Pittsburgh's Paid-Sick-Leave Law Takes Effect Soon

After more than a four-year delay, the city of Pittsburgh's Paid Sick Days Act will go into effect on March 15. 

The city passed the ordinance in August 2015, but its authority to pass such a law was challenged in court. In July 2019, the Pennsylvania Supreme Court upheld the city's authority to pass the ordinance. 

On Dec. 16, 2019, the Mayor's Office on Equity (MOE) released official guidelines on the ordinance and a sample of the required notice and posting. This process triggered the 90-day countdown to the law's effective date. Below we highlight some more notable guidelines that attempt to clarify the ordinance's requirements.   

Covered Employees and Employers

The ordinance applies to all full-time and part-time employees who work in Pittsburgh except for state and federal employees, members of a construction union covered by a collective bargaining agreement, and seasonal employees who are notified in writing when they are hired that they will work no more than 16 weeks during the calendar year. It also expressly excludes independent contractors.

The guidelines add a new coverage requirement: employees must work 35 hours or more in Pittsburgh in a year. The guidelines state that employees employed outside the city who travel to and perform work in Pittsburgh are covered, and the portion of their regular travel time in the city counts as hours worked.

Virtually all private sector employers in Pittsburgh or that conduct business in Pittsburgh and have at least one employee anywhere in the country will have to comply with the ordinance. Employers with 15 or more employees must permit accrual of up to 40 hours of paid sick time per year, whereas for the first year the ordinance is in effect—March 15, 2020 through March 14, 2021—employers with 14 or fewer employees must permit accrual of up to 24 hours of unpaid sick time. Beginning March 15, 2021, the time must be paid.

The guidelines explain how business size is determined. Employers must count all employees, excluding owners. Each employee, regardless of whether they are covered, counts as one employee, even part-time employees. If employee numbers fluctuated over the last 12 months, employers must use the highest number at any one time.

Using Existing Policies to Comply

Under the ordinance, employers with a paid leave policy, such as a paid time off policy, that provides paid leave sufficient to meet the law's accrual requirements and may be used for the same purposes and under the same conditions as sick time under the ordinance, are not required to provide additional sick time. The guidelines clarify that if employers offer paid leave that is more generous than what the law requires, the amount of leave that exceeds what the law requires is not subject to the ordinance.

Accrual, Carry-Over and Frontloading

Under the ordinance, employers must permit employees to accrue at least one hour of sick time for every 35 hours they work in Pittsburgh. The guidelines explain that leave accrues in whole-hour units, not fractionally, e.g., if an employee works 30 hours, the employee does not accrue 85 percent of one sick-time hour. Instead, the sick-time hour will not accrue until the employee works an additional five hours.

Under the ordinance, unused sick time must carry over to the following year. The guidelines clarify that the law limits the amount of leave that must be carried over to the applicable accrual cap (40 or 24 hours).  

Alternatively, employers can "frontload" 40 or 24 sick-time hours at the beginning of each year and avoid the carry-over requirements.  The guidelines address frontloading, but are not a model of clarity, particularly in the way they discuss how frontloading can be used for employees who are not scheduled to work enough hours to earn the full 40 or 24 hours in the year.  We hope the MOE will further clarify the frontloading standards.

Documenting Absences

Under the ordinance, employers may only request proof that an employee's leave was for a covered purpose under the ordinance if an employee uses sick time for three or more consecutive days.  The guidelines provide, however, that if the Family and Medical Leave Act (FMLA) also may cover an absence, employers can seek documentation in accordance with the FMLA, notwithstanding the absence's duration. Philadelphia's law contains an identical provision.

Payment for Sick Time Use

The law requires employers to pay leave at an employee's base rate of pay with the same benefits, including health care benefits, an employee receives when working, which cannot be less than the state minimum wage. 

