Maryland Healthy Working Families Act: A PSL-4Step Analysis

DMEC StaffLegislative Updates

Maryland Healthy Working Families Act: A PSL-4Step Analysis

By Michael J. Soltis, Esq.

Paid Sick Leave @Work

The Maryland General Assembly last month overrode Governor Larry Hogan’s veto of the Healthy Working Families Act  (HWFA). Since the HWFA is effective in a few days, on Feb. 11, it seems fitting and proper, as lawyers are wont to say, to post my 4Step analysis of that law.

The law requires the Commissioner of Labor and Industry to develop and post on its website (https://www.dllr.state.md.us/paidleave/), a model poster, notice, and sick and safe leave policy and to provide technical assistance to employers. As of this writing, the model documents have not yet been posted. The Commissioner also “may” adopt regulations necessary to carry out the HWFA.

Here, I use the PSL-4Step framework to analyze the HWFA.

Step 1: Does It Apply?

“Employer” includes state and local government units, and “a person that acts directly or indirectly in the interest of another employer with an employee.”

“Employee” does not include an individual who:

  • performs work under a contract of hire that is determined not to be covered employment under Labor and Employment, Section 8-205;
  • is not a covered employee under Labor and Employment, Section 9-222 (deals with real estate brokers and salespeople);
  • is under the age of 18 years before the beginning of the year;
  • is employed in the agriculture sector on an agricultural operation;
  • is employed by a temporary staffing agency which does not have day to day control over the work assignments and supervision of the individual while providing the temporary staffing services; or
  • is directly employed by an employment agency to provide part-time or temporary services to another person.

Also, the HWFA does not apply to an employee:

  • who regularly works less than 12 hours a week for an employer;
  • is in the construction industry but is not a janitor, a building cleaner, a building security officer, a concierge, a doorperson, a handyperson, or a building superintendent and who is covered by a collective bargaining agreement in which the requirements of the HWFA law are expressly waived in clear and unambiguous terms;
  • who is “called to work by the employer on an as-needed basis in a health or human services industry, [who] can reject or accept the shift offered by the employee, is not guaranteed to be called on to work by the employer, and is not employed by a temporary staffing agency.”

Also, the law does not affect any bona fide collective bargaining agreement entered into before June 1, 2017 for the duration of the contract term, excluding any extensions, options to extend, or renewals of the term of the original agreement.

Finally, if a unit of state or local government’s sick leave accrual and use requirements meet or exceed leave under the HWFA, employees of that unit who are part of the unit’s personnel system are subject to the unit’s laws, regulations, policies, and procedures providing for accrual and use of leave, grievances, and disciplinary actions. Any employees in such unit not covered by the unit’s sick leave and accrual and use requirements are subject to the HWFA.

Step 2: The Benefit

Accrual

One hour of earned sick and safe leave (ESSL) for every 30 hours worked beginning the later of Jan. 1, 2018 or date of hire. However, an employer need not allow an employee to accrue leave during:

  • a 2-week pay period in which the employee worked fewer than 23 hours total;
  • a 1-week pay period if the employee worked fewer than a combined total of 24 hours in the current and the immediately preceding pay period; or
  • a twice-monthly pay period if the employee worked fewer than 26 hours in the pay period.

An employee may use accrued ESSL beginning the 106th calendar day of employment. An employer may allow an employee to use ESSL before it is accrued. If an employee leaves before accruing what has been taken, the employer may deduct the balance from the wages paid to the employee at termination if the employer and employee have mutually agreed to the deduction in a document signed by the employee.

An employer may cap accrual at 40 hours per year (a regular and consecutive 12-month period determined by employer), annual use at 64 hours per year, and the maximum accrual at any time to 64 hours.

Exempt Employees

Exempt employees are assumed to work 40 hours weekly unless their normal work week is less than 40 hours, in which case ESSL accrues based upon that normal work week.

Rate of Pay

An employer with at least 15 employees shall provide an employee with ESSL paid at the same wage rate as the employee normally earns. An employer may pay a tipped employee the applicable minimum wage for ESSL. An employer that employs 14 or fewer employees shall at least provide an employee with unpaid ESSL. To determine the number of employees, calculate the average monthly number of employees during the immediately preceding year. Every employee, including part-time, temporary, and seasonal employees, shall be included in the calculation.

