United States: Attorney General's Office Issues Final Regulations On Massachusetts Sick Time Law

On June 19th, the Massachusetts Attorney General's Office (AGO) issued final regulations for the Massachusetts Earned Sick Time Law, which goes into effect next week on July 1, 2015. The final regulations, available here, differ in material ways from the proposed regulations and address a number of compliance issues that employers have raised in public hearings and by public comment. A brief summary of some key differences in the final regulations are addressed below.

Summary of the Law

  • The Earned Sick Time law requires employers to provide all employees, including part-time, seasonal and temporary employees, one hour of sick time for every 30 hours worked, up to a maximum of 40 hours per year. Employers with 11 or more employees must provide paid sick time, while those with fewer than 11 employees must provide unpaid sick time.
  • Qualifying reasons for taking sick time under the law include: (1) caring for a physical or mental illness, injury, or medical condition affecting the employee or the employee's child, spouse, parent, or parent of a spouse; (2) attending routine medical appointments of the employee or the employee's child, spouse, parent, or parent of a spouse; or (3) addressing the effects of domestic violence on the employee or the employee's dependent child.
  • Employees begin accruing earned sick time on the law's effective date or their date of hire, whichever is later, but are not entitled to use any earned sick time until they have been employed for 90 days.
  • Employees may carry over up to 40 hours of sick time from one year to the next, but may not take more than 40 hours of sick time in any one year.
  • Employers are not required to pay employees for accrued but unused sick time at the time of termination.

Final Regulations

The final regulations addressed a number of issues regarding accrual, use and documentation of sick time, as well as the temporary safe harbor for employers with current PTO policies.

Same Hourly Rate

  • For employees paid on an hourly basis, the same hourly rate means the employee's regular hourly rate. The AGO removed language that the same hourly rate would include any benefits accrued on an hourly basis (e. that employees would accrue sick time while using sick time).
  • For an hourly employee whose regularly hourly rate is a "differential rate," (e. a different wage rate paid for the same work performed in a different shift), the "differential rate" must be paid. This is a significant change from the proposed regulations and will impact hospitals and other employers who pay shift differentials.
  • For tipped employees, the same hourly rate means the minimum wage in effect. The regulations do not clarify if it is the minimum wage when the time accrues or when the time is used, so employers should assume it is the minimum wage in effect when the time is used.
  • For salaried employees, the same hourly rate means the employee's total earnings in the previous pay period divided by the total hours worked (which is assumed to be 40 hours unless the employee is regularly scheduled to work less than 40 hours per week). The AGO revised this provision so that employers need not calculate the actual hours worked by salaried employees in the previous pay period.

Accrual of Earned Sick Time

  • The final regulations allow employers to opt to delay further accrual once an employee has a bank of 40 hours of earned sick time until the employee draws down the bank to below 40 hours.
  • After numerous questions on the accrual rate, the AGO specified that employers may track accrual at an accrual rate of one hour for every 30 hours worked or any equivalent accrual rate with smaller increments of time (g. one minute of sick time per 30 minutes worked).

Use of Earned Sick Time

  • The final regulations clarify that the smallest amount of sick time an employee can use is one hour. Only after using at least one hour of sick time can an employee earned sick time in the smallest increment the employer's payroll system uses to account for absences or other time.
  • The AGO made clear that employees may not use earned sick time as an excuse to be late for work without an authorized purpose and that if an employee exhibits a clear pattern of taking leave on days just before or after a weekend, vacation or holiday, then the employer may discipline the employee for misuse of earned sick time (unless the employee provides verification of authorized use).

Breaks in Service

  • The AGO revised the break in service rules to partially limit employees' right to maintain banked earned sick time.
  • Following a break in service of up to 4 months, an employee maintains the right to use any unused earned sick time accrued before the break in service.
  • Following a break in service of between 4 and 12 months, an employee maintains the right to use earned sick time accrued before the break in service if the employee's unused bank of earned sick time equals or exceeds 10 hours.
  • Following a break in service of up to 12 months, employees maintain their vesting days from the employer so that they do not need to restart the 90-day vesting period.

