Maryland's Paid Sick Leave Mandate Set to Take Effect This Month

by Holland & Knight LLP
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HIGHLIGHTS:

  • The Maryland Healthy Working Families Act is scheduled to go into effect on Feb. 11, 2018, making Maryland the ninth state to mandate paid sick leave for private employers.
  • The Act requires that Maryland employers with 15 or more employees provide employees up to five days (40 hours) of paid sick leave annually. Maryland employers with less than 15 employees must still provide employees with unpaid sick leave.
  • The Act covers most part-time and temporary employees, but there are exceptions for agricultural workers, those working in healthcare on an "as-needed" basis, certain unionized workers and workers who regularly work fewer than 12 hours per week.

The Maryland Healthy Working Families Act is scheduled to go into effect on Feb. 11, 2018.

Legislative History

Last year, Maryland Gov. Larry Hogan vetoed a statewide paid sick leave bill that had passed both chambers with wide majorities. At the time, most observers agreed it was only a matter of time until the General Assembly voted to override the veto. The General Assembly reconvened in January 2018 and did exactly that, making Maryland the ninth state to mandate paid sick leave for private employers.

Coverage

The Maryland Healthy Working Families Act requires that Maryland employers with 15 or more employees provide employees up to five days (40 hours) of paid sick leave annually. Maryland employers with less than 15 employees must still provide employees with unpaid sick leave.

While the Act covers most part-time and temporary employees, it does not apply to workers who regularly work fewer than 12 hours per week. There are also exceptions for agricultural workers, those working in healthcare on an "as-needed" basis and certain unionized workers.

Accrual and Carryover

Employees must accrue one hour of leave for every 30 hours worked up to an annual cap of 40 hours. Employers must allow carryover – permitting employees to bring up to 40 hours of accrued but unused sick leave into each new year. Employers may also "frontload" the leave accrual by providing all 40 hours at the beginning of each year. Employers choosing the frontload method need not allow carryover.

Employers may also impose a "floating" cap limiting an employee's total accrual bank to 64 hours at any time. Employers may suspend an employee's leave accrual once the employee hits the 64-hour limit, and must reinstate accrual only after the employee has reduced his or her available bank below 64 hours.

Additionally, employers may limit use of accrued paid sick leave to 64 hours in a given year. The Act does not require employers to pay out accrued but unused time on termination.

Using Leave

Employees may use accrued leave for:

  • their own mental or physical healthcare, or similar care for a family member
  • maternity or paternity leave
  • absences necessary because of domestic violence, sexual assault or stalking committed against the employee or a family member

Employers may require employees to work for 106 calendar days before using accrued paid sick leave. Employers may also require employees to provide seven days of advance notice when leave is foreseeable. When leave is unforeseeable, an employee need only to provide notice as soon as practicable. Regardless of the notice obligation, employers may require that employees comply with the employer's established procedures for requesting leave, as long as the process does not interfere with the employee's ability to take leave.

One of the more perplexing aspects of the Act is the minimum increment of leave that employers can require employees to use. According to the Act, employers must account for and allow employees to use leave in the smallest increment that the employer's payroll system will allow. But it also says that "an employer may require an employee to take earned sick and safe leave in an increment not exceeding 4 hours." Earlier drafts of the legislation contained different language clearly setting out the four-hour limit as a ceiling, but the enacted version is more ambiguous. Employers desiring to impose minimum increments above the smallest units their payroll systems allow should stay tuned for future administrative guidance from the Maryland Department of Labor, Licensing and Regulation (DLLR).

Pre-emption

Maryland is one of the few states to both require paid sick leave and to pre-empt the authority of local governments to pass additional paid leave requirements. However, this pre-emption provision apples only to local laws enacted on or after Jan. 1, 2017. This carve-out leaves in place a pre-existing paid sick leave law in Montgomery County, while pre-empting a more recent ordinance in Prince George's County. Employers in Montgomery County must comply with both the local law and the new statewide requirements.

Notice to Employees

Maryland employers are responsible for providing employees with notice of their rights under the Act, and for reporting to employees their accrued leave balance each pay period. The DLLR is expected to issue a model notice for the use of employers.

Employers must also keep records of paid leave that is accrued and used by each employee, and maintain those records for three years.

Recommended Next Steps

Although it is possible that additional legislation may delay the Act, Maryland employers should review paid sick leave policies and practices, and consult with employment law counsel regarding potential changes necessary to achieve compliance.

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