Unused Hours

Up to 40 hours may be carried over to the following year unless the employer frontloads ESSL at the beginning of each year or if the employee is employed by a nonprofit entity or a governmental unit in accordance with a grant, the duration of which is limited to one year and is not subject to renewal.

Alternatives to Accrual

An employer may frontload the full amount of sick time.

Uses of ESSL
  • Employee’s or family member’s mental or physical illness, injury or condition, or preventative medical care
  • For maternity or paternity leave
  • If absence is due to domestic violence, sexual assault, or stalking (each a defined term) committed against the employee or employee’s family member, the employee uses the leave to obtain for the employee or employee’s family member: medical or mental health attention that is related to the domestic violence, sexual assault, or stalking; related services from a victim services organization; related legal services or proceedings; or by the employee to temporarily relocate due to domestic violence, sexual assault, or stalking.
Minimum Increments of Use

ESSL may be used in the smallest increment that the employer’s payroll system uses to account for absences or use of other time except that an employer may require increments of up to four hours.

Step 3: Common Clauses

Family Member
  • Child (biological, adopted, foster, step-child); child for whom the employee has legal or physical custody or guardianship; child for whom the employee stands in loco parentis regardless of child’s age
  • Parent (biological, adoptive, foster, step-parent) of employee or employee’s spouse
  • Legal guardian of the employee
  • An individual who acted as a parent or stood in local parentis to the employee or the employee’s spouse when the employee or the employee’s spouse was a minor
  • Spouse
  • Grandparent (biological, adopted, foster, step-grandparent) of employee
  • Grandchild (biological, adopted, foster, or step-grandchild) of employee
  • Sibling (biological, adopted, foster, step-sibling) of employee
Notice Requirements
  • Employee notice:
    • If need to use leave is foreseeable, employer may require notice of up to seven days before the date the absence would begin.
    • If need to use leave is not foreseeable, employee shall notify the employer as soon as practicable and “generally comply with the employer’s notice or procedural requirements for requesting or reporting other leave, if those requirements do not interfere with the employee’s ability to use” ESSL.
    • An employer may deny a request to take ESSL if an employee fails to provide the notice above, and the employee’s absence will cause a disruption to the employer.
    • Also, a private, licensed employer under Title 7 or 10 of the Health-General Article which provides services to developmentally disabled or mentally ill individuals may deny a request for ESSL if the need to use ESSL is foreseeable and after exercising reasonable efforts, the employer is unable to provide a suitable replacement and the employee’s absence will cause a disruption of service to at least one individual with a developmental disability or mental illness. (Note: It is unclear whether this provision applies only if the employee fails to provide notice).
  • Employer notice:
    • When wages are paid to an employee, an employer must provide in writing by any reasonable method (including an online system) a statement regarding the amount of ESSL available for use by the employee.
    • An employer shall notify employees that they are entitled to ESSL; how ESSL is accrued; the purposes for which it may be used; the prohibition against the employer taking adverse action against an employee who exercises a right under this law; the prohibition against an employee making a complaint, bringing an action, or testifying in an action in bad faith; and information regarding an employee’s right to report the employer’s alleged violation of this law to the Commissioner or bring a civil action.
    • The Commissioner shall create and post on its website a model notice for employers to use.
Documentation

An employer may require verification that ESSL leave was used appropriately if the leave was used for more than two consecutive shifts or the employee used the leave during the period between the first 107 and 120 calendar days of employment (inclusive), and the employee agreed at the time of hire to provide verification. If an employee fails or refuses to provide verification under these two scenarios, the employer may deny a subsequent request to take ESSL for the same reason.

Replacement Requirement

This is prohibited. An employer may not require an employee to search for or find a replacement to cover the employee’s ESSL

Shift Swapping

By agreement between the employer and employee, an employee may work additional hours or trade shifts with another employee during a pay period or the following pay period to make up work hours that the employee took off for which the employee could have taken ESSL. If an employee worked additional hours, the employer cannot deduct the absence from the employee’s accrued ESSL.

If a tipped employee in the restaurant industry prefers and is able to work additional hours or trade shifts with another employee in the same or following pay period and requires the employer to cover the shift, the employer can offer the employee a choice of being paid the minimum wage for the absence or work an equivalent shift of the same number of hours in the same or following pay period.  If the employer does not offer this choice, the employer shall pay the minimum wage for time absent.

