Absent an extension from the General Assembly, Maryland employers have less than 30 days to comply with the law, which is currently scheduled to take effect on February 11, 2018. 

On January 12, 2018, the Maryland General Assembly voted to override Governor Larry Hogan’s veto of the Maryland Healthy Families Working Act, a paid sick leave bill that was passed in 2017. As such, absent an extension from the General Assembly, Maryland employers have less than 30 days to comply with the law, which is currently scheduled to take effect on February 11, 2018. While significant provisions of the law are highlighted below, employers should stay alert for additional information about potential delayed implementation, regulations, “frequently asked questions” guidance, and the anticipated model notice and poster. Duane Morris will continue to monitor developments and provide updates as needed.

Preemption

The state’s Act preempts the authority of a local jurisdiction to enact a law on or after January 1, 2017, that regulates sick and safe leave provided by a private employer. As such, Montgomery County’s Earned Sick and Safe Leave Act, effective October 1, 2016, remains in effect. As written, however, the Act would apply to ban Prince George’s County Earned Sick and Safe Leave law, which was enacted in December 2017, but effective May 2018.

Covered Employees

The Act applies to exempt and nonexempt full-time and part-time employees, as well as to temporary and seasonal employees with the following exceptions:

• Certain licensed real estate salespersons or brokers;
• Individuals who are under the age of 18;
• Individuals who are employed in the agricultural sector on an agricultural operation;
• Certain individuals employed by a temporary services agency;
• Individuals who regularly work less than 12 hours a week;
• Certain employees in the construction industry covered by a collective bargaining agreement;
• Certain per diem workers in the health or human services industry; and
• Employees covered by existing collective bargaining agreements entered into before June 1, 2017, for the duration of the contact term.

Employer Requirements

Employers with 15 or more employees must provide an employee with at least one hour of paid earned sick and safe leave for every 30 hours worked beginning on their date of hire, up to a maximum of 40 hours per year. Exempt employees are presumed to work 40 hours each workweek. At any given time, an employer can cap earned leave at 64 hours. Employers must permit, however, employees to use up to 64 hours of leave in a year. The Act provides a few exceptions to accrual based on hours worked per pay period as well.

Maryland employers with 14 or fewer employees must provide unpaid sick leave on the same terms described above.

The Act contains additional provisions specific to tipped employees and restaurants.

Waiting Period, Terms of Use and Carryover

Employees are not entitled to use earned sick and safe leave during the first 106 calendar days of employment. When earned sick and safe leave becomes available for use to an employee, the employee may take the leave in the smallest increment that the employer’s payroll system uses to account for absences or use of the employee’s work time. Employers, however, may require an employee to take the leave in an increment not exceeding four hours. Unless an employer frontloads the full amount of sick and safe leave an employee would earn over the course of a year at the start of each year, employees are allowed to carry over up to 40 hours of unused earned leave a year. 

Employees can use sick and safe leave:

• To care for or treat the employee’s own mental or physical illness, injury or condition, or to obtain preventive medical care;
• To care for a covered family member with a mental or physical illness, injury or condition, or to obtain preventive medical care for the family member;
• For maternity or paternity leave; or
• For certain absences from work that are necessary due to domestic violence, sexual assault or stalking committed against the employee or the employee’s covered family member.

Employee Notice Requirements and Documentation

Where the need for sick and safe leave is foreseeable, an employee must provide seven days advance notice; otherwise, employees are required to provide notice as soon as practicable. Employers are permitted to deny requests for leave only under certain limited circumstances. Similarly, employers can require employee documentation justifying the use of sick and safe leave only in certain limited circumstances, including, for example, if an employee uses leave for more than two consecutive shifts.

Employer Notice, Posting and Record-Keeping Requirements

Employers must provide employees notice regarding the amount of earned sick and safe leave that is available for use by the employee either in a written statement every time wages are paid or through an online system. In addition, employers must notify employees of their rights under the Act and include information regarding accruals, permitted use, nonretaliation and the Act’s prohibition against employees making complaints in bad faith. The Maryland Commissioner of Labor and Industry will create and distribute a poster and model notice for compliance with this requirement.

Employers must maintain records of all sick and safe leave accrued and used by each employee for at least three years.

Leave Upon Termination, Reinstatement and Upon Acquisition or Sale

Employers are not required to pay employees for unused accrued safe and sick leave upon termination of employment. If an employee is rehired within 37 weeks after leaving employment, however, the employer must reinstate any unused earned leave that the employee had when the employee left, unless the employer voluntarily paid out the leave time at separation. Furthermore, an employer who acquires, by sale or otherwise, another employer must allow all employees of the original employer who remain employed to retain all unused earned sick and safe leave previously accrued.

Nonretaliation, Enforcement, Private Right of Action and Penalties

The Act contains robust nonretaliation provisions covering nondiscrimination, noninterference, and a provision prohibiting the adverse application of an absence control policy. The law will be enforced by the Maryland Commissioner of Labor and Industry, who has the authority to investigate, mediate and order steep penalties to include, for example, treble damages of the value of an employee’s hourly wage for each violation and a civil penalty of up to $1,000 for each employee who has not been properly afforded rights under the Act. The law also provides employees with a private cause of action to file suits in court to enforce their earned sick time rights and request the unpaid time, treble damages, punitive damages, injunctive and attorneys’ fees.

What This Means for Employers

Maryland is the ninth state to enact sick leave legislation, among several local jurisdictions that include, for example, New York City, Chicago and San Francisco, as part of the growing trend that is sweeping the country. Maryland employers should review their current paid time off policies to determine if they currently meet the requirements of the new law—and if not, they should consider what revisions are necessary to bring the policies into compliance. In particular, policies must address employee eligibility, the amount of accrual and carryover and the circumstances for which sick leave may be used.

Employers must also ensure that they comply with the specific notice provisions discussed above, addressing both notice of the law, perhaps in their employee handbook policy, as well as the notice of available leave, which may require coordination with payroll companies. Finally, employers should consider training managerial employees on the specific details of this comprehensive and rather complex new sick leave law.

For More Information

If you have any questions concerning this Alert, please contact one of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.