Taking a common

sense approach

to paid sick time

now will prevent

compliance issues

in the future.

Jurisdictions that have a paid sick leave law

States1

Arizona (effective 7/1/17)

California

Connecticut

Illinois (effective 1/1/17)

Massachusetts

Oregon

Vermont

Washington (effective 1/1/18)

Cities1

California: Emeryville, Los Angeles, Oakland, San Diego, San Francisco, Santa Monica

Illinois: Chicago

New Jersey: Bloomfield, East Orange, Elizabeth, Irvington, Jersey City, Montclair, Morristown, Newark, New Brunswick, Passaic, Paterson, Plainfield, Trenton

New York: New York City

Pennsylvania: Philadelphia

Washington: Seattle, Spokane, Tacoma

Counties/Districts/Territories1

District of Columbia

Puerto Rico

Montgomery County (MD)

ABSENCE MANAGEMENT | MAY 2016

Common sense solutions for paid sick leave lawsMore and more states, cities, and counties are adopting paid sick leave laws. While these laws have a num-ber of significant differences, they have equally as many common elements. This document is intended to describe common elements in all of the statutes and provide common sense compliance solutions.

Potential situations and common sense solutionsThe following pages explore typical issues employers often confront and sensible solutions for managing them with the goal of being compliant. One potential solution is to adopt paid time off (PTO) policies that comply with the most stringent laws, particularly if you are a nationwide employer with employees working remotely in many localities. Alternatively, if your geographic footprint is more limited, you could consider adopting PTO policies that comply with laws where most of your employees are located and including a provision stipulating that if employees are located in a jurisdiction with laws containing more generous provisions, you will comply with those laws for any impacted employees. In any event, it is advisable to include language in your PTO policies saying that the policies are intended to comply with paid sick leave laws and that if there is a conflict between the policies and applicable legal requirements, you will follow the applicable laws.

Employer issue To consider Common sense compliance

A PTO policy that satisfies legal requirements

Many sick leave laws contain provisions indicating that if an employer’s paid time off (PTO) policy is of the correct duration, properly carries over to the next year, and is used in permissible ways, the employer will be deemed to be in compliance.

Some laws clearly state that paid vacation satisfies these requirements.

Adopt a PTO policy that complies with the strictest of the current legal requirements in the localities where you have employees. You should state in the policy that it is intended to comply with statutory and paid sick leave laws in applicable jurisdictions and that if the laws provide greater protections, you will follow the terms of the applicable laws. If you have only a few employees in the jurisdictions that have the most generous laws, you may want to consider adopting a PTO policy that complies with legal requirements where most of your employees are located and agreeing that with regard to those employees who live in jurisdictions with more generous laws, you will comply with the requirements of those laws for employees located there.

Size of employer Some laws apply only to employers of certain sizes, but others have no “size of employer” threshold. And usually, an organization’s total number of employees includes those who work outside of a given law’s jurisdiction. However, only those employees who work within the jurisdiction have rights under the law.

Adopt a PTO policy regardless of the size of the employer.

Purposes for which leave can be used

The various laws generally permit employees to use paid sick leave not only for their own personal illness but also to care for family members who are ill. The nature of the protected family relationship varies by jurisdiction. All laws include spouses and children. Many laws also include foster children; stepchildren; legal wards or children to whom the employee stands in loco parentis (“in the place of a parent”); stepparent; person who stood in loco parentis when the employee was a minor; domestic partners; grandchildren; grandparents; siblings; and spouses of grandparents and siblings.

One jurisdiction permits paid sick leave to be used to care for a guide dog, signal dog, or service dog of the worker or worker’s family member or designated partner. The laws also generally permit employees to use paid sick leave to attend preventive maintenance appointments (for either them or a family member). Many of the laws also permit the paid sick leave to be used by victims of domestic violence. And some laws permit paid sick leave to be used when a child’s school or child care provider is closed by order of a public official because of a public health emergency.

Adopt a PTO policy that permits employees to use their PTO for all of the various purposes covered by all of the laws.

Amounts of paid sick leave required

The amount of paid sick leave required by these laws varies from 24 hours (3 days) to 72 hours (9 days) (e.g., Seattle, Emeryville, Oakland, and San Francisco). Some laws specify that larger employers must provide more leave than smaller employers. In addition, employers in Seattle with 250 or more full-time workers who have a combined PTO policy that includes sick days must provide 108 hours (13.5 days) of paid sick leave.

As discussed above, adopt a PTO policy that complies with the strictest of the current legal requirements in the localities where you have employees. You should state in the policy that it is intended to comply with statutory and paid sick leave laws in applicable jurisdictions and that if applicable laws provide greater protections, you will follow the terms of the applicable laws. If you have only a few employees in the jurisdictions that have the most generous laws, you may consider adopting a PTO policy that complies with legal requirements where most of your employees are located and agreeing that with regard to those employees who live in jurisdictions with more generous laws, you will comply with the requirements of those laws for impacted employees.

