The Seattle Office for Civil Rights (SOCR) has issued proposed rules implementing the controversial paid sick/safe leave ordinance that the Seattle City Council passed last year. The ordinance requires employers to provide their employees who work in Seattle with paid sick or "safe" time off, which we refer to below as "Seattle Time." The proposed rules address a number of issues that had troubled employers seeking to understand their obligations under the ordinance. For background, see our prior summary of the ordinance.

The interpretations described below are not final. Public meetings will be held on April 12 and April 17 to receive comments on the proposed rules. Written comments may be submitted until April 30. SOCR expects to issue final rules in May. The ordinance is still scheduled to take effect on September 1, 2012.

Employer Coverage: Integrated Enterprises and Joint Employers

Employers located outside of the City of Seattle are not exempt from the Seattle ordinance if they have employees who perform work in Seattle. In addition, an "employer" may include more than one formal business entity. Separate entities that form an integrated enterprise would be treated as a single employer under the proposed rules. And two separate employers that did not form a single enterprise could in some circumstances be deemed "joint employers," each of which would be responsible for providing employees with the benefits of the ordinance.

Employee Coverage: Location of Work

Telecommuters who telecommute from Seattle would be covered for hours that they work in Seattle. Telecommuters who telecommute from outside of Seattle would not be covered for hours that they work outside Seattle.

Employees who sometimes work in Seattle and sometimes outside the city would be covered once they had worked 240 hours in Seattle in a calendar year, and such employees would remain covered for the rest of that calendar year and the following calendar year.

Employees traveling through Seattle with no work-related stops in the city would not be considered to be "working in Seattle." Employees who stopped for a work-related purpose (such as making a delivery) would be deemed to be working in Seattle during the stop and during all time spent within Seattle traveling to and from the stop.

All employees would be allowed to use Seattle Time during times they were scheduled to work in Seattle—and apparently not at other times.

"Hours Worked" and "Full-Time Equivalents"

Employers' obligations under the ordinance vary in some respects, depending on the size of the employer. Size is measured in terms of full-time equivalent employees (FTEs), not individual employees. FTEs, in turn, are measured in terms of "hours worked for compensation that add up to one full-time employee." The proposed rules state that "hours worked" would include overtime (for nonexempt employees) but would not include paid or unpaid leave time.

"Hours worked" are also the basis for accruals of Seattle Time. Under the proposed rules, Seattle Time would accrue for nonexempt employees based on both straight time and overtime. Employees would not be entitled to accrue Seattle Time during paid or unpaid leave time.

Employers apparently would not be required to track exempt employees' hours of work except in the case of exempt employees who sometimes work in Seattle (and who thus might become eligible for Seattle Time by working more than 240 hours of work in Seattle in a calendar year).

PTO Policies

In the terminology of the Seattle ordinance, a "combined or universal leave policy" is a policy that does not differentiate between sick leave and other paid time off. Such policies are commonly called "PTO policies." The ordinance requires larger employers who have such policies to provide more paid sick/safe time than they would have to provide if they had separate sick leave and vacation policies. Some employers have questioned whether they would be deemed to have a combined or universal leave policy if, for example, they allowed employees to use vacation time as Seattle Time once an employee had used all of his or her sick leave. The proposed rules state that such an employer would not be deemed to have a combined or universal leave policy.

Other PTO-related clarifications include:

  • Employers with combined or universal leave policies could not require employees to disclose whether they were using PTO as Seattle Time or for some other purpose.
  • If an employee used all of his or her paid time off for vacation, leaving no cushion for use as Seattle Time, the employer would not have to provide additional time for use as Seattle Time.

Pay Rates During Seattle Time

The proposed regulations address several issues relating to the rate at which Seattle Time must be paid out. The proposed rates are not the "regular rate" as that term is used in overtime calculations for nonexempt employees.

  • Pay for nonexempt hourly employees would be at straight time if they took Seattle Time off during their normal workweek. If they took Seattle Time during scheduled overtime or at other times when they would receive a premium pay rate for working, then compensation for the Seattle Time would be at the premium rate.
  • An hourly rate of pay for nonexempt salaried employees would be determined by "dividing the annual salary by 52 to get the weekly salary and dividing the weekly salary by 40 or fewer hours, even if the non-exempt employee regularly works more than 40 hours per week." For salaried exempt employees, the "weekly salary" would be divided by the number of hours in the employee's normal workweek.
  • Employees would be entitled to compensation only for time that they were scheduled to work.

Combating Fraud and Abuse

The ordinance prohibits employers from requesting documentation regarding an employee's use of Seattle Time until the employee has been absent for more than three consecutive days. Apparently recognizing that the ordinance was not intended to provide so much room for fraudulent and abusive use of Seattle Time, SOCR's proposed rules provide a modest degree of relief.

  • "Consecutive days" would refer to full or partial days and would refer to work days, not calendar days. Thus, an employee with a Monday-through-Friday work schedule would use three consecutive days of Seattle Time by claiming Seattle Time to cover an early departure on Thursday, a full-day absence on Friday, and a late arrival on Monday.
  • Faced with "a pattern or clear instance of abuse," an employer could require documentation of the legitimacy of a Seattle Time request before the employee had used three consecutive days of time. A pattern or clear instance of abuse would include, but not be limited to, "employees who are absent repeatedly or whose absences precede or follow regular days off or follow some other pattern without legitimate reason, or who abuse paid sick time, or who obtain, attempt to obtain or use sick time fraudulently, or whose absences are the result of misconduct during working hours."

Stay Tuned

The interpretations described above are only some of the issues addressed in the proposed rules. Also, as noted, the proposed rules are subject to change based on public commentary between now and the end of April. SOCR expects to issue final rules in May. At that time, employers who have employees in Seattle will want to review their paid leave policies in detail to ensure that they will be in compliance with the ordinance no later than September 1, 2012.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.