United States: Maryland Becomes The Latest State To Require Paid Sick And Safe Leave

Last Updated: January 18 2018
Article by S. Libby Henninger, Eunju Park and Steven Kaplan

On January 12, 2018, the Maryland legislature overrode Governor Larry Hogan's (R) 2017 veto of the Healthy Working Families Act, Maryland HB 1 ("the Act"), enacting legislation that requires Maryland businesses to provide covered employees with sick and safe leave. The Act says it preempts local sick and safe leave laws that were enacted on or after January 1, 2017, which may include the Prince George's County law.1 However, Montgomery County's law will remain in effect.2 The Act is scheduled to become effective on February 11, 2018.

Covered Employers and Employees

The Act provides that all Maryland employers that employ 15 or more employees must provide paid sick and safe leave, whereas employers with 14 or fewer employees must provide unpaid leave. Business size is determined by calculating the average monthly number of employees employed during the immediately preceding year. All employees are counted, including full-time, part-time, temporary, and seasonal employees.

The Act does not define who is a covered employee. Rather, it defines who is not covered: 1) independent contractors; 2) real estate salespeople or associate real estate brokers; 3) minors; 4) agricultural employees; 5) individuals employed by a temporary services agency to provide temporary staffing services to another person if the agency does not have day-to-day control over the work assignments and supervision of the individual while providing temporary staffing services; 6) individuals directly employed by an employment agency to provide part-time or temporary services to another person; 7) individuals who regularly work fewer than 12 hours a week; 8) individuals who are called to work by the employer on an as-needed basis in a health or human services industry, can reject or accept the shift offered by the employer, are not guaranteed to be called on to work by the employer, and are not employed by a temporary staffing agency.

For employers with unionized workforces, the Act does not add to or alter the provisions of any bona fide collective bargaining agreement (CBA) entered into on or 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. The Act also does not apply to any employee employed in the construction industry who is covered by a bona fide CBA in which the Act's requirements are expressly waived in clear and unambiguous terms. Note, however, that such employees in the construction industry do not include janitors, building cleaners, building security officers, concierges, doorpersons, handypersons, or building superintendents.

Covered Uses

Accrued leave can be used for the following "sick" time purposes: care for or treatment of an employee or family member's mental or physical illness, injury, or condition; or preventive medical care for an employee or family member. Leave can also be used for "safe" time purposes due to domestic violence, sexual assault, or stalking committed against the employee or family member, which may include medical or mental health attention; services from a victim services organization; legal services or proceedings; or time taken to temporarily relocate for safety reasons. Leave can also be used for maternity or paternity leave.

Under the Act, "family members," generally speaking, include children, grandchildren, grandparents, parents (including in-laws), siblings, and spouses.

Accrual, Caps and Carryover

If an employer's existing paid leave policy—e.g., vacation, sick days, short-term disability, floating holidays, parental leave, or other paid time off ("PTO")—permits employees to access and accrue leave at the same or greater rate as under the Act, and leave can be used for the same purposes, additional sick and safe leave need not be provided. Additional leave is also not required if under the policy an employee's pay is not reduced for a sick or safe leave absence.

Otherwise, statutory leave begins to accrue on February 11, 2018, or when employment begins, whichever is later. Covered employees accrue one leave hour for every 30 hours worked. Employees that are exempt from federal and state overtime requirements accrue leave based on a 40-hour workweek or their normal workweek, whichever involves fewer hours. However, covered employees do not accrue leave in the following situations: 1) during any two-week pay period in which they work fewer than 24 hours total; 2) during any one-week pay period in which they work fewer than a combined total of 24 hours in the current and immediately preceding pay period; or 3) during any pay period in which they are paid twice a month regardless of the number of weeks in a pay period, and worked fewer than 26 hours in the pay period.

Employees may accrue up to 40 leave hours each year and employers may limit total accrual to no more than 64 hours at any time. Employees may carry over up to 40 unused leave hours each year, subject to the 64 hour cap. Carryover is not required, however, if the employer awards the employee the full amount of required leave at the beginning of each year.

Requesting, Using, Documenting, and Paying for Leave

Employers are not required to allow employees to use leave during their first 106 calendar days of employment. No more than 64 leave hours can be used each year. An employee may take leave in the smallest increment that the employer's payroll system uses to account for absences or use of work time, but employers can require employees to take such leave in minimum increments of 4 hours or less.

