continue with the program in its current form, make necessary changes or end the program entirely.

Hogan Lovells invites you to a panel discussion focused on best practices for addressing workplace sexual harassment allegations.

Most companies have anti-harassment policies, but do employees and managers know what these policies really mean? Are these policies enforced consistently across the organization? What are the employer’s obligations when the allegation involves a high-ranking manager or executive? And what if the allegations are true?

Join our labor & employment and internal investigation attorneys as they answer these and other thorny questions on this important topic. In addition, our panelists will discuss the following:

    • When to, how to, and who should conduct an internal investigation
    • Legal liability and other consequences for both the company and the harasser, including the potential impact on separation, settlement and non-disclosure agreements
    • Public relations considerations and the impact of social media in the current climate of harassment
    • International implications, including complications relating to foreign employees and U.S. employees abroad

The panel will take place on March 22, 2018 from 5:00 – 6:00 p.m. in the Hogan Lovells’ New York office. Registration begins at 4:30 p.m. CLE credit is pending. A reception with light food and refreshments will follow the discussion.

Kindly RSVP here.

We look forward to hosting you.

Agenda
4:30 p.m. – 5:00 p.m. Registration
5:00 p.m. – 6:00 p.m. Panel Discussion
6:00 p.m. – 7:00 p.m. Reception

Contact

Matthew Rimi
matthew.rimi@hoganlovells.com

As we previously reported, the National Labor Relations Board (Board) on December 14, 2017 issued a decision in Hy-Brand Industrial Contractors scrapping a broad and controversial “joint employer” standard in favor of a narrowed test that made it more difficult to link affiliated business as joint employers.   Recently, however, the Board unanimously vacated Hy-Brand because of ethics questions raised by member William Emanuel’s participation in that case.

For now, the Board’s broad Browning-Ferris test for determining joint employment is once again the applicable standard. Employers may recall that under Browning-Ferris, a company could be required to bargain with another employer’s union and/or face liability under the National Labor Relations Act if the company merely reserved the right to exert control over those employees’ terms and conditions of employment, however attenuated or indirect the right may be.

It is not clear how long Browning-Ferris will remain in place.  The original Browning-Ferris decision had been appealed to the U.S. Court of Appeals for the D.C. Circuit, but that court sent the case back to the Board for further consideration in light of Hy-Brand.  On March 1, the Board’s General Counsel asked the Court of Appeals to take Browning-Ferris back under review.  Thus, the future of the Browning-Ferris doctrine remains uncertain.

The Hogan Lovells Employment Team will continue to monitor the situation and provide updates as they develop. For more information or for any other employment matter impacting your business, please contact the authors of this article or the attorney you regularly work with at Hogan Lovells.

On February 26, 2018, in a landmark decision continuing the expansion of Title VII’s protection, the Second Circuit Court of Appeals became the second federal appeals court to hold that Title VII prohibits discrimination on the basis of sexual orientation in the workplace. The decision in Zarda v. Altitude Express, Inc. aligns the Second Circuit with the Seventh Circuit in the ongoing evolution of Title VII and its application to sexual orientation discrimination. Both cases involved en banc decisions by the entire court.

Donald Zarda was a former skydiving instructor who alleged that he was fired due to his sexual orientation. He filed an EEOC charge claiming that his discharge was on account of his sexual orientation and gender in violation of Title VII, and repeated the claim in federal court, claiming that he was discharged because his behavior did not conform to gender stereotypes.  Zarda sometimes disclosed to his female clients that he was gay as he prepared them for tandem skydiving jumps during which he would be strapped in tightly to the client.  Although Zarda thought that approach would ease concerns about any inappropriate behavior, one of his clients and her boyfriend complained to his former employer.  The company fired Zarda shortly thereafter.

After acknowledging that the EEOC has maintained since 2015 that sexual orientation discrimination is protected by Title VII and the Seventh Circuit’s same conclusion, the Second Circuit held that “sexual orientation discrimination is motivated, at least in part, by sex and is thus a subset of sex discrimination,” overturning is own prior decisions. The Court’s decision focused on three main factors.  First, the Court concluded that sexual orientation discrimination is a function of sex, comparable to sexual harassment and other perceived evils previously recognized as violating Title VII.  Second, “sexual orientation discrimination is predicated on assumptions about how persons of a certain sex can or should be.”  The Court held that Title VII has long been interpreted (including by the Supreme Court) as prohibiting employment decisions based on stereotypes.  Sexual orientation discrimination, the Court found, is grounded in the concept of gender stereotypes—“real men should date women”—and the Court therefore ruled such discrimination as a subset of sex discrimination.  Finally, sexual orientation discrimination is a form of associational discrimination that is in violation of Title VII, similar to anti-miscegenation policies.  According to the Court, an employee’s sexual orientation is rooted in his or her association with someone of the same sex, which is itself discrimination based on the employee’s own sex.

