Paid-Sick-Leave Laws Continue to Give Employers Headaches



Many employers would agree that sick workers should stay home to recover and that employees should be able to care for ill relatives when needed. But the proliferation of state and local sick-leave laws with different requirements can burden employers with significant administrative and compliance challenges.

At the end of March, Michigan became the 11th state to require private employers to offer paid sick leave for workers to recover from an illness, seek medical care or care for a sick relative. The Great Lakes State joined Arizona, California, Connecticut, Maryland, Massachusetts, New Jersey, Oregon, Rhode Island, Vermont, Washington and Washington, D.C., in requiring businesses to offer such benefits. Many of these laws also allow workers to use paid-sick-leave accruals for "safe" time if they are targets of domestic violence, sexual assault or stalking. Additionally, Oregon law provides safe time for harassment targets.

"State legislatures see paralysis in Washington, D.C., and little is likely to happen on the federal level," said Corinn Jackson, an attorney with Littler in Los Angeles, and Jim Paretti, an attorney with Littler in Washington, D.C., in a joint statement.

Each state law has different rules about who is covered, the reasons leave can be used, the rate at which employees accrue paid leave and the waiting periods before paid sick leave can be used. To make matters more complicated, many local jurisdictions have their own paid-sick-leave laws that offer more-generous benefits than the state law or are in locations without a statewide law.

"Rarely does one state's law track another state's law precisely and, even within states, local and municipal mandates are often inconsistent," Jackson and Paretti said.

Multiple Applicable Standards

While local paid-sick-leave laws may seem like a good idea to residents, "they can become administrative headaches for employers who operate in multiple states and localities," said Melanie Pate, an attorney with Lewis Roca Rothgerber Christie in Phoenix.

The trickiest compliance issue for employers is developing policies when the local law is not compatible with the state law, noted Peter Hering, an attorney with Rutan & Tucker in Orange County, Calif.

Compliance is particularly challenging in California, where, in addition to the state law, Berkeley, Emeryville, Los Angeles, Oakland, San Diego, San Francisco and Santa Monica each has its own requirements. The statewide Healthy Workplaces, Healthy Families Act covers all employees who work in the state for at least 30 days in a 12-month period for the same employer. Full-time, part-time and temporary workers must accrue at least one hour of paid leave for every 30 hours they work, though employers may limit the use of paid sick leave to three days per year. 

The leave allowances under local laws are more generous than the California law, but each one has slightly different requirements. Furthermore, Los Angeles has a special ordinance that gives hotel workers more protected time off than workers in other industries. Long Beach also has paid-leave requirements for hotel workers.

[SHRM members-only how-to guide: How to Comply with California's Paid Sick Leave Requirements]

In Maryland, Montgomery County has its own law, which predates the statewide requirement. Employers in the county with five or more workers must provide accruals of up to 56 hours of paid sick leave each year, and employers with fewer workers must provide up to 32 hours of paid leave and 24 hours of unpaid leave. Under the statewide law, however, businesses with 15 or more employees must provide up to five paid sick days a year and businesses with fewer workers must provide unpaid leave. 

Provisions beyond the amount of leave provided might differ between state and local laws. For example, under Washington's law, any unused paid sick leave of 40 hours or less must be carried over to the following year. However, Seattle has a tiered system based on employer size. Tacoma has its own rules, too, and a special law applies to the transportation and hospitality industries in the city of SeaTac, which surrounds Seattle-Tacoma International Airport.

Jurisdictions with No State Law

In some states, there is no statewide law, but local laws for paid sick leave and safe time exist. For example, in Illinois, Chicago and Cook County have adopted such laws. In Minnesota, there are laws in Duluth, Minneapolis and St. Paul. New York, the Big Apple and Westchester County have their own laws. Philadelphia also has a paid-sick-leave ordinance, even though Pennsylvania does not.

In Texas, ordinances have been enacted in Austin and San Antonio, but a lawsuit challenging the Austin law has prevented it from taking effect while the case is ongoing. So the ultimate fate of these laws in Texas is still unknown.

Nearly half the states have laws to wholly or partly prohibit local paid-sick-leave ordinances, Jackson and Paretti noted. "While many state-level pre-emption statutes have been anticipatory, others have been enacted only after local paid-sick-leave laws were enacted or took effect." For example, New Jersey recently adopted a state law requiring employers to provide up to 40 hours of paid sick leave to employees, while at the same time pre-empting laws that local jurisdictions have passed throughout the state.

"Given the significant compliance challenges for employers in dealing with multiple municipal paid-sick-leave laws, it is possible that other states will attempt to wholly or partly prohibit local paid-sick-leave ordinances," they said.

In states with more conservative legislatures, the theory behind blocking local paid-sick-leave laws, even when there is no statewide law, is that less regulation and fewer administrative burdens on employers is better for the economy, Pate noted. "In other states, the goal of the legislatures [that] create a statewide law that pre-empts local laws may be the desire to provide greater paid-sick-leave benefits while maintaining consistency for employers in their respective states."

Conduct an Audit

Multijurisdictional employers should audit their paid-sick-leave benefits to ensure compliance with the laws of every jurisdiction in which they operate, Pate said. "A careful audit will provide valuable information that will enable the employer to make appropriate decisions regarding companywide benefits that comply with a patchwork of state and local paid-sick-leave laws."

The law is rapidly changing in this area, so employers are advised to keep a close eye on happenings in state capitals and in the municipalities in which they operate, and to coordinate as closely as they can with employment counsel, Jackson and Paretti said.

[Visit SHRM's resource page on paid time off.]