Last legislative session the Maryland General Assembly passed the Maryland Healthy Working Families Act (HB1/SB230) (“the Act”), which required employers with 15 or more employees to provide paid sick and safe leave. Although Governor Hogan later vetoed the Act, the Act had passed with enough votes to override the Governor’s veto, leading many to speculate that the legislature would override the Governor’s veto at the beginning of the new legislative session in January 2018. But the Act passed the Senate with exactly the number of votes needed for an override, meaning that a defection of even one senator could result in the inability to override the Governor’s veto.

In recent days, at least one Democratic delegate who originally voted for the Act has publicly expressed concerns about the Act’s impact on small businesses. Although this delegate’s potential defection would not affect the ability of both the Senate and the House of Delegates to override the veto, the delegate’s break from party ranks has caused speculation as to whether the political will to override the veto is eroding.

To further complicate things, Governor Hogan recently issued an emergency compromise bill which will be filed on the first day of the upcoming legislative session. Under that bill, known as the Paid Leave Compromise Act of 2018, businesses with 25 or more employees will be required to offer paid leave to their employees by the year 2020, but in order to give businesses time to prepare, the benefits would be phased in, starting in 2018 for businesses with 50 or more employees. Governor Hogan has also indicated that he will introduce a Small Business Relief Tax Credit, which provides tax credits to businesses with fewer than 50 employees that provide paid leave benefits to their employees.

In light of the uncertainty as to whether the Governor’s veto of the Act will be overridden, employers should be preparing for implementation of paid sick leave legislation in order to avoid costly compliance issues should legislation take effect early in 2018.

Employers should be comparing their existing paid leave policies, if any, to the requirements of the Act. The general requirements of the Act may be found HERE.

  1. Employers should be ensuring that their time keeping systems have the capability of tracking the accrual of paid leave.
  2. Employers should be ensuring that existing leave policies allow for the use of paid leave in all the situations contemplated by the Act.

Employers who do not currently have an existing paid leave policy should be developing one in case implementation becomes necessary early next year.