It is unclear at this time whether Zarda will be appealed to the Supreme Court.  As courts’ interpretation of Title VII continues to evolve, employers in jurisdictions that recognize a cause of action for sexual orientation discrimination should stay vigilant about ensuring that their employees are not subjected to such discrimination in the workplace.  This is especially true on the federal level for employers in states covered by the Second Circuit (New York, Vermont, and Connecticut) and Seventh Circuit (Illinois, Indiana, and Wisconsin) decisions.  And employers in these and other states should remain mindful of state and local laws that provide similar protections.  We encourage employers to review their policies and practices to ensure that they comply with federal, state and local laws in this emerging area of workplace law.

For more information or for any other employment matter impacting your business, please contact the authors of this article or the attorney you regularly work with at Hogan Lovells.

The United States Supreme Court just issued a decision in a highly anticipated whistleblower case, and unanimously held that the antiretaliation provision of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) applies only to employees who make reports of alleged violations of the securities laws to the Securities and Exchange Commission (“SEC”). Digital Realty Trust, Inc. v. Somers, No. 16-1276 (Feb. 21, 2018). In so doing, the Court rejected the view that an employee who complains to management, as opposed to the SEC, is protected under Dodd-Frank. The decision resolves a circuit split between the U.S. Courts of Appeals for the Second and Ninth Circuits—which held that internal reports to management are protected—and the Fifth Circuit—which held that they are not.

Dodd-Frank’s whistleblower protection provision defines a whistleblower as “any individual who provides . . . information relating to a violation of the securities laws to the [SEC].” 15 U.S.C. § 78u-6(a)(6). In the Somers case, Paul Somers, an employee of Digital Realty Trust, Inc. (“Digital Realty”), made complaints to upper management about suspected securities law violations by Digital Realty. When Digital Realty later terminated his employment, he brought a claim under Dodd-Frank, alleging whistleblower retaliation. Digital Realty moved to dismiss his claim, asserting that Mr. Somers failed to state a claim because he did not make a report to the SEC. The Northern District of California denied the motion and the Ninth Circuit affirmed. The Supreme Court reversed the decision below, reasoning that although the SEC had promulgated a rule indicating that reports to a supervisor were covered by Dodd-Frank’s antiretaliation provision, the rule contradicted “clear and conclusive” statutory language—i.e., that the report must be made “to the [SEC]”—and thus was entitled to no deference.

This decision is welcome news for employers facing actual or threatened litigation by employees under Dodd-Frank who allege that they have reported wrongdoing internally. It does not, however, suggest that employers should not take seriously internal reports of wrongdoing. There are many other federal and state laws, besides Dodd-Frank, that protect internal employee-reporters from retaliation. For example, the Somers decision explains that claims of retaliation under Sarbanes-Oxley can be made based on a complaint to a supervisor (although Sarbanes-Oxley has a shorter deadline for filing a claim—only 180 days—an administrative exhaustion requirement not present under Dodd-Frank, and does not permit the same financial recovery as Dodd-Frank). And among the other antiretaliation protections available to employees, employees who make internal complaints of sexual harassment or discrimination are protected from retaliation by Title VII of the Civil Rights Act. Whatever the statutory bases for recovery, it is also important to note that employees bringing claims against employers are increasingly likely to bring claims of retaliation. The Equal Employment Opportunity Commission (“EEOC”) reported in 2017 that nearly half of all charges filed with the EEOC contained claims of retaliation.

If confronted by an employee’s internal or external complaint of wrongdoing, an employer should of course take the complaint seriously, both to ensure the absence of internal misconduct and to avoid liability. Moreover, if the employer is considering taking an adverse employment action against the employee (for example, if the employer is planning a reduction in force that impacts the employee), then it is important to consult counsel to understand what, if any, antiretaliation protections apply to the employee’s conduct in order to assess potential risk. As the Somers decision makes clear, this analysis should include a careful analysis of the applicable statutory text.

 

Suppose that an employee with cancer has exhausted 12 weeks of unpaid leave under the Family and Medical Leave Act (FMLA) but needs more time to recover from treatment before returning to work. Whether such an employee is entitled to additional unpaid leave as a reasonable accommodation under the Americans with Disabilities Act (ADA) is one of the thorny leave questions that employers confront—and one the Supreme Court may soon address, thanks to pending petitions for certiorari in two recent cases out of the Seventh Circuit.