Employer issue To consider Common sense compliance

Carry-over of unused, accrued paid sick leave

While the laws allow employees to carry over accrued but unused days, they also allow employers to limit an employee to only using the basic allotment in any given year. This limitation seems to suggest that the carry-over has no value. However, the carry-over is important for employers who do not allow employees to use all of their paid sick leave immediately, but rather require it to accrue throughout the year. The carry-over requirement protects employees who need paid sick leave early in the calendar year before it has accrued. If an employer permits employees to use at least the requisite statutory amount of PTO early in the year (regardless of whether it has accrued), then the carry-over rules should not prove insurmountable.

Adopt a PTO policy that allows for the maximum amount of time to carry forward as required under current legislation (108 days in Seattle) or that provides a smaller carry-over limitation (40 hours is common) but allows employees to take accrued time early in the year for legally allowed purposes.

Waiting period before paid sick leave can be used

Many of the laws stipulate that the paid sick leave must accrue at the rate of 1 hour per every 30 or 40 hours worked and that new employees cannot use and/or do not start to accrue any paid sick leave until they work a certain number of days (usually 90). The laws also indicate, however, that employers can allow an employee to use paid sick leave before it is accrued. Some laws state that if an employee can use paid sick leave right away, then no sick leave need carry over into the next year.

Adopt a PTO policy that allows employees to use the time immediately for statutorily protected purposes (even though it accrues throughout the year).

Medical certification limitations

The laws typically limit an employer’s ability to request medical certification or documentation for a statutorily protected absence. Most laws specify that employers may not seek medical documentation unless an absence has involved three consecutive days and even then may not require that the nature of the illness be explained.

Adopt a policy indicating that medical documentation will only be requested in accordance with any applicable leave laws, which would also include the FMLA.

Use of paid sick leave—increments

Some laws permit employees to use paid sick leave in increments that are smaller than 1 hour or the smallest increments permitted under the employer’s payroll system.

Adopt a policy that permits PTO to be used in the smallest payroll increment of the employer.

Re-hire provisions Some laws require employers to reinstate accrued paid sick leave if an employee is rehired within 6–12 months (depending on jurisdiction) if it was not paid out on termination of employment.

If you have a PTO policy that pays out for accrued but unused time, your policy may satisfy the requirements of these laws for rehire. As noted, generally, these laws do not require reinstatement if the employer paid out the accrued but unused time on termination of employment. If you do not pay out on termination, you should ensure that you track rehires for compliance with any rehire provisions.

Anti-retaliation provisions

All of the laws have provisions making it unlawful for an employer to retaliate against an employee for exercising his or her rights under these laws. Many specifically state that an employer may not discipline an employee for having taken paid sick leave that qualifies under the law.

The employer’s PTO policy should make clear that it will not retaliate against an employee who uses PTO for purposes protected by any applicable paid sick leave or other law (such as FMLA).

Notice requirements

All of the laws have notice requirements in which employers are required to notify employees of their rights under the laws, including the anti-retaliation provisions. Sometimes the notice requirement can be satisfied by a poster or general communication. In some jurisdictions, the notice must be individualized. In California, for example, employers are required to inform employees about paid sick leave hours available on their wage statement or in a separate written document.

Employers need to post statutorily required notices in each jurisdiction where they operate. Most jurisdictions have prepared notices that will be deemed compliant. Employers should also provide employees with accessible information about their accrued PTO.

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SLPC 27418 04/16 (exp. 04/18)GVASFL-5559j

1. Paid sick leave laws are also being considered in Alaska, Florida, Hawaii, Louisiana, Maryland, Michigan, Minnesota, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, South Dakota, Virginia, and West Virginia. In addition, the U.S. Department of Labor has issued a proposal that requires federal contractors and subcontractors to provide workers with seven days of paid sick leave on an annual basis.

The Healthy Families Act was introduced in the U.S. House of Representatives in 2015. In addition, the U.S. Department of Labor has issued a rule that requires federal contractors and subcontractors to provide workers with paid sick leave. Pittsburgh has a paid sick leave law that was invalidated by a state court judge. And a number of cities have limited-purpose paid sick leave laws that apply only to city contractors or that are for hotel, hospitality, and/or transportation workers only. Examples include New Orleans, LA (city contractors), Los Angeles, CA (hotel workers), Long Beach, CA (hotel workers), and Seatac, WA (hospitality and transportation only). Chicago has adopted a “nonbinding” sick leave referendum.

Note: If part-time or temporary employees are not covered by an employer’s PTO policy, special arrangements will need to be made to ensure compliance for such employees when they are protected by the jurisdiction’s paid sick leave law.

This communication is intended to provide general information only and should not be construed to be legal advice.

Sun Life Financial, its distributors, and its respective representatives do not provide tax, accounting, or legal advice. Any tax statements made are not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state, or local tax penalties. Clients should consult their own independent advisors about any tax, accounting, or legal statements.

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Sanctions for violations

Virtually all of the laws contain provisions allowing for assessment of a monetary penalty for violation of the laws and also permit damages to be awarded to employees whose rights have been violated. Some provide for penalties to be paid to the impacted employees (such as treble damages). Some also specify that an employee may be entitled to recover attorneys’ fees incurred in enforcing his or her rights. Some laws indicate that an employee can bring a private right of action for violation; others only permit an employee to complain to an administrative body that can then decide whether to bring suit. Consider adopting a common sense compliance approach now to avoid future issues.