What You Need To Know About Maryland's New Mandatory Sick Leave Law (with readiness checklist)

Recently, my friend and colleague, Amanda Haddaway, founder of HR Answerbox, sent me a great article with checklist that she wrote regarding Maryland's new mandatory sick leave law. The law applies to Maryland employers of all sizes, so it is a must read if you have employees. Enjoy!

Maryland’s Mandatory Sick Leave Employer Readiness Checklist

Maryland employers are required to start tracking the time off their employees earn when the law takes effect Feb. 11, but no regulations will be in place to guide businesses in complying. DLLR is working on this, but it may be months before the model notices, posters and employer compliance guidelines are finalized. Here’s what you need to do to prepare for the February 11 implementation deadline:

____ Determine your employee headcount.

All Maryland employers are covered by this Act, although those with under 15 employees will need to provide only unpaid time off for leave purposes. The number of employees is calculated by using the average monthly number of all employees (including full-time, part-time, temporary, and seasonal) employed during the immediately preceding 12 months.

Notably, the definition of “employer” includes “a person that acts directly or indirectly in the interest of another employer with an employee.” Based on similar definitions in other laws, this means that owners and managers can be sued individually under the Act.

____ Determine if any of your employees are exempt from the law.

All employees are covered except for the following: • Those who regularly work less than 12 hours a week for an employer. • Construction industry employees who are covered by a collective bargaining agreement that expressly waives the right to leave under this Act. (Such employees do not include janitors, cleaners, security officers, concierges, doorpersons, handypersons, or building superintendents – who are entitled to the benefits of the Act). • Those working on an as-needed basis in the health or human services industry, as long as they (1) can reject the shift offered by the employer, (2) are not guaranteed work by the employer, and (3) are not employed by a temporary staffing agency. In addition, the following persons are not considered “employees” and are therefore not entitled to leave under the Act: • Independent contractors, under the test set forth in Maryland unemployment insurance law (i.e. the “ABC” test). • Licensed real estate salespersons or brokers, or those affiliated with a licensed broker by written agreement, who are paid solely on commission, and who qualify as independent contractors for federal tax purposes (which is a different test than under state law). • Those under the age of 18 before the beginning of the year. • Agricultural employees processing crops or working for a farmer in the production, harvesting or marketing of product. • Temporary staffing agency employees, if the agency does not have day-to-day control over their work assignments and supervision. • Employment agency employees providing part-time or temporary services to another person.

____ Review your current leave policies.

* If you're not currently offering leave, you will need to meet the basic requirements outlined in this law.

* If you are offering leave, you need to ensure that the amounts are aligned with what's specified in the mandatory sick leave law.

Leave accrues at a rate of at least 1 hour for every 30 hours worked. Exempt employees are assumed to work 40 hours in a workweek, unless they are regularly scheduled for fewer hours, in which case their regularly scheduled hours are used. Tipped employees receiving paid leave must be compensated at the minimum wage rate, which will be $9.25 at the time that the law becomes effective.

The employer may choose the 12-month period that constitutes a “year” for purposes of this Act. The amount of leave that may be earned per year is capped at 40 hours (five 8-hour days). The total amount of leave that may be accrued (including carryover, as explained below) may be capped at 64 hours (eight 8-hour days). The total amount of leave that may be used by an employee may be capped at 64 hours per year.

No accrual of leave is required: (1) during a two-week pay period in which the employee worked fewer than 24 hours; (2) during a one-week pay period in which the employee worked fewer than 24 hours in the current and immediately preceding pay period; or (2) during a semi-monthly pay period in which the employee worked fewer than 26 hours.

An employer may make available to the employee the full annual allotment of leave at the beginning of the year. If it does not do so, it must permit carryover of the balance of any unused leave to the next year, up to a maximum of 40 hours.

Accrual commences upon hire, but an employer may prohibit the use of leave during the initial 106 calendar days of employment.

____ When an employee asks for time off, ensure you have a written tracking method until further guidance is provided. Employees may use sick leave for the following reasons:

To care for or treat the employee’s own mental or physical illness, injury, or condition.
To obtain preventive medical care for the employee or family member.
To care for a family member’s mental or physical illness, injury, or condition.
For maternity or paternity leave.
For absences due to domestic violence, sexual assault, or stalking during the employee’s relocation or to obtain for the employee or family member:
Medical or mental health attention;
Services from a victim services organization; or
Legal services

The law applies a broad definition of various family members, including the following: • Spouse. • Child, including biological, foster, adopted, or step, as well as one for whom the employee has legal or physical custody or guardianship, or stands in loco parentis (i.e. acts as the parent, regardless of the legal relationship). • Parent, including biological, foster, adopted, or step for the employee or the employee’s spouse, as well as one who was the legal guardian of or stood in loco parentis to the employee or employee’s spouse. • Grandparent, including biological, foster, adopted, or step, of the employee. • Grandchild, including biological, foster, adopted, or step, of the employee. • Sibling, including biological, foster, adopted, or step, of the employee.

