On January 12, 2018, the Maryland General Assembly voted to override Governor Larry Hogan’s veto of the Healthy Working Families Act (House Bill 1 in 2017’s General Assembly). As a result of the legislature’s action, the Healthy Working Families Act (the “Act”) will go into effect on February 11, 2018. In preparation, Maryland employers should begin reviewing and, if necessary, updating (or creating) their paid leave policies in order to comply with the law’s mandate.
Below is a summary of the key provisions of the Act in its current form.
Employer Coverage
All Maryland employers are covered by the Act, however, employers with fewer than 15 employees need only provide unpaid leave (see below for more information). The number of employees is determined by calculating the average monthly employee count (full-time, part-time, temporary, and seasonal) for the prior 12 month period.
Employee Coverage
Most employees are covered under the Act. To be eligible for sick/safe leave, an employee must regularly work 12 or more hours per week. The Act does not define what it means to “regularly work,” however.
The act provides exceptions for the following:
- Independent contractors.
- Licensed real estate salespersons and licensed associate real estate brokers affiliated with a licensed real estate broker under a written agreement, compensated on a commission basis, and qualifying as an independent contractor for federal tax purposes.
- Individuals who are under 18 before the beginning of the year.
- Individuals engaged in an agricultural operation as defined in Md. Code Ann., Courts & Jud. Proc. § 5-403(a).
- Individuals working on an as-needed basis in the health or human services industry who can reject or accept a shift offered by an employer, are not guaranteed to be called to work, and are not employed by a temporary staffing agency.
- Individuals who are employed by an employment agency to provide part-time or temporary services.
- Temporary staffing agency employees, if the agency does not have day-to-day control over work assignments and supervision.
- Individuals in the construction industry who are covered by a collective bargaining agreement in which the Act’s requirements “are expressly waived in clear and unambiguous terms.” This exception does not cover janitors, building cleaners, building security officers, concierges, doorpersons, handypersons, or building superintendents.
In addition, the legislation does not “have any effect on or application to any bona fide collective bargaining agreement entered into 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.”
Sick and Safe Leave Uses
Sick and safe leave may be used:
- To care for or treat an employee’s mental or physical illness, injury, or condition.
- To obtain preventive medical care for an employee or employee’s family member.
- To care for a family member* with a mental or physical illness, injury, or condition.
- For maternity/paternity leave.
- In domestic violence, sexual assault, and stalking situations against the employee or the employee’s family member:
- Medical or mental health attention;
- Services from a victim services organization;
- Legal services or proceedings;
- During the time the employee has temporarily relocated.
Leave may be used in the smallest increment the employer’s payroll system uses. Further, an employer may require employees to take sick/safe leave in up to four (4) hour increments.
*Family member includes:
- Child (biological, adopted, foster, stepchild, child for whom the employee has legal or physical custody or guardianship, and a child for whom the employee stands in loco parentis).
- Parent (biological, adoptive, foster, and stepparent of the employee or the employee’s spouse, legal guardian, and an individual who acted as a parent or stood in loco parentis to the employee or employee’s spouse).
- Grandparent (biological, adopted, foster, or step grandparent of the employee).
- Grandchild (biological, adopted, foster, or step grandchild of the employee).
- Sibling (biological, adopted, foster, step sibling of the employee).
Sick Leave Accrual and Tracking
The law includes a number of provisions governing sick and safe leave accrual and tracking.
Sick and safe leave must be paid at the employees’ normal wage rate. Sick/safe leave for tipped employees, however, must be paid at the minimum wage rate.
Employees accrue leave at a rate of at least one (1) hour for every 30 hours worked. An employee who is exempt from the FLSA’s overtime requirements is presumed to work 40 hours each workweek.
At the beginning of each year, an employer may award employees the full amount of sick/safe leave that employees would earn over the course of the year rather than having employees accrue the leave throughout the year.
An employer may cap the amount of sick/safe leave an employee can earn in a year at 40 hours (i.e., five 8-hour days), and an employer may limit an employee to using 64 hours of earned sick/safe leave each year.