An employee is not required to offer or to accept an offer of additional hours or a trade in shifts.

An employer need not consent to an employee’s request to work additional hours or trade shifts if the hours or shift would result in requiring the employer to pay overtime.

Termination of Employment

There is no requirement to pay an employee for unused ESSL if employment terminates for any reason.

Effect of Employee’s Rehire

If an employee is rehired by the same employer within 37 weeks of separation, previously accrued but unused ESSL shall be reinstated unless the employer had paid it out upon termination.

Effect of Sale of Business

When a different employer acquires an existing employer, employees of the original employer who remain employed with the successor are entitled to all ESSL they accrued when employed by the original employer.

Safe Harbor

If an employer has an existing paid leave policy that permits an employee to accrue and use leave under the terms and conditions that are at least equivalent to EESL or does not reduce employee compensation for an absence due to sick or safe leave, an employer need not modify its existing policy. A policy shall be presumed to be equivalent if it allows an employee to access and accrue paid leave at the same or faster rate than under this law and may be used for the purposes listed in the HWFA. An existing paid leave policy includes vacation days, sick days, short-term disability benefits, floating holidays, parental leave, and any other paid time off that may be used under the terms and conditions as paid sick and safe leave.

Fraudulent Use

The HWFA does not prohibit an employer from adopting and enforcing a policy prohibiting the improper use of ESSL, including prohibiting a pattern of abuse of ESSL.

Relationship to Other Laws

This law may not be construed to preempt any federal law or regulation governing employees subject to such law or regulation. It also does not “preempt, limit, or otherwise affect” any other law that provides for sick and safe leave benefits that are more generous than are required under this law, and any workers compensation benefits.

Employer Prohibitions

Am employer may not take an adverse action or discriminate against an employee because the employee exercises in good faith the rights under this law; interfere with, restrain, or deny the exercise by an employee of any right under this law; or apply an absence control policy that includes ESSL as an absence that may lead to or result in an adverse action being taken against an employee. “Adverse action” includes discharge, demotion, threat of discharge or demotion, and any other retaliatory action that results in a change to the terms or conditions of employment that would dissuade a reasonable employee from exercising a right under this law.

In addition to an employer, a “person” may not interfere with the exercise of or the attempt to exercise any right under this law.

The protections of the law apply to any person who mistakenly, but it in good faith, alleges a violation of the law.

Payroll Records

Employers must maintain records of accrual and use of earned sick time for at least three years. If an employer fails to keep accurate records or refuses to allow the Commissioner to inspect such records, there shall be a rebuttable presumption that the employer violated this law.

Enforcement

An employee may file a written complaint with the Commissioner. If the Commissioner determines that an employer violated the law, the Commissioner shall issue an order directing the payment of “make whole relief” and an additional amount of up to three times the value of the employee’s hourly wage for each violation, and may assess a civil penalty of up to $1,000 per employee for whom the employer is not in compliance. If an employer does not comply with the Commissioner’s order, the Attorney General, the Commissioner or the employee may bring an action to enforce the order. If an employee brings the action, the court may award three times the value of the employee’s unpaid ESSL, punitive damages, reasonable attorneys’ fees, and other costs.

To the extent practicable, the Commissioner shall keep confidential the identity of an employee who has filed a written complaint unless the employee waives confidentiality.

Step 4: Unique Provisions

An employer may require verification that ESSL leave was used appropriately if the leave was used for more than two consecutive shifts. PSL laws typically require an absence of at least three consecutive days before an employer can require documentation.

A qualified preemption provision. Local jurisdictions may not enact a law regulating sick and safe leave, but the Montgomery County’s Earned Sick and Safe Leave Law is grandfathered in.

An employee who acts in bad faith when filing a complaint with the Commissioner about a purported HWFA violation, testifying in an HWFA action, or bringing an action in court is guilty of a misdemeanor and subject to a fine of $1,000.

The definition of “employer” is a bit odd. Nearly all other PSL laws define employer broadly to specifically encompass every type of organization that employs employees. The definition in the HWFA does not do that (see above).


***This article originally appeared on the Paid Sick Leave @Work site and was reposted on the DMEC website with their permission.***