The first case, Severson v. Heartland Woodcraft, Inc., 872 F.3d 476 (7th Cir. 2017), concerns a disabled employee who needed two or three months of leave beyond his FMLA leave to recover from back surgery. The Seventh Circuit held that the employer did not have to provide it. The whole point of ADA accommodations, the Court reasoned, is to allow disabled employees to perform the essential functions of their jobs, not to excuse them from working.  Thus, the Court adopted a per se rule that “[a] multimonth leave of absence is beyond the scope of a reasonable accommodation under the ADA.” Id. at 479.  In the second case, Golden v. Indianapolis Housing Agency, 698 F. App’x 835 (7th Cir. 2017), the Seventh Circuit applied this rule to deny a disabled employee’s claim for additional leave to recover from cancer surgery after FMLA and four weeks of additional employer-approved leave had expired.  The employee sought more leave pursuant to her employer’s policy permitting employees to request up to 6 months of unpaid leave when no other form of leave was available.  At the time of her request, her doctor had not provided an expected return-to-work date.  The Seventh Circuit held the employee’s additional leave request removed her from being a “qualified individual with a disability” under both the ADA and the Rehabilitation Act, which incorporates ADA standards.

The Seventh Circuit’s per se rule is at odds with the EEOC’s 2016 guidance on ADA leave, which requires employers to evaluate such requests on a case-by-case basis.  In the EEOC’s view, even a multimonth leave can be a reasonable accommodation in some circumstances if the end date is reasonably certain. The EEOC continues to apply this approach today.  In January 2018 alone the agency sued one North Carolina employer for denying a diabetic employee’s request for several weeks of additional leave following the period that had been approved initially to recover from surgery, and it announced settlements with employers in Michigan and Mississippi who denied requests for leave extensions.

Like the EEOC, other federal courts apply a fact-intensive approach to ADA leave questions. See, e.g., García-Ayala v. Lederle Parenterals, Inc., 212 F.3d 638 (1st Cir. 2000).  However, the Tenth Circuit, in an opinion by then Judge (now Justice) Gorsuch, seems to have drawn a bright line against requests for leave of more than 6 months. Hwang v. Kansas State Univ., 753 F.3d 1159, 1161 (10th Cir. 2014) (“It perhaps goes without saying that an employee who isn’t capable of working for so long isn’t an employee capable of performing a job’s essential functions—and that requiring an employer to keep a job open for so long doesn’t qualify as a reasonable accommodation.”)  Some courts have also ruled that employees determined to be disabled “indefinitely” after a period of initial leave are not qualified individuals entitled to accommodation under the ADA.   See, e.g., Minter v. District of Columbia, 809 F.3d 66 (D.C. Cir. 2015).

The Supreme Court could grant review in Severson or Golden, or both, in the upcoming months to provide some needed clarity on this issue.  Given the unsettled state of the law, it is prudent for employers to continue engaging disabled employees who cannot return to work at the end of an FMLA or other initial company-approved leave in an interactive process to determine whether additional leave (or some other accommodation) is reasonable.  The amount of leave the employee has already taken, the length of additional leave requested, whether the employee’s doctor is able to provide a reasonably specific return date, and the impact on the employee’s co-workers and the employer’s operations are among the relevant considerations.

Effective January 1, 2018, the California Immigrant Worker Protection Act (the “Act”) requires private and public employers to “resist” informal worksite inspections by federal immigration enforcement agents. This new California law puts employers between the proverbial rock and a hard place by imposing significant fines (penalties between $2,000 and $10,000 per violation) on employers or any persons acting on behalf of employers who voluntarily consent to informal inspection demands and site visits by immigration officials. The new law requires employers to refuse entry to U.S. Immigration and Customs Enforcement (“ICE”) agents or other unspecified “immigration enforcement officials” who request access to non-public areas of the employer’s worksite or who seek to inspect the employer’s records, unless the federal officials present the employer with a valid subpoena or judicial warrant.

New prohibitions

While the new law contains exceptions for the federal E-Verify program and for certain Form I-9 inspection requests, the California State Attorney General and Labor Commissioner issued FAQs and an Advisory Bulletin on February 13, 2018 that make clear the significant burdens imposed on employers under the Act. Specifically, employers, or anyone acting on their behalf, are prohibited, except as otherwise required by federal law, from:

  • Providing voluntary consent to an immigration enforcement agent (for example, an ICE agent) to enter nonpublic areas of a worksite unless the agent provides a judicial warrant.
    • The FAQs define a “judicial warrant” as a warrant that has been reviewed and signed by a judge upon a finding of probable cause. The name of the issuing court will appear at the top of the warrant.
    • The FAQs further state that documents issued by a government agency but not issued by a court and signed by a judge are not judicial warrants. Therefore, if an immigration enforcement agent presents an “administrative warrant” or a “warrant of deportation or removal,” employers will have to resist these official documents because they are not “judicial warrants.”
  • Providing voluntary consent to an immigration enforcement agent to access, review, or obtain the employer’s employee records unless the agent provides a subpoena or judicial warrant.
  • Re-verifying the employment eligibility of a current employee at a time or in a manner not required by federal immigration law.

