United States: Myriad Sick Leave Laws Create Headaches For Employers

Are sick leave laws making you want to call in sick?

Mandatory sick leave policies are the latest hot button HR issue. Grassroots campaigns have been successful in getting sick leave laws passed, and nowhere more than in New Jersey. As of June 30, New Jersey had no fewer than nine municipalities with sick leave laws in effect: Bloomfield, East Orange, Irvington, Jersey City, Montclair, Newark, Passaic, Paterson and Trenton. Under each of these laws, sick time accrues at the rate of one hour of sick leave for every 30 hours worked.

That is where the similarities end. The differences in the laws may seem minor, but they cause major headaches for employers.

For example, in all but one of the nine municipalities, the laws do not apply to employees who are covered by a collective bargaining agreement (CBA). However, Jersey City's law is the exception.

Again, this sounds like a small thing. But in the real world, it's a mess. Consider the following scenario:

A Wayne, New Jersey, trucking company has 30 drivers who are union members. The CBA does not expire for three years. The drivers cover routes in Northern New Jersey and New York City, but they do not have the same routes every day.

The last union negotiations were contentious as the company was in dire financial straits and could not afford to raise the $18 hourly rate. In the prior CBA, employees were entitled to two weeks of vacation and one week of sick time. Unused vacation time was paid to employees at the end of the year; sick time was not. Pursuant to the current CBA, the parties agreed to provide employees with three weeks' vacation and no sick time, but employees may use vacation time for their own illnesses and unused vacation time was to be paid out at the end of the calendar year. If an employee did not use the extra week of vacation, it was akin to receiving a salary increase. Since the contract was negotiated, the company's financial position has not improved and costs need to be cut by 10 percent.

Some drivers make deliveries several times per week to Jersey City. Drivers spend between 30 and 90 minutes unloading the truck. The company's trucks do not have GPS tracking. Drivers simply manually log the deliveries by noting the delivery address and the time arrived at each location.

What are the company's obligations with regard to the Jersey City's sick leave law?

If your first impulse was to say, "They don't have one because the trucking company is not physically located in Jersey City," you are be wrong. Jersey City's law applies to any employee who works 80 hours per year in Jersey City, regardless of where the employer is physically located.

If your second reaction was to think that the company does not have to do anything because it provides more than 40 hours of vacation time that can be used for sick time, that is also wrong. Under the Jersey City ordinance, an employee must be able to use sick leave for the employee's own illness, the illness of a family member, or when the employee's workplace is closed (or child's school is closed) due to a public health emergency. The CBA states that the only acceptable uses of vacation time are for pre-approved vacation or the employee's own illness. Since the company's policy does not allow for the use of paid time off under the same conditions as the law, the company will have to provide additional leave.

What if a driver merely drives through Jersey City on the way to Hoboken; is that driver "working" in Jersey City? The answer to that question is no. However, whenever a driver makes a delivery to Jersey City, that constitutes working in Jersey City. In that case, working time is measured from the minute the driver enters Jersey City until the driver leaves the city. In order to track accrual of sick time, the company has to either blindly trust the drivers' versions of how long they were in Jersey City or invest in expensive equipment that will electronically monitor the time the employee is actually in Jersey City.

Forgetting for a moment the record-keeping nightmare these laws create for employers, in the above scenario, the fact that this law applies to the union drivers greatly increases the company's costs. Assume that 15 drivers work at least 80 hours per year in Jersey City and that they accrue the maximum 40 hours of sick time each year. The CBA negotiations were premised on the idea that most employees would use two weeks of vacation and cash out the remaining week at the end of the year. There are now 15 employees with essentially an extra week of salary if the drivers maximize use of their sick time. The company is also paying these employees one week of sick time and annual salary costs have increased by nearly $22,000. The only choice for cutting costs may now be a lay-off.

In addition to these difficulties, the company must manage the employee relations issues that will arise as half of the workforce receives a greater benefit simply because they make deliveries to Jersey City. It is not hard to imagine that there may be significant conflict between employees as they jockey for the Jersey City routes.

Even if the drivers were not members of the union, the same employee relations issues remain as employees fight over the routes that included any of these municipalities. Record keeping is further complicated by the fact that New York City also has a sick leave ordinance. Unlike New Jersey's sick leave, New York City's law provides that earned sick time may only be used for work scheduled in New York City. Assume that a driver has 40 hours of sick time accrued under the Jersey City and the New York City ordinances and calls in sick. The driver is not scheduled to make a delivery in New York City that day. The driver now has 32 hours of sick time available in New Jersey, but still has 40 hours of sick time available in New York City.

New Jersey employers are not the only ones trying to comply with multiple municipal laws. In Washington state, Seattle and Tacoma have passed sick leave ordinances. Oregon recently passed a sick leave law that made it the fourth state with such a law, joining the ranks of California, Connecticut and Massachusetts. The good news is that it preempts the Portland and Eugene sick leave laws.

Unlucky California employers must comply with the new state law and with similar laws passed by Oakland, San Francisco, San Diego and Emeryville. The state law specifically notes that it does not preempt any laws that provide greater benefits. Therefore, employers subject to the San Francisco and San Diego laws must provide greater benefits required under those city's ordinances, currently as much as 72 hours.

Some states have recognized that having multiple laws not only creates confusion for employers, but also creates a competitive disadvantage. Eleven states – Arizona, Florida, Georgia, Indiana, Kansas, Louisiana, Mississippi, North Carolina, Oklahoma, Tennessee and Wisconsin—have passed laws that prohibit local governments from passing sick leave laws. Employers in every other state face the possibility of having to comply with a patchwork.

Legislation has been introduced in the New Jersey Assembly and Senate to prohibit municipalities from enacting laws that affect terms and conditions of employment, which would include sick leave laws. In the meantime, the best advice I can give employers is to make sure that sick leave policies are carefully reviewed, and to invest in a large bottle of aspirin.

Originally published by Corporate Counsel.

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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