The guidelines explain the pay rate calculations for hourly employees, salaried employees, employees who earn commissions, piece-rate employees, and tipped employees. Additionally, the guidelines provide formulas to address situations when an employee's pay fluctuates or an employee works an indeterminate-length shift or overtime. 

Also, the guidelines "recommend" when employers are expected pay employees for the leave they use. If an employer does not require employees to provide documentation for the absence, payment should occur by the payday for the pay period in which an employee uses leave. If an employer requires documentation for absences of three or more full days, payment should be made by the payday for the pay period in which an employee provides the required documentation.

End-of-Employment Issues

Employers are not required to cash out employees' accrued, unused, paid sick time at the end of their employment, but any unused time must be restored and made available for immediate use if the employee is rehired within six months. The guidelines make it clear that if an employer cashes out leave when employment ends, there is no reinstatement requirement.

Notice and Posting Requirements

The guidelines create a posting requirement that mirrors the ordinance's written notice requirement.  Employers must both provide notice to their employees and post at every worksite (in English, Spanish, and any other primary languages of the employees at the particular workplace) a written notice of employees' entitlement to paid sick time, the amount to which they are entitled, the terms under which leave can be used, the guarantee against retaliation, and the right to file a complaint with MOE regarding violations.  

The city published online a model notice and poster, but employers may use their own form with the required information as long as the poster is no smaller than 8-1/2" x 11". If displaying a poster is not feasible, e.g., if an employer has remote employees, employers may provide a paper or electronic copy of the poster.

Additionally, although the ordinance does not contain a requirement that sick time be shown on employees' paystubs, the guidelines "recommend" that employers choose a reasonable system for providing notice of sick time accrued, including listing updated amounts of sick time available on paystubs or in an online system where employees can access the information.

Anti-Retaliation Protections

Under the ordinance, an employer cannot discriminate or retaliate against employees for exercising or attempting to exercise their sick-time rights. The guidelines add additional specificity to the law's anti-retaliation protections and explain that employers are prohibited from transferring, demoting, discharging, suspending, reducing hours, or directly threatening such actions when employees exercise protected rights. The guidelines also explain that actual or attempted participation in investigations or proceedings under the law, and otherwise exercising protected rights, are protected actions.

The guidelines provide other examples of retaliation:

• Considering sick time use in performance reviews or setting wages.
• Disciplining or terminating employees for sick time use.
• Reporting or threatening to report an employee or an employee's family member to law enforcement in connection with sick-time use.
• Discouraging or denying sick-time requests.

The guidelines expressly note that the anti-retaliation protections do not prevent an employer from taking reasonable action (e.g., discipline) when an employee's use of sick time is not for a covered purpose.

Finally, the guidelines expand upon a provision in the ordinance that prohibits employers from counting sick time as an absence under any absence control policy that may lead to discipline or other adverse actions unless an employee does not provide proper notice to use sick leave. Specifically, the rules say employers cannot establish a point system in which employees receive points for using sick time and, after receiving a specific number of points, the employer terminates the employee.

What Can Employers Do to Prepare?

Employers can prepare by taking one or more of these actions:

• Review the ordinance and guidelines to understand their obligations.
• Decide whether to adopt a separate paid sick leave bank or to ensure that their existing paid sick time, vacation, and paid time off policies and procedures meet the ordinance's strict requirements regarding accrual, use, and conditions placed on leave.
• Decide whether they will use the regular calendar year for sick time or another 12-month period (and ensure employees know what year is being used).
• Prepare notices and determine whether they will be provided in a handbook or in other ways.
• Consider creating acknowledgment forms to guard against claims that notice was not provided.
• Ensure timekeeping, payroll, and benefits systems will enable them to comply with the law's record-keeping requirements.
  
• Ensure that the required notice is posted and provided to employees by March 15.

Mark T. Phillis is an attorney with Littler Mendelson in Pittsburgh. Sebastian Chilco is an attorney with Littler Mendelson in San Francisco. © 2020 Littler Mendelson. All rights reserved. Reposted with permission.