An employer may cap the amount of sick/safe leave an employee may accrue at 64 hours. Employees may carry over sick/safe leave balances from year to year, however, employers may cap the amount of hours that employees can carry over to 40 hours. If an employer awards sick/safe leave at the beginning of each year, the employer is not required to permit employees to carry over unused leave from year to year. Further, employers are not required to permit an employee to carry over leave if the employee is employed pursuant to a one-year, non-renewable grant.
Employers are not required to permit employees to use sick/safe leave during the first 106 calendar days the employee works for the employer.
Employers are not required to permit employees to accrue sick/safe leave during:
- A 2-week period in which the employee worked fewer than 24 total hours;
- A 1-week period in which the employee worked fewer than 24 hours in the current week and the immediately preceding pay period; or
- A pay period in which the employee is paid twice per month regardless of the number of weeks in a pay period and the employee worked fewer than 26 hours in that pay period.
If an employer rehires an employee within 37 weeks after the employee left the employer, the employer must reinstate any unused sick/safe leave the employee had when he or she left unless the employer voluntarily paid out to the employee her unused sick/safe leave.
Employee Notice and Verification
Where the need to use sick/safe leave is foreseeable, employers may require employees to provide reasonable advance notice of no more than seven (7) days before the leave would begin.
Where the need to use sick/safe leave is not foreseeable, employees must provide notice to the employer “as soon as practicable” and comply with the employer’s notice requirements for requesting and/or reporting leave, so long as those requirements do not interfere with the employee’s ability to use sick/safe leave.
An employer may require an employee using sick/safe leave to provide verification that the use was appropriate if: (1) the leave was used for more than two (2) consecutive scheduled shifts; or (2) the employee used leave between his first 107 and 120 calendar days (inclusive) of employment and the employee agreed to provide verification at the time he was hired.
An employer may deny a subsequent leave request to an employee who did not provide verification permitted by the Act for the same reason as an earlier request.
Employer Notice and Record Obligations
Employers must notify employees that they are entitled to sick/safe leave. The notice must explain how leave is accrued; permitted uses; that adverse action for use of sick/safe leave is prohibited; that the Act prohibits an employee making a complaint, bringing an action, or testifying in an action in bad faith; and information regarding how an employee may report an alleged violation of the Act.
Employers must keep and maintain employee sick/safe leave records (covering accrual and use) for at least three (3) years.
Paystubs
Employers must provide, in writing, at each regular pay date, a statement regarding the amount of sick/safe leave available. This requirement can be accomplished via an online HR portal accessible to employees.
Denying Leave Requests
An employer may deny a leave request if the employee does not provide proper notice and the employee’s absence will cause a disruption to the employer.
Separation of Employment
An employer is not required to compensate employees for unused earned sick and safe leave upon separation of employment. An employer may, however, agree to do so.
Impact on Existing Leave Policies
An employer is not required to modify an existing paid policy if: (1) the existing policy permits an employee to accrue and use leave under terms and conditions that are at least equivalent to the earned sick and safe leave provided for under the legislation; or (2) the paid leave policy does not reduce employee compensation for an absence due to sick or safe leave. Existing paid leave is defined to include vacation days, sick days, short-term disability benefits, floating holidays, parental leave, and “other paid time off that may be used under the terms and conditions as paid sick and safe leave.”
Enforcement and Prohibitions
An employer may not take adverse action against employees (including discharge, demotion, threats of either, or any other retaliatory action effecting the terms and conditions of employment) if an employee has in good faith exercised his or her sick/safe leave rights. Employers are also prohibited from interfering with, restraining, or denying an employee’s exercise of rights under the Act.
An employer may not count an employee’s use of sick/safe leave against an employee under an absence control policy. An employer may adopt and enforce a policy prohibiting “the improper use of earned sick and safe leave.” Employers, therefore, may have a policy prohibiting a pattern of abuse of earned sick and safe leave.
An employee can file a written complaint of violation with DLLR. DLLR is tasked with investigated complaints and attempting to resolve disputes through mediation. If DLLR finds a violation and cannot reach an informal resolution, the Act provides for a payment of leave and economic damages. DLLR may also order the payment of treble damages (up to three times the value of an employee’s hourly wage) and a civil penalty of up to $1,000 for each violation. An employer’s failure to comply with a DLLR order may result in a court action and civil penalties. Treble damages (three times the value of the unpaid leave), punitive damages, attorneys’ fees and costs, and injunctive relief are available in a civil action under the Act.