Paid Sick Leave Trends: States and Localities Step In Where Federal Law Falls Short

Kelley Drye & Warren LLP
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Paid sick and family leave is expanding. The ongoing COVID-19 pandemic, and the special pressures it has placed on parents and families, has renewed the push for mandated paid sick and family leave. Congress’ decision not to expand the Families First Coronavirus Response Act (FFCRA) in the latest relief package, has spurred state and local governments to renew their efforts to provide COVID-19 paid sick leave and, in some cases, permanent paid sick leave.

Also, is it safe to assume the federal government is not planning to pass a paid sick leave mandate? After all, the Federal Employee Paid Leave Act, which passed in 2019, was just expanded in October 2020. The answer is no, because all signs indicate that a paid federal leave mandate for private employers will be on the horizon during the Biden administration. But until that time comes, employers with a national or multi-state presence will need to comply with a hodgepodge of state and local laws.

FEDERAL COVID-19 PAID SICK LEAVE

As we previously covered, the FFCRA expired on December 31, 2020. The FFCRA required employers with under 500 employees to provide short-term paid sick leave for COVID-19 related reasons. The Act also permitted employers to seek reimbursement for any qualifying leave through tax credits.

Despite rising case numbers, Congress declined to extend the FFCRA into the 2021. Rather, Congress opted to permit employers who voluntarily provided leave to continue to take advantage of the tax credits until the end of March 2021.

The most recent stimulus package, the American Rescue Plan, extended the deadline for employers to claim tax credits to September 30, 2021.

STATE AND LOCAL COVID-19 PAID SICK LEAVE

As a result of the gaps left by the federal response, state and local law-makers have stepped in to legislate paid sick leave for workers. While we will focus on California and New York, other states and localities have also adopted new COVID-19 leave laws or expanded or supplemented existing paid sick leave laws, such as Arizona, Colorado, Connecticut, Chicago, Illinois, Cook County, Illinois, Massachusetts, Michigan, Duluth, Minnesota, Minneapolis, Minnesota, St. Paul, Minnesota, Nevada, New Jersey, Oregon, Philadelphia, Pennsylvania, Pittsburgh, Pennsylvania, Rhode Island, Vermont, Washington, and Washington D.C.

California – On March 19th, Governor Gavin Newsom of California signed legislation extending the state’s COVID-19 paid leave though September 30, 2021. The 2021 COVID-19 Supplemental Paid Sick Leave entitlement gives eligible workers up to 80 hours of COVID-19-related paid leave, including to care for a family member. Non-exempt employees are entitled to the highest of the following for each hour of leave: (i) the regular rate of pay for the pay period in which leave was taken, (ii) the average pay over the last 90 days, (iii) the state minimum wage, or (iv) the local minimum wage. The pay, however, is not to exceed $511 per day or $5,110 in total. The law applies to all employers with more than 25 employees, including those with collective bargaining agreements. Covered employees include workers who are “unable to work or telework.” Significantly, the new paid sick leave mandate applies retroactively back to January 1, 2021.

Several localities in California have also adopted their own COVID-19 sick leave laws during the pandemic, including Los Angeles and Oakland.

New York – We summarized New York’s COVID-19 sick leave law in a prior blog post. The New York law, notably, has no expiration date.

OTHER STATE AND LOCAL PAID SICK LEAVE LAWS

The pandemic has also energized states to pass laws providing for general paid sick leave, not limited to COVID-related illnesses. Unlike the COVID-19-related sick leave laws, these laws are not set to expire and have a wider application.

New Mexico – Most recently, the New Mexico legislature sent H.B. 20 to Governor Michelle Lujan Grisham, who has indicated she would sign the bill into the law. H.B. 20 would allow workers to earn at least one hour of sick time per 30 hours worked. Employers would be required to permit employees to use at least 64 hours of sick leave every 12 months. If enacted, the law would go into effect July 1, 2022. If H.B. 20 is signed into law, New Mexico would join a growing number of states providing for permanent paid sick leave. Currently, 14 states and Washington D.C. have paid sick leave laws.

New York – As we blogged about last April, New York State passed a mandatory sick leave law requiring employers with more than four employees or more than $1 million in net income to provide eligible employees with paid sick leave and for employers with four or fewer employees and a net income of $1 million or less to provide unpaid sick leave. Within New York State, Westchester County and New York City also have their own paid sick leave statutes.

Colorado – Beginning January 1, 2021, Colorado’s Healthy Families and Workplaces Act (HFWA) requires employers with 16 or more employees to provide full-time employees with up to 48 hours of paid sick leave per year. Beginning in 2022, the same mandate will apply to employers of all sizes. The HFWA also requires employers to provide up to 80 hours of paid sick leave in the event a public health emergency is declared.

Other States and Cities – Additionally, several other states and localities’ previously-enacted sick leave laws went into effect last year. Nevada’s paid leave law, Duluth, Minnesota’s Sick and Safe Time Ordinance, and Pittsburgh, Pennsylvania’s Paid Sick Days Act went into effect. Under Nevada’s leave law, which applies to employers with 50 or more employees, an eligible employee can accrue up to 40 hours of leave a year. Duluth’s law requires employers with at least five employees to permit employees to accrue up to 64 hours of leave a year. Pittsburgh’s Paid Sick Day’s Act requires employers with at least 15 employees to permit accrual of up to 40 hours of paid sick leave a year.

WHAT SHOULD EMPLOYERS DO?

There has never been any federal legislation to require paid leave for all employees—period! As many readers know, the Family Medical Leave Act (FMLA), passed in 1993, requires some employers to provide up to 12 weeks of unpaid family leave to employees who meet certain eligibility requirements. Another piece of federal legislation, the Federal Employee Paid Leave Act, which was recently revised to include paid leave for all federal employees, still only covers federal employees.

That being said, the momentum for a permanent federal paid sick leave law continues to grow, and the Biden Administration has signaled its support for such a bill. It is likely that a federal paid sick leave law is in our future. But until such a time, employers must continue to comply will the myriad of applicable state and local paid sick leave laws.

So what should employers with a national or multi-state workforce do? As we see it, there are two possible solutions: to tailor a separate sick leave policy for each business state or city; or, to create a companywide policy that complies with all laws.

For many clients, we recommend the latter solution. Having one uniform policy that complies with the laws of all states where the employer has employees (which really means complying with the most stringent state or local law) is generally the best choice. Yes, this may require an employer to provide paid sick leave in states where it is not mandated.  However, the simpler administration of one uniform policy outweighs the “cost” of providing such leave universally. Plus, it makes for good employee relations. Needless to say, employees are generally more satisfied, and have less to complain about, when everyone is being treated in a consistent manner and getting the same benefits.

Navigating the patchwork of ever-changing federal, state, and local sick leave laws can be challenging. Employers should keep abreast of any new laws or guidance and consult with employment counsel to ensure their sick leave polices comply with all applicable rules. We will continue to monitor developments in this area. Do not hesitate to reach out to your Kelley Drye contact, if you have any questions.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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