____ Provide notice to employees that they are entitled to leave. Each time wages are paid, the employer must provide a written statement of available leave. This requirement may be satisfied through an electronic system where the employee can access their leave balances.

This notice must include the following: • A statement of how leave is accrued. • The permitted uses of leave. • A statement (1) that the employer must not take adverse action because an employee exercises rights under this Act, and (2) that the employee may not, in bad faith, make a complaint, bring an action, or testify in an action. • Information about the employee’s right to report alleged violations to the Commissioner of the Maryland Department of Licensing and Labor Regulation (DLLR) or to bring a civil action against the employer. Employers must leave records for at least three years of the leave accrued and used by each employee. Failure to keep these records creates a rebuttable presumption that the employer has violated the Act. These records must be available for inspection by the DLLR.

Accrual and Carryover of Leave:

Accrual commences upon hire, but an employer may prohibit the use of leave during the initial 106 calendar days of employment.

Termination:

Accrued unused paid leave need not be paid out upon termination.

If an employee is rehired within 37 weeks, the employer must reinstate the bank of unused leave unless it was paid out upon termination.

If an employer acquires another company and retains employees from that company, the employees retain the leave accrued under the prior company.

Notice and Use of Leave:

If the need for leave is foreseeable, the employee can be required to provide up to seven days of notice. If it is not foreseeable, the employee must provide notice of the need for such leave as soon as practicable and must comply with the employer’s notice requirements for absences, as long as those requirements do not interfere with the ability to use leave.

The employer may deny the use of leave if the employee fails to provide the required notice and the absence will cause a disruption.

The employer cannot require the employee to look for or find a replacement worker. The employer and employee may mutually agree for the employee to work additional hours or trade shifts during the current or following pay period to make up hours in lieu of taking leave. (We note, however, that if the hours are made up in the following week and this results in the employee working more than 40 hours in that week, overtime payment will be required). The employer is not required to consent to a request to work additional hours or trade shifts if it would result in the payment of overtime to the employee.

The employee may use leave in the smallest increments used by the employer’s payroll system to account for absences or work time, except that the employee may be required to take leave in an increment not exceeding four hours.

Verification:

An employer can request verification of the appropriate use of leave if an employee uses more than two consecutive scheduled shifts of leave. Verification may also be required if the employee uses leave between the 107th through 120th calendar days after beginning employment, on terms that the employee agreed to at the time of hire.

If the employee fails to provide the verification, subsequent requests to take leave for the same reason may be denied.

Prohibited Actions and Enforcement:

Employers may not take adverse action (defined as discharge, demotion, threatening discharge or demotion, or any other retaliatory action that results in a change to the employee’s terms and conditions of employment) against employees for exercising in good faith their rights under the Act. Nor may they interfere with, restrain or deny the employees’ exercise of rights. In addition, employers may not count leave against an employee under an absence policy. Employers may, however, prohibit the improper use or a pattern of abuse of leave.

An employee can file a written complaint of violation with the commissioner of the DLLR. The DLLR will investigate within 90 days and attempt to resolve any issue informally through mediation. If the commissioner finds a violation and is unable to reach informal resolution, the commissioner will issue an order that describes the violation and directs payment for the leave and economic damages. The commissioner may also (but is not required to) direct the payment of up to three times the value of the employee’s hourly wage, and may also assess a civil penalty of up to $1000 for each employee for whom the employer is noncompliant.

If the employer does not comply with the commissioner’s order within 30 days, the commissioner may bring an action against the employer on behalf of the employee and may also bring an action to seek enforcement of any civil penalty order. In addition, the employee may bring a civil action in court to enforce the commissioner’s order within three years after the date of the order. If the employee’s court action is successful, the court may (but is not required to) award three times the value of the unpaid leave, punitive damages, attorneys’ fees and costs, and may order injunctive relief or other relief as deemed appropriate.

An Employer’s Existing Policy:

An employer may continue with a paid leave policy that (1) meets the minimum accrual and usage requirements of this law, or (2) does not reduce compensation for an absence due to sick or safe leave. The paid leave may include vacation, sick, short-term disability benefits, floating holidays, parental leave, or any other paid time off that may be used for leave purposes.

Montgomery County Employers:

Employers in Montgomery County must comply with the requirements of both the state and county laws – and there are differences as to which family members are covered, the purposes for using leave, and verification procedures, among other things.

Amanda Haddaway is the managing director for HR Answerbox, a boutique consultancy focused on solving the people problems that business owners, executives and managers face on a daily basis. Amanda has more 35,000 hours of experience in corporate HR services, which allows her to effectively partner with organizations to help them solve their human resources and employee challenges.

Amanda is a national speaker and author of two books. She serves as the director for the Maryland SHRM State Council. She is an adjunct instructor at Montgomery College and a trainer for the Society for Human Resource Management.