If the need to use leave is foreseeable, an employer may require an employee to provide reasonable advance notice of not more than seven days before the date the anticipated leave would begin. If the need to use leave is unforeseeable, an employee must provide notice as soon as practicable. An employer may deny a leave request if an employee fails to provide required notice and the absence will cause a disruption to the employer. Certain employers that provide services to developmentally disabled or mentally ill individuals can deny leave requests if the need for leave is foreseeable, the employer cannot locate a suitable replacement after exercising reasonable efforts, and the absence will cause a disruption of service to at least one client.

Employers can require employees to verify that leave was taken for a covered purpose when leave is used for more than two consecutive scheduled shifts. Verification can also be required if leave is taken between the first 107 and 120 calendar days of employment, and at the time of hiring the employee agreed to provide verification under terms mutually agreed to by both parties. If an employee fails or refuses to provide required verification, an employer can deny a subsequent request to take statutory leave.

Leave must be paid at the same rate at which the employee normally earns wages. Tipped employees must be paid the full state minimum wage.

End-of-Employment Issues

Accrued unused leave need not be paid out when employment ends. If an employee was advanced leave to use before it was accrued, the balance owed may be deducted from final wages if the employee authorized the deduction when the leave was used.

If an employee is rehired by the same employer within 37 weeks after leaving employment, the employer must reinstate any accrued but unused leave unless the employer voluntarily paid out the leave when employment ended.

Employer Notice and Recordkeeping Obligations

Employers must notify employees of their rights under the law, which include: 1) how leave is accrued; 2) the purposes for which leave can be used; 3) prohibitions against adverse action against an employee for exercising a protected right; and 4) the ability to report an alleged violation to the state labor department or file a private lawsuit. The state labor department must create a poster and model notice that employers can use to comply with the notice requirement.

When wages are paid, an employer must provide the amount of leave that is available in writing. This may be accomplished via an online system through which employees can access their leave balances.

Employers must keep for at least three years a record of leave accrued and used by each employee. If an employer fails to keep accurate records, or allow the labor department access to such records, a rebuttable presumption of noncompliance applies.

Prohibitions

Interfering with, restraining, or denying the exercise of a protected right is prohibited, as is taking adverse action or discriminating against employees exercising such rights in good faith. Protections apply to an employee who mistakenly, but in good faith, alleges a violation of the law.

An absence control policy cannot count a use of sick and safe leave as an absence that may lead to or result in an adverse action.

An employer may not require that an employee search for or find replacement work when taking leave.

An employer that violates the law is guilty of a misdemeanor and, if convicted, will be subject to a fine not to exceed $1,000 per employee. Remedies for violations of the Act that employees may recover through private lawsuits include the value of leave, actual economic damages, three times of value of leave, punitive damages, reasonable attorneys' fees and costs, injunctive relief, and other appropriate relief.

Other Items

Other issues the law addresses include:

  • Definition of a "year"
  • The law's impact on workers' compensation benefits, more generous sick and safe leave laws, and federal law
  • Shift-trading and/or makeup hours generally and in the restaurant industry
  • Complying with an employer's customary notice procedure for unforeseeable absences
  • Disciplining employees for unlawful leave use
  • Carryover pertaining to non-profit employees working on a one-year grant
  • Obligations of successor employers
  • Employee prohibitions

What's Next

The Maryland Chamber of Commerce is attempting to negotiate a 60- or 90-day extension of the law's February 11, 2018 effective date. Additionally, a compromise measure introduced by the governor has been received in the General Assembly. However, at this time it is uncertain whether either effort will be enacted in whole or part. Accordingly, employers have only a few weeks to comply with the law.

Footnotes

1 For a more detailed discussion of the Prince George's County law, see Elizabeth Lalik and Sebastian Chilco, Prince George's County, Maryland Enacts Paid "Safe" Time Law, Littler Insight (Dec. 19, 2017).

2 For a more detailed discussion of the Montgomery County law, see S. Libby Henninger and Michael Childers, Montgomery County, Maryland Joins the Jurisdictions Requiring Paid Sick Leave, Alters the Employer Tip Credit, Littler Insight (July 7, 2015) and S. Libby Henninger and Eunju Park, Montgomery County, Maryland Sick and Safe Leave Law Amended to Permit Use for Birth, Adoption, Foster Care, and Bonding, Littler ASAP (Nov. 7, 2016).

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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Authors
S. Libby Henninger
Eunju Park
Steven Kaplan
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