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Paid sick leave law landscape continues to evolve

Benefits Administration and Outsourcing Solutions|Executive Compensation|Health and Benefits|Total Rewards
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By Cindy Brockhausen and William (Bill) Kalten | October 29, 2020

Employers in states and localities with PSL and EPTO laws should review their existing leave policies and procedures to ensure compliance.

The paid sick leave (PSL) law landscape continues to evolve as efforts to enact, expand, clarify and even overturn paid sick leave laws is constant across our nation. Since our last update,1 Colorado and New York enacted new PSL laws, New Jersey and New York City amended their existing PSL laws, Maine issued guidance to assist in the implementation of its earned paid time off (EPTO) law, and court actions — or lack thereof — have affected the implementation of PSL ordinances in Texas. PSL laws generally require covered employers to provide specified amounts of paid leave that can be used for certain reasons, such as when they or their family members are ill or are victims of domestic violence, or for work, school or daycare closings related to such issues as a public health emergency, while EPTO laws, which are similarly structured to the PSL laws, allow employees to use leave for any reason. Currently, the only jurisdictions with EPTO laws are Nevada; Maine; and Bernalillo County, New Mexico.

New paid sick leave laws

Colorado’s new PSL law creates both temporary and permanent PSL mandates for employers. The permanent PSL law requires employers to provide one hour of PSL for every 30 hours worked, up to a maximum of 48 hours per year. The law also requires employers to provide additional paid leave for reasons related to a public health emergency. The law is effective January 1, 2021, for employers with 16 or more employees, and January 1, 2022, for employers with less than 16 employees. The law’s temporary provisions — effective July 15, 2020, through December 31, 2020 — expand the applicability of the emergency paid leave requirements of the federal Families First Coronavirus Response Act (FFCRA) and limits the exemptions available to employers under that law.

New York’s PSL law requires employers to provide both paid and unpaid sick leave, depending on the number of employees and the company’s net income. Employers with four or fewer employees must provide up to 40 hours of unpaid leave in a calendar year, unless the employer has a net income of greater than $1 million in the previous year — in which case the sick leave must be paid. In a calendar year, employers with between five and 99 employees must provide up to 40 hours of PSL, and employers with 100 employees or more must provide up to 56 hours of PSL. The statewide law does not preempt the municipal laws already in effect (i.e., in New York City and Westchester County) and provides that other jurisdictions with one million or more residents can enact PSLs that meet or exceed the state’s PSL requirements. The law went into effect on September 30, 2020; however, employees cannot use any accrued leave until January 1, 2021. The state has posted some information on its newly created Paid Sick Leave website, but like the law itself, the information is silent on several important issues, such as how to calculate employer size and whether employers need to comply with any employee notice requirements.

Amendments and updates to existing paid sick leave and earned paid time off laws

Maine’s EPTO law, effective January 1, 2021, requires employers with more than 10 employees in Maine to provide one hour of paid leave for every 40 hours worked, up to a maximum of 40 hours of paid leave per year. To assist in the law’s implementation, the Maine Department of Labor has issued final regulations and FAQs clarifying such issues as frontloading, carryover and separation from employment.

New Jersey’s PSL law was expanded, effective March 25, 2020, to provide leave coverage to employees during a state of emergency declared by the governor, or upon the recommendation, direction or order of a health care provider or authorized public official, when the employee undergoes isolation or quarantine, or cares for a family member in quarantine, as a result of suspected exposure to a communicable disease and a finding by the provider or authority that the employee’s or family member’s presence in the community would jeopardize the health of others. The law also clarifies that employees may use accrued leave time when their workplace — or their child’s school or care provider — has been closed because of a state of emergency declared by the governor due to an epidemic or other public health emergency. Note that New Jersey Governor Phil Murphy declared a public health emergency related to COVID-19 on March 9, 2020.

New York City amended its existing PSL law to better align with New York state’s new PSL law. Amendments include new obligations for New York City employers, such as pay statement reporting requirements (effective September 30, 2020) and expanding the annual amount of PSL for employers with 100 or more employees from 40 hours to 56 hours (effective January 1, 2021). New York City employers have until October 30, 2020, to notify employees of the changes.

Texas’ battle over PSL is still on as the state’s highest court declined to review a case that could have decided whether municipal PSL ordinances in the state were lawful. On June 5, 2020, the Texas Supreme Court let stand the state’s 3rd Court of Appeal’s ruling that blocked Austin's PSL ordinance from taking effect. The court did not offer a reason for its refusal to review the case. Prior to this development, on March 30, 2020, a state district court issued a preliminary injunction blocking Dallas’ PSL ordinance. The city has not stated if it will appeal the decision. San Antonio’s PSL ordinance is also on hold while awaiting a decision from the state’s 4th Court of Appeals. If the appeals court reverses the lower court’s decision, thereby creating a split of authority among the appellate courts, the Texas Supreme Court most likely will grant a petition for review.

For a current listing of all the states and localities with PSL and EPTO laws, see the map below.2 Absent a federal mandate, these laws and regulatory developments are expected to continue.

COVID-19 and paid sick leave

Although leave accrued under the PSL laws are most likely available for a COVID-19-related reason, employers should verify if any COVID-19-specific guidance and employer resources were issued in each jurisdiction where they have operations.

At this time, we are aware of at least 16 jurisdictions that have enacted temporary mandates in direct response to the COVID-19 pandemic. The majority of these measures are set to expire on December 31, 2020, unless extended:

  • The state of California and 12 of its localities — the city of Los Angeles, Los Angeles County, the city of Long Beach, Oakland, the city of Sacramento, Sacramento County, San Diego, San Francisco, San Jose, San Mateo County, Santa Rosa and Sonoma County — have recently enacted similar temporary supplemental PSL laws related to COVID-19. In the state of California, the city of Los Angeles, Oakland, San Diego and San Francisco, these temporary measures are in addition to existing PSL laws. These measures generally extend the emergency PSL protections afforded by the federal FFCRA to employers to which the federal FFCRA does not apply.
  • Washington, D.C., enacted a measure expanding the district’s existing PSL law to provide leave during the COVID-19 emergency. The temporary measure applies to employers with between 50 and 499 employees, but not health care providers, for the same reasons covered under the federal FFCRA.
  • New York recently enacted a law mandating PSL for most employees in certain circumstances when they are under quarantine or isolation orders due to COVID-19. The law is separate from the recently enacted PSL law discussed above.
  • The city of Philadelphia amended its existing paid sick leave law to require employers with 500 or more employees to provide up to 112 hours of paid sick leave for employees to use under certain circumstances during the COVID-19 pandemic.

Going forward

Covered employers in states and localities with PSL and EPTO laws should review their existing leave policies and procedures to ensure they comply with the laws in their operational jurisdictions. Federal contractors must also comply with Executive Order 13706 and its related regulations.

As the number of these laws continues to grow, multistate employers may wish to consider crafting a uniform policy that meets requirements in all their jurisdictions, although doing so could prove challenging, as the laws in some jurisdictions could conflict with laws in others.

Footnotes

1 See “Paid sick and safe leave laws continue to spread, and ‘any reason’ laws starting to emerge,” Insider, August 2019.

2 This map does not include the jurisdictions that have enacted temporary mandates in direct response to the COVID-19 pandemic.

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Senior Director, Retirement and Executive Compensation

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