On Jan. 12, 2018, the Maryland General Assembly overrode Gov. Larry Hogan’s 2017 veto of the Maryland Healthy Working Families Act, which requires employers in the state to permit employees to earn and use sick and safe leave. Absent further legislative action, the measure will become effective Feb. 11, 2018. Accordingly, Maryland should prepare to comply with its requirements immediately.
The Healthy Working Families Act applies to all employers in Maryland, including state and local governments; however, it makes a distinction between large and small employers. For employers with 15 or more employees, sick and safe leave is paid leave and must be paid at the employee’s normal pay wage rate (unless the employee is a tipped employee, in which case the leave may be paid at minimum wage). Employers with 14 or fewer employees may provide the leave on an unpaid basis. Full-time, part-time and temporary employees are counted in determining the number of employees.
The legislation applies to all employees, excluding bona fide independent contractors, real estate salespersons or licensed associate real estate brokers, employees under 18 years of age, agricultural sector employees, and temporary services employees. It does not, however, apply to employees who regularly work less than 12 hours a week, certain PRN employees in a health or human services industry, or construction industry employees covered by a collective bargaining agreement that expressly waives the requirements of the Healthy Working Families Act.
Employees must be permitted to earn at least 40 hours of leave per year. An employee can earn leave on an accrual basis per hour worked or an employer can award the employee the full amount of leave in a lump sum at the beginning of each year. Regarding the accrual method, employers should note the following:
- The accrual rate must be one hour for every 30 hours worked, except leave need not accrue during biweekly or semimonthly periods in which the employee worked fewer than 24 or 26 hours, respectively.
- For the purposes of calculating accrual, employees who are classified as “exempt” from the Fair Labor Standards Act’s overtime provisions are presumed to work 40 hours a week.
- Employees must be permitted to carry over at least 40 hours of unused leave to the following year.
- Employers may limit the use of leave to a total of 64 hours in a year and may cap the accrual at 64 hours at any time.
- The legislation provides that leave shall accrue as of Jan. 1, 2018, but it is unclear how this will be interpreted given the Feb. 11, 2018 effective date and the admonition that the legislative shall be construed to apply only prospectively.
Under the lump sum method, unused leave does not have to be carried over to the following year and the limit and cap rules under the accrual method are not applicable. Regardless of how it is earned, an employer may prohibit an employee from using leave during the first 106 calendar days of employment. An employer need not pay unused leave upon termination; however, if the employer rehires the employee within 37 weeks after termination, it must reinstate the accrued leave.
Employers must allow employees to use leave under the Healthy Working Families Act for the following situations:
- To care for or treat the employee’s own or a family member’s mental or physical illness, injury or condition.
- To obtain preventive medical care for the employee or the employee’s family member.
- For maternity or paternity leave.
- Temporary relocation or medical, victim or legal services necessitated by domestic violence, sexual assault, or stalking of the employee or a family member.
Some of these terms are defined (such as family member, domestic violence, sexual assault, and stalking), while others are not (such as mental or physical illness, injury, or condition).
Employers may require employees to take leave in increments up to four hours. However, it can also be taken in increments as small as the smallest increment that the employer’s payroll system uses.
The Healthy Working Families Act does not require an employer to modify an existing paid leave policy, provided that the policy allows employees to accrue and use leave under terms and conditions that are at least equivalent to the leave provided by the legislation. Helpfully, it provides that the terms and conditions of a paid leave policy will be presumed to be equivalent if it allows an employee to access and accrue leave at least at the same rate and use leave for the same reasons as under the Healthy Working Families Act. Employers may also adopt and enforce a policy that prohibits the improper use or a pattern of abuse of leave.
Employers may require employees to provide reasonable advance notice of up to seven days before using the leave if the need for the leave is foreseeable. However, if the need for the leave is not foreseeable, the employee must provide notice only as soon as practicable and generally must comply with the employer’s notice or procedural requirements for requesting or reporting other leave. There is an important caveat: The employer’s notice and procedural requirements cannot interfere with the employee’s ability to use the leave.
Employers have a very limited right to request verification that the leave is being used for an intended purpose. Generally, an employer can request a verification only if an employee uses leave for more than two consecutive scheduled shifts. An employer may also request verification if the employee uses leave during the first 107 and 120 days of employment and the employee agreed to provide verification under terms mutually accepted by the employer and employee at the time of hiring.
An employee who believes that his or her rights under the Healthy Working Families Act have been violated must file a complaint with the Commissioner of the Division of Labor and Industry. If the commissioner finds that the employer has committed the violation, it may award the employee the payment of the value of any unpaid leave, up to an additional three times that amount, as well as economic damages and a civil penalty. If an employee prevails in enforcing the commissioner’s order in court, the court may award the employee three times the value of the employee’s unpaid leave, punitive damages, reasonable attorney’s fees and costs, injunctive relief, and any other relief that the court deems appropriate. The legislation prohibits an employer from retaliating against an employee for exercising a right under the Healthy Working Families Act or from otherwise interfering with those rights.
Employees must be given notice of their entitlement to leave and of the legislation’s provisions, including its anti-retaliation provisions and complaint mechanisms. The Commissioner of the Division of Labor and Industry must publish a poster and model notice, and develop a model policy. Importantly, the legislation requires employers to either provide employees written notice of the amount of leave available to them when wages are paid or provide an online system through which an employee can obtain the same information.
Maryland employers should review their current leave policies to see what, if any, changes they need to make to comply with The Healthy Working Families Act. Some employers may have policies that provide leave at least equivalent to or more generous than those required under the legislation and will not need to make any changes. For those employers who do need to modify their policies, the best way to comply will depend on many individualized factors. Employers should also continue to watch the progress of this legislation; some efforts are already underway to delay it or modify its provisions.
For further information or questions about the information contained in this legal alert, please contact the authors, your McGuireWoods contact, or a member of the firm’s labor and employment team.