Most Maryland employers will be required, beginning sometime during the first half of 2018, to provide sick leave to their employees. It’s not entirely clear when this requirement will kick in. Mandatory employee sick leave was enacted by the Maryland Legislature last year but was vetoed by Governor Hogan. The Governor’s veto was overridden by the Legislature, on January 12, 2018. With this veto override, the law is presently scheduled to go into effect on February 11, 2018 (30 days after the override vote).
The main sponsor of the legislation has introduced emergency legislation that would delay implementation of the law for an additional 60 days, to mid-April. Many members wish to allow more time for the Hogan administration to draft implementing rules and regulations. Some Republican members of the Legislature have called for implementation to be delayed further, until July 2018. Unless the Legislature passes emergency legislation before the end of this year’s three-month legislative session, however, Maryland employers will have to provide the required sick leave benefits starting on February 11, 2018. Based on information published by the Legislature, here is a summary of what the law will require, once it goes into effect:
Which employers will be required to provide sick leave?
- Maryland employers with 15 or more employees must provide paid sick leave.
- Maryland employers with fewer than 15 employees also must provide sick leave, but for these employers, the leave may be unpaid.
- To determine the number of employees for these purposes, the law looks to the average monthly number of persons employed during the prior twelve months, including full-time, part-time, temporary, and seasonal employees.
- The following classes of employees are not covered:
- Employees that regularly work fewer than 12 hours a week.
- Construction industry employees who are covered by a collective bargaining agreement that expressly waives the right to leave under this Act.
- Employees that work on an as-needed basis in the health or human services fields, to the extent they (1) can reject a shift offered by the employer, (2) are not guaranteed work by the employer, and (3) are not employed by a temporary staffing agency.
- Independent contractors
- Licensed real estate salespersons or brokers, or those affiliated with a licensed broker by a written agreement, who are paid solely on commission, and who qualify as independent contractors for federal tax purposes.
- Employees that were under the age of 18 before the beginning of the year.
- Agricultural employees processing crops or working for a farmer in the production, harvesting or marketing of the product.
- Temporary staffing agency employees, if the agency does not have day-to-day control over their work assignments and supervision.
- Employment agency employees providing part-time or temporary services to another person.
How does sick leave accrue?
- Sick leave must accrue at a rate of at least 1 hour for every 30 hours worked.
- Exempt employees are assumed to work 40 hours in a workweek unless they are regularly scheduled for fewer hours, in which case their regularly scheduled hours are used.
- Tipped employees receiving paid leave must be compensated at the minimum wage rate, which will be $9.25 at the time that the law becomes effective.
- An employer may choose any 12-month period to constitute a “year” for purposes of accruing leave under the Act.
- The amount of leave that may be earned per year is capped at 40 hours (five 8-hour days).
- The total amount of leave that may be accrued (including carryover, as discussed below) may be capped at 64 hours (eight 8-hour days).
- The total amount of leave that may be used by an employee may be capped at 64 hours per year.
- An employer is not required to allow accrual of leave: (1) during a two-week pay period in which the employee worked fewer than 24 hours; (2) during a one-week pay period in which the employee worked fewer than 24 hours in the current and immediately preceding pay period; or (2) during a semi-monthly pay period in which the employee worked fewer than 26 hours.
- An employee starts accruing sick leave immediately upon hire, but an employer may prohibit the use of leave during the initial 106 calendar days of employment.
Does sick leave carry over from year to year?
- Employers are allowed to make available to employees the full annual allotment of leave at the beginning of the year. If an employer does so, then it is not required to permit carry-over from year to year
- If an employer does not make the full annual allotment available at the beginning of the year, however, the employer must permit carryover of the balance of any unused leave to the next year, up to a maximum of 40 hours.
May an employee use his or her sick leave to care for family members?
- Yes, and there is a broad definition of family members for these purposes, including:
- Child, including biological, foster, adopted, or step, as well as one for whom the employee has legal or physical custody or guardianship, or stands in loco parentis (i.e. acts as the parent, regardless of the legal relationship).
- Parent, including biological, foster, adopted, or step for the employee or the employee’s spouse, as well as one who was the legal guardian of or stood in loco parentis to the employee or employee’s spouse.
- Grandparent, including biological, foster, adopted, or step, of the employee.