Employee notification

Employers also must notify their employees if federal immigration officials seek to inspect the employers’ records. Employer are, except as prohibited by federal law, to:

  • Provide each current employee (and the employee’s authorized representative, if any) notice of an inspection of I-9 Employment Eligibility Verification forms or other employment records conducted by an immigration enforcement agency within 72 hours of receiving notice of the inspection.
    • The notice must be posted in the language the employer normally uses to communicate employment information to employees, and must contain: (1) the name of the immigration agency conducting the inspection, (2) the date that the employer received notice of the inspection, (3) the nature of the inspection to the extent known, and (4) a copy of the Notice of Inspection of I-9 Employment Eligibility Verification forms for the inspection to be conducted.
    • The California Labor Commissioner has developed a Template that employers may use to give the required notice.
  • Provide, upon reasonable request, an affected employee a copy of the Notice of Inspection of I-9 Employment Eligibility Verification forms.
  • Provide an affected current employee, and the employee’s authorized representative, if any, a copy of the written immigration agency notice that provides the results of the inspection and written notice of the obligations of the employer and affected employee arising from the inspec­tion results within 72 hours of receipt of the notice of inspection results.
    • This notice must be specific to the affected employee only and must be hand delivered at the workplace, if possible. If hand delivery is not possible, notice must be given by mail or email to the affected employee and the affected employee’s authorized representative, if any. The required notice must contain: (1) a description of any and all deficiencies or other items identified in the written immigration inspection results notice related to the affected employee, (2) the time period for correcting any potential deficiencies identified by the immigration agency, (3) the time and date of any meeting with the employer to correct any identified deficiencies, and (4) notice that the employee has the right to representation during any meeting scheduled with the employer.

Next steps

Employers with operations in California should take the following steps to prepare for the Act:

  • Develop and implement a written policy describing the procedures to follow when federal immigration officials seek access to company facilities or records;
    • The policy should specify who employees on the front lines (receptionists, facility managers, local Human Resources personnel, etc.) should contact within the Company when immigration officials come knocking, how employees should initially respond, and what steps employees must take in light of the Act.
  • Train front line employees on the policy, the requirements of the Act, the meaning of legal terms such as “subpoena” and “judicial warrant,” and the appropriate ways to respond to requests from federal immigration officials.
  • Create an incident reporting ladder that involves internal HR, legal and management functions, as well as outside counsel, so that immigration contacts receive the appropriate attention within in the Company.
  • Develop and implement reporting procedures required by the Act for Form I-9 inspection requests.

For more information about the California Immigrant Worker Protection Act or any other employment matter impacting your business, please contact the authors or the attorney you regularly work with at Hogan Lovells.

Earlier this month, US employers received important news just as the season of hiring summer interns is set to begin. The Department of Labor (“DOL”), through Fact Sheet #71, clarified its position regarding unpaid internships and officially adopted the “primary beneficiary test” for determining whether interns are considered employees under the Fair Labor Standards Act[1] (“FLSA”).  The FLSA requires employers to pay employees for their work, but if an intern or student is not considered an employee, then the employer is not required to compensate them.

Specifically, the “primary beneficiary test” balances the following seven factors:

  1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
  2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
  3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
  6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

Unlike the prior DOL test which, through six enumerated factors questioned whether the employer received an “immediate advantage” from the intern’s work, this is a flexible test. No one factor is determinative and the test is dependent on the unique circumstances of each case, reflecting the economic realities of the individual intern-employer relationship.  In fact, the DOL noted that the change would hopefully provide investigators with “increased flexibility to holistically analyze internships on a case-by-case basis” and “eliminate unnecessary confusion.”

Now that the DOL has embraced the standard adopted by the 2nd, 6th, 11th, and most recently the 9th Circuit, employers finally have guidance on how to structure their internship programs so that interns are not deemed employees under the FLSA.  Along with balancing different factors when evaluating the intern-employer relationship under the FLSA, some states, such as New York, have additional wage laws which cannot be overlooked.

[1] The “primary beneficiary test” has been adopted in the 2nd, 6th, 9th and 11th Circuits through the following cases: Benjamin v. B & H Educ., Inc., — F.3d —, 2017 WL 6460087, at *4-5 (9th Cir. Dec. 19, 2017); Glatt v. Fox Searchlight Pictures, Inc., 811 F.3d 528, 536-37 (2d Cir. 2016); Schumann v. Collier Anesthesia, P.A., 803 F.3d 1199, 1211-12 (11th Cir. 2015); see also Walling v. Portland Terminal Co., 330 U.S. 148, 152-53 (1947); Solis v. Laurelbrook Sanitarium & Sch., Inc., 642 F.3d 518, 529 (6th Cir. 2011).

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.