Maryland General Assembly Overrides Governor's Veto on Earned Sick and Safe Leave - Now What?

The Maryland General Assembly voted last week to override Governor Hogan’s veto of HB1 – the Maryland Working Families Act (“Act”).  This law, which provides job-protected earned sick and safe leave for employees, will take effect on February 11, 2018.  News reports suggest that there may be legislative action to delay the effective date of this law, and that amendments may also be made to it, but no final announcements have been made.  For now, here is a general summary of rights and requirements; we will provide updated information when available.

This law affects all Maryland employers (including state and local government employers).  Under this law, eligible employees will accrue paid or unpaid leave based on employer size.  Employees who work for employers with 14 or fewer employees accrue unpaid leave, while employees working for employers with 15 or more employees accrue paid leave.  The size of the employer is calculated based on the average monthly number of employees employed by the employer in the preceding year (full-time, part-time, temporary, and seasonal). 

Who is covered?  Coverage is complicated.  In general, the law applies to most, but not all, employees.  Employees who are not covered include:  those who work less than 12 hours per week, and some who work on an as-needed basis; some construction workers (however, workers in the occupations of janitor, building cleaner, building security officer, concierge, doorperson, handyperson, or building superintendent are included); certain independent contractors and real estate salespeople; workers who were less than 18 years old at the beginning of the year; certain agricultural workers; and some categories of temporary workers.

How does it accrue?  Leave will accrue at the rate of 1 hour per 30 hours worked, starting at hire.  Exempt employee accrual is based on a 40-hour work week.  Leave accrual may be capped at a maximum of 40 hours per year, and employers are not required to allow employees to use more than 64 hours per year.  Employers may grant it as a lump sum at the start of the calendar year rather than accruing over time.  Employees have the right to carry over up to 40 hours from one year to the next.  Employers may prevent employees from using leave during the first 106 days of employment.  The law permits employees to trade shifts or make up time within the same or following payroll period to avoid using accrued leave.  Special rules apply to tipped employees. 

What’s it for?  Leave may be used for medical or preventive care for employees and their family due to illness or injury, and for absences related to domestic violence, sexual assault, and stalking, such as absences to obtain legal support, victim’s support, or to relocate, whether the victim is the employee or a family member.  In addition, leave may be used for maternity or paternity leave.  

Who is a family member?  The law covers a broad range of family members, specifically – the employee’s biological, adopted, foster, or stepchild of employee; a child for whom the employee has legal or physical custody; a child for whom the employee stands in loco parentis, regardless of the child’s age (e.g., has legal standing to make decisions relating to the child); biological parent, adoptive parent, foster parent, or stepparent of employee or employee’s spouse; legal guardian of the employee; an individual who acted as a parent or stood in loco parentis to the employee or employee’s spouse when the employee or employee’s spouse was a minor; the employee’s spouse; a biological, adoptive, foster or step-grandparent of the employee; a biological, adopted, foster or step-grandchild of the employee; and a biological, adoptive, foster, or step-sibling of the employee.

What about notice and certification of use?  Employers may require 7 days’ notice if the need for leave is foreseeable (otherwise, regular call out procedures apply), and may deny leave if notice is not given and the absence will cause a disruption.  Certain employers who are licensed to provide care to developmentally disabled or mentally ill individuals may deny leave if it would impact care.   If leave is for 2 or more consecutive days, the employer may require documentation that it was used for an appropriate purpose, but cannot require the disclosure of medical details or violate certain other privacy rights.

Are there notice and record-keeping requirements?  Employers must provide written notice to employees of their rights under the laws, and the government will be issuing a model notice for that purpose.  In addition, employers must keep records of accrual and use for three years, and must give employees a written statement of the leave balance on each pay stub or through an online system where employees can access accrual record.

What does “job protected” mean?    Employers may not take any adverse action against, or retaliate or discriminate against, an employee who has exercised rights under the new law, or interfere with the employee’s attempt to exercise rights.  Furthermore, use of accrued leave cannot be counted against employees for purposes of corrective action.  Penalties and remedies apply. 

What happens at termination?  The law does not require employers to pay accrued, unused leave at termination.  The employees may be entitled to reinstatement of the leave bank if reemployed within 37 weeks of termination.  Employees who go to work for a successor employer may be entitled to take their leave bank with them. 

Does your company have to create a new policy?  While this law does not require employers to modify existing sick leave or PTO policies (or create separate policies if those types of policies are already in place), grandfathered policies must permit the employee to accrue paid (or unpaid) leave at the same rate (or greater) that is required by the law, allow leave to be used for all of the reasons permitted under the law, and meet the other minimum requirements of the law. 

When does it take effect?  Until further notice, employers should plan for an effective date of February 11, 2018. 

This alert only provides a general overview of this new law because we do not yet know to what extent it will be modified.   As you can see, it is complex.  Employers should take steps to review the full spectrum of legal requirements against existing policies to ensure that they are ready to comply when the new law takes effect.   

Finally, this new law is similar, but not identical to, laws currently in effect in Montgomery County and D.C., and federal Executive Order 13706, which is applicable to certain federal government contractors.  Unfortunately, the specifics vary from law to law – from the definition of family member to accrual rates to permitted uses and more.   Employers who are covered by one or more of these laws should take care to ensure that they are meeting the requirements of each law that applies.

Melissa Jones, chair of the Labor and Employment Group, counsels companies on employment, labor, and immigration issues.  For more information about Maryland’s earned sick and safe leave law and other employment concerns, please contact her at 410.752.9765 or via email.

This information has been prepared by Tydings for informational purposes only and does not constitute legal advice.