- Grandchild, including biological, foster, adopted, or step, of the employee.
- Sibling, including biological, foster, adopted, or step, of the employee.
May an employee use leave before it has accrued?
- An employer may, but is not required to, permit an employee to “borrow” leave that has not yet been accrued.
- If the employee terminates employment before the borrowed leave has been accrued (and therefore paid back), the employer may deduct the advanced amount of leave from the employee’s final paycheck only where there is a written, signed authorization by the employee to allow the employer to do so.
- If an employee is rehired within 37 weeks, the employer must reinstate the bank of unused leave unless it was paid out upon termination.
- If an employer acquires another company and retains employees from that company, the employees retain the leave accrued under the prior company.
Does an employee receive payment for accrued but unused sick leave, at the end of employment?
- An employer is not required to pay out accrued but unused leave upon termination of employment.
Does an employee need to give prior notice to the employer, before using sick leave?
- If the need for sick leave is foreseeable, an employer may require its employees to provide up to seven days of notice before taking leave.
- If the need is not foreseeable, the employee must provide notice of the need for such leave as soon as practicable, and must comply with the employer’s notice requirements for absences, as long as those requirements do not interfere with the ability to use leave.
- The employer may deny the use of leave if the employee fails to provide the required notice, and the absence will cause a disruption.
- An employer is not allowed to require an employee to look for or find a replacement worker, as a prerequisite to taking sick leave.
Can an employer require proof of proper use of sick leave?
- Yes. An employer may request verification of the appropriate use of leave if an employee uses more than two consecutive scheduled shifts of leave.
- Verification may also be required if the employee uses leave between the 107th through 120th calendar days after beginning employment, on terms that the employee agreed to at the time of hire.
- If the employee fails to provide the verification, subsequent requests to take leave for the same reason may be denied.
Are their record-keeping requirements?
- Of course, there are! Each time wages are paid, an employer must provide a written statement of available leave. This requirement may be satisfied through an electronic system where the employee can access their leave balances.
- Employers must maintain records, for at least three years, of leave accrued and used by each employee. Failure to keep these records creates a rebuttable presumption that the employer has violated the Act. These records must be available for inspection by the DLLR.
It’s important for all Maryland employers to examine their leave policies before the present effective date of the law (February 11, 2018) to ensure compliance. After the law goes into effect, employees will have the right to file complaints about violation of the law with the commissioner of the DLLR.
This summary is not legal advice, and should not be used for this purpose. Please contact the Law Office of Steven J. Lewicky with any questions about these new requirements.
Maryland employers and workers have reason to be confused about an anticipated expansion of eligibility for overtime pay. In May, the U.S. Department of Labor issued a regulation that would have doubled (to $47,476) the salary threshold at which many workers have a right to receive time-and-a-half pay, for workweeks that exceed 40 hours. The rule also would have indexed to inflation future increases in this threshold. The rule was to have taken effect on December 1, but a few days ago a U.S. District Court judge in Texas issued an injunction barring the rule’s implementation, holding that the Department of Labor may have exceeded its authority in issuing the rule.
The court’s ruling was handed down as Congressional leaders were giving consideration to adjourning earlier than Congress otherwise would have, to preserve the incoming Republican Congress’ ability to legislatively block the new rule in January 2017. Under the Congressional Review Act, adjourning the current Congress early would stop the clock for legislative review until the new Congress convenes. Congress might still go forward with this blocking action in January, despite the Texas court’s injunction, since the injunction could prove to be temporary. In addition, Congressional action would have a nation-wide effect, while the impact of court action could eventually become regionally fractured if some federal Circuit Courts continue to block the regulation, while other Circuits uphold the regulation (should Congress fail to act in January). As long as the ninth seat on the Supreme Court remains vacant, anticipated splits between the Circuit Courts of Appeal on this issue would remain in place, if Congress does not legislatively block the regulation.
Many employers have already informed their employees of pay increases that would take categories of their workers above the regulation’s $47,476 threshold. This new threshold now no longer is legally binding – as long as the Texas injunction remains in place, and/or if Congress blocks the rule in January – yet employers fear an adverse impact on employee morale should they rescind previously-awarded pay increases. On the other hand, honoring previously-announced increases that are no longer necessary in order to keep an employee under the applicable salary threshold would mean incurring salary costs that are not legally required.