Maryland Adopts Paid Leave Law

On January 12, 2018, the Maryland General Assembly passed the Maryland Healthy Working Families Act (Act), becoming the latest in a growing group of states requiring paid sick and parental leave. The Act requires employers with 15 or more employees to offer 40 hours of paid “sick and safe” leave per year, and requires employers with 14 or fewer employees to provide unpaid “sick and safe” leave at the same accrual rate and levels. The Act becomes effective on February 11, 2018.

Eligibility

The 15-employee threshold includes part-time, full-time, temporary, and seasonal workers. The Act does, however, exempt specific categories of employees, including:

Employees who regularly perform fewer than 12 hours of work per week;
Employees who are under the age of 18;
Employees who are employed by a temp services agency to provide staffing services;
Employees who are employed by an employment agency to provide part-time or temp services to another individual;
Employees who are employed to perform work on an as-needed basis in a health or human services industry;
Employees who are employed in the agricultural sector on an agricultural operation; and
Employees who are parties to certain collective bargaining agreements in the construction industry.

Paid Leave Accrual

Under the Act, employees must accrue paid leave at the minimum rate of one hour of paid sick and safe leave, for every 30 hours worked, up to a maximum of 40 hours of paid leave a year. For employees who are exempt under the Fair Labor Standards Act (FLSA)—and, thus, may not have records establishing how many hours they worked in a week—the Act presumes 40 hours per week.

Employers can award the entire 40 hours of paid sick and safe leave at the beginning of the year or the beginning of employment. Moreover, employers may prohibit use of accrued leave during the first 106 calendar days of employment.

Although employees may carry over up to 40 hours of paid sick and safe leave from year-to-year, employers may cap usage of paid sick and safe leave at 64 hours per year. Employers need not cash out the value of any unused paid sick and safe leave at the termination of employment. The Act provides that existing paid leave policies may comply with the requirements of the Act, so long as (1) the paid leave policy permits employees to accrue and use leave in terms that are equivalent to the requirements of the Act, and (2) the policy does not reduce employee compensation for an absence due to sick or safe leave.

Qualifying Events

Qualifying events for which employees can utilize paid sick and safe leave under the Act include:

To care for their own mental or physical illness, injury, or condition, or that of a family member;
To obtain preventative medical care for themselves or a family member;
For maternity or paternity leave; or
Where a work absence is necessary due to domestic violence, sexual assault, or stalking committed against the employee or their family member.

There are a few arguably employer-friendly provisions in the Act. First, employees must provide their employer advance notice (seven days) when leave is “foreseeable” (as defined by the Act). If unforeseeable, employees must provide notice “as soon as practicable.” Second, an employer can deny a request for sick and safe leave if the employee fails to give the required notice and the absence will cause a disruption to the employer. Third, employers can establish and utilize a verification process aimed at deterring abuse of paid sick and safe leave (with some limitations, and which forthcoming regulations will need to clarify).

Mandatory Notice and Payroll Practices

By February 11, 2018 employers must provide a mandatory notice to each employee, which outlines the employees’ entitlement to paid sick and safe leave. Maryland’s Department of Labor and Industry plans to issue a model notice, as well as a model policy, and will make them available shortly on its website.

In addition, employers also must provide each employee with a written statement that documents the amount of earned sick and safe leave available to them, per pay period—effectively requiring that accrual calculations of paid sick and safe leave be incorporated into the employer’s payroll practices and recordkeeping. Employers must retain records relating to sick and safe leave for at least three years.

Enforcement

Employees can file complaints with the Department of Labor and Industry, and can also bring civil actions, including for retaliation (but only after the exhaustion of certain administrative remedies). The Act authorizes the recovery of treble damages, punitive damages, attorney fees and injunctive relief.

Notably, the Act preempts all local paid leave laws passed in Maryland on or after January 1, 2017—which means that employers in counties such as Montgomery County must continue to comply with that county’s Earned Sick and Safe Leave law in addition to the Act.

Next Steps

Some reports indicate that the Act’s implementation may be delayed in order to provide the Department of Labor and Industry time to draft regulations, as well as give employers additional time to comply with the Act’s new requirements. Until such time, however, employers should continue to monitor the Act’s implementation status in the coming month, and immediately review and revise leave policies to ensure that they comply with the Act’s new requirements and that all processes addressing leave (such as processes under the Family Medical and Leave Act (FMLA) and Americans with Disabilities Act (ADA)) take into account the leave now required by the Act.