A new Philadelphia ordinance will require certain employers to provide paid sick days to their employees. The ordinance, effective July 1, 2012, amends the Philadelphia 21st Century Minimum Wage and Benefits Standard by requiring certain entities providing services to, or receiving financial aid from, the City of Philadelphia to provide paid sick leave to their full-time, non-temporary, non-seasonal employees.

Employers subject to the new law include:

  1. The City of Philadelphia, including all its agencies, departments, and offices
  2. For-profit service contractors that receive or are subcontractors on City contracts for $10,000 or more per year and that have annual gross receipts of more than $1 million
  3. Nonprofit service contractors that receive or are subcontractors on City contracts of more than $100,000 per year
  4. Recipients of City leases, concessions, or franchises, or subcontractors thereof, with more than 25 employees
  5. City financial aid recipients for a period of five years following receipt of aid
  6. Public agencies that receive City contracts for $10,000 or more per year

Eligible employees will accrue a minimum of one hour of paid sick leave for every 40 hours worked in Philadelphia. Employees of those employers with 11 or more employees will not accrue more than 56 hours of paid sick time in a calendar year, unless the employer selects a higher limit. Employees of a small business (defined as those with more than five but fewer than 11 employees) will not accrue more than 32 hours of paid sick time during the calendar year, unless the employer selects a higher limit. The ordinance does not apply to employers with five or fewer employees for at least 40 weeks in the calendar year.

The paid sick time will carry over to the following calendar year; however, an employee’s use of it each calendar year shall not exceed the 56 hours of paid time for employers with 11 or more employees or 32 hours for small businesses. Exempt employees will be assumed to work 40 hours per work week for purposes of paid sick time accrual, unless their normal work week is less than 40 hours per week, in which case the accrual would be based on that employee’s normal work week.

Employees may use paid sick time for themselves or for the care of a family member (as defined in the ordinance). No employer may retaliate against an employee for using paid sick time. Furthermore, employers must provide notice to their employees of this entitlement and post certain information regarding the ordinance.

Covered employers may apply for a waiver of this requirement to the City’s Office of Labor Standards. The waiver application must set forth detailed reasons for an employer’s inability to comply with the new law. Significantly, the new paid leave requirements may be waived in whole or in part by a bona fide collective bargaining agreement. The ordinance also imposes certain record-keeping requirements, which take effect when the law becomes effective on July 1, 2012.

Employers should assess whether the new ordinance applies to them and, if so, amend their leave, record-keeping, and posting policies to ensure compliance. Employers may also want to consider any collective bargaining implications or whether they should seek a waiver.