The Local Rules: Municipal Sick Time Laws and Employer
The Local Rules: Municipal Sick Time Laws and Employer
By Matthew R. Kissling and Nancy M. Barnes
On January 29, 2014, Newark, New Jersey became the latest municipality to enact a sick leave ordinance that requires employers to provide paid sick leave to their employees. With an anticipated effective date of May 29, 2014, the Newark ordinance will require every employer operating within the city’s limits to provide employees with up to 40 hours of paid sick time per year. By passing this legislation, Newark joins six other major municipalities that require employers to provide sick time to each employee working within that city’s limits. Many other municipalities are considering the enactment of similar requirements.
Outside of Newark, employers must be mindful of the sick time requirