On January 12, 2018, the Maryland legislature overrode Governor Larry Hogan’s veto of the Healthy Working Families Act, which requires Maryland businesses to provide covered employees with paid sick and safe leave (PSSL). Maryland’s paid sick leave law takes effect on February 11, 2018.
Which Employers are Covered?
All Maryland employers that employ 15 or more employees must provide PSSL. Employers with 14 or fewer employees must provide unpaid leave. Business size is determined by calculating the average monthly number of employees employed during the immediately preceding year. All employees are counted, including full-time, part-time, temporary, and seasonal employees.
Which Employees are Not Covered?
The Act does not define who is a covered employee. It, instead, defines who is not covered. The following are not covered: (1) independent contractors; (2) real estate salespeople or associate real estate brokers; (3) agricultural employees; (4) individuals employed by a temporary services agency to provide temporary staffing services to another person if the agency does not have day-to-day control over the work assignments and supervision of the individual while providing temporary staffing services; (5) individuals directly employed by an employment agency to provide part-time or temporary services to another person; (6) individuals who regularly work fewer than 12 hours a week; (7) individuals who are called to work by the employer on an as-needed basis in a health or human services industry, can reject or accept the shift offered by the employer, are not guaranteed to be called on to work by the employer, and are not employed by a temporary staffing agency; and (8) any employee employed in the “construction industry”, as the term is defined, who is covered by a collective bargaining agreement in which the Act’s requirements are expressly waived in clear and unambiguous terms.
The Act does not add to or alter the provisions of any bona fide collective bargaining agreement entered into on or before June 1, 2017, for the duration of the original contract term.
What are Acceptable Uses of PSSL?
For “sick” time purposes, leave can be used for: (1) care for or treatment of an employee or family member’s mental or physical illness, injury, or condition; or (2) preventive medical care for an employee or family member. “Safe” time leave can be used for purposes due to domestic violence, sexual assault, or stalking committed against the employee or family member. This includes: (1) medical or mental health attention, services from a victim services organization; (2) legal services or proceedings; or (3) time taken to temporarily relocate for safety reasons. Leave can also be used for maternity or paternity leave. “Family members” include children, grandchildren, grandparents, parents (including in-laws), siblings, and spouses.
How Much Leave?
If an employer’s existing paid leave policy permits employees to access and accrue leave at the same or greater rate as under the Act, and leave can be used for the same purposes, additional PSSL need not be provided. Additional leave is also not required if under the policy an employee’s pay is not reduced for a PSSL absence.
Otherwise, statutory PSSL begins to accrue on the Act’s effective date, or when employment begins, whichever is later. Covered employees accrue one leave hour for every 30 hours worked. Employees who are exempt from federal and state overtime requirements accrue leave based on a 40-hour workweek or their normal workweek, whichever involves fewer hours. However, covered employees do not accrue PSSL in the following situations:
- During any two-week pay period in which they work fewer than 24 hours total;
- During any one-week pay period in which they work fewer than a combined total of 24 hours in the current and immediately preceding pay period; or
- During any pay period in which they are paid twice a month regardless of the number of weeks in a pay period, and worked fewer than 26 hours in the pay period.
Employees may accrue up to 40 leave hours each year and employers may limit total accrual to no more than 64 hours at any time. Employees may carry over up to 40 unused leave hours each year, subject to the 64-hour cap. Carryover is not required if the employer provides the full amount of required PSSL at the beginning of each year.
Accrued unused PSSL need not be paid out when employment ends. If an employee was advanced leave to use before it was accrued, the balance owed may be deducted from final wages if the employee authorized the deduction when the leave was used.
What Increments of Leave Can Employees Use?
Employers are not required to allow employees to use leave during their first 106 calendar days of employment. No more than 64 leave hours can be used each year. An employee may take leave in the smallest increment that the employer’s payroll system uses to account for absences or use of work time, but employers can require employees to take such leave in minimum increments of 4 hours or less.
Can Employers Require Advance Notice?
If the need to use leave is foreseeable, an employer may require an employee to provide reasonable advance notice of not more than seven days before the date the anticipated leave would begin. If it is unforeseeable, notice must be provided as soon as practicable. A request may be denied if an employee fails to provide required notice and the absence will cause a disruption to the employer.
Can Employers Require Verification of Appropriate Use?
Employers can require employees to verify that leave was taken for a covered purpose when leave is used for more than two consecutive scheduled shifts. Verification can also be required if leave is taken between the first 107 and 120 calendar days of employment, and at the time of hiring the employee agreed to provide verification under terms mutually agreed to by both parties. If an employee fails or refuses to provide required verification, an employer can deny a subsequent request to take statutory leave.
Leave must be paid at the same rate at which the employee normally earns wages. Tipped employees must be paid the full state minimum wage.
Employer Notice Obligations
Employers must notify employees of their rights under the law, and the notification must include the following information: (1) how leave is accrued; (2) the purposes for which leave can be used; (3) prohibitions against adverse action against an employee for exercising a protected right; and (4) the ability to report an alleged violation to the state labor department or file a private lawsuit. The state labor department will create a poster and model notice that employers can use to comply with the notice requirement.
Employer must also provide the amount of leave that is available in writing. This may be accomplished via an online system through which employees can access their leave balances.
Prohibitions, Remedies, and Penalties
Interfering with, restraining, or denying the exercise of a protected right is prohibited, as is taking adverse action or discriminating against employees exercising such rights in good faith. Protections apply to an employee who mistakenly, but in good faith, alleges a violation of the law.
Absences for use of sick and safe leave cannot count as an absence that may lead to or result in an adverse action.
An employer may not require that an employee search for or find replacement work when taking leave.
An employer that violates the law is guilty of a misdemeanor and, if convicted, will be subject to a fine not to exceed $1,000 per employee.
Coverage: All employers with employees in Maryland.
Effective: February 11, 2018
Action Required: Guidance interpreting the new PSSL has not yet been issued. Indeed, Maryland lawmakers are actively considering a compromise measure that could amend certain aspects of this new law. As such, you should monitor legislative activity for any changes and keep an eye out for future communications.
In the meantime, you should review your existing policies, practices, and forms and make any necessary changes. Employers with employees in Montgomery County will need to also coordinate compliance with that county’s sick leave requirements. (NOTE: While Prince George’s County recently enacted a sick leave law, House Bill 1 appears to preempt the county law). Once guidance is issued on the law’s interpretation, the Sick Leave Toolkit, which includes Frequently Asked Questions and model sick leave policies for jurisdictions with sick leave laws, will be updated to include Maryland PSSL. The updated Toolkit will be available on FormSource in the Leave and Return to Work section or in your Forms Library as applicable.
As always, please be sure to contact your HR Business Partner if you have any questions and let your PSR know if you would like to have sick leave accruals appear on your employees statements.