Employer Size

  • The final regulations require employees working at an employer through a temporary staffing agency and paid by the staffing agency to be counted as employees of both the staffing agency and the employer.
  • Employers also must notify eligible employees at least 30 days in advance in writing if earned sick time will be changing from paid to unpaid or from unpaid to paid sick time based on a change in employer size.
  • Employers should note that earned sick time is paid when used if the time was paid when it accrued (based on employer size or practice), and is unpaid when used if the time was unpaid when it accrued.

Documentation of Use of Time

  • The final regulations expand the circumstances under which employers can require written documentation for an employee's use of earned sick time to include when the time: (i) exceeds 24 consecutively scheduled work hours; (ii) exceeds 3 consecutive days on which the employee was scheduled to work; (iii) occurs within 2 weeks prior to an employee's final scheduled day of work before termination of employment, except in the case of temporary employees; (iv) occurs after 4 unforeseeable and undocumented absences within a 3-month period; or (v) for employees aged 17 and under, occurs after 3 unforeseeable and undocumented absences within a 3-month period.
  • Employers also may require employees to personally verify in writing that they used earned sick time for allowable purposes after using sick leave, but employers cannot require employees to explain the nature of an illness or details of domestic violence.
  • The AGO added a provision allowing employers to require an employee to provide a fitness-for-duty certification from a medical provider before returning to work after using earned sick time if such certification is customarily required and consistent with industry practice or state/federal safety requirements, and the employer has a reasonable belief that the employee may pose a significant risk of harm to him/herself or others.

Allowable Substitution of Paid Leave Policies

  • The regulations allow employers to have different paid leave policies for different groups of employees if the employees can use at least the same amount of time, for the same purposes, under the same conditions and with the same job protections required by the law.
  • The final regulations did not remove the requirement that an employer-provided PTO policy comply with the accrual rate of at least one hour for every 30 hours worked, but did provide the following schedule of compliant accrual rates for employees working the following numbers of hours per week:

    • 5 – 40 hours per week, provide 8 hours per month for 5 months.
    • 30 hours per week, provide 5 hours per month for 8 months.
    • 24 hours per week, provide 4 hours per month for 10 months.
    • 20 hours per week, provide 4 hours per month for 9 months.
    • 16 hours per week, provide 3 hour per month for 10 months.
    • 10 hours per week, provide 2 hours per month for 10 months.
    • 5 hours per week, provide 1 hour per month for 10 months.
  • Employers that provide employees with a lump sum of 40 hours or more of sick leave or paid time off at the beginning of the year do not need to track accrual or allow rollover.
  • The final regulations allow employers to maintain separate use policies for paid time off in excess of 40 hours if they allow employees to designate which time is taken as earned sick time.

Recordkeeping

  • The final regulations make clear that employers providing time off to employees under a paid time off, vacation or other policy that complies with the law are not required to track and keep a separate record on accrual and use of earned sick time, except employers must keep records of the time designated as earned sick time where the employer chooses to maintain separate use policies as described above.

The Safe Harbor for July 1, 2015 – December 31, 2015

  • Employers with a policy in existence as of May 1, 2015 that provides paid time off or paid sick leave will be deemed in compliance with the law until January 1, 2016, provided that:

    • Full-time employees have the right to earn and use at least 30 hours of paid time off/paid sick leave between January 1, 2015 and December 31, 2015;
    • On and after July 1, 2015, all employees not previously covered by the policy, including part-time employees, seasonal employees, temporary employees, new employees, and per diem employees must either: (i) accrue paid time off at the same rate as covered full-time employees; or (ii) if the policy provides lump-sum allocations, receive a prorated lump-sum allocation of paid time off/paid sick leave. Such lump sums may be halved for the calendar year 2015 for employees who receive coverage as of July 1, 2015, and proportionately reduced for employees hired after July 1, 2015 and/or be proportionate for part-time employees; and
    • The 30 hours of paid time off/paid sick leave or the lesser amounts described above must be (i) job-protected and subject the law's anti-retaliation provisions; (ii) available for the allowed purposes of the leave under the law; and (iii) available to the employee after January 1, 2016 if unused during the Transition Year unless the policy provides lump sum allocations that make rollover unnecessary.
  • By January 1, 2016, all employers operating under the safe harbor provision must adjust their policies providing paid time off/paid sick leave to conform with the law.

For more information on the Sick Leave Law, see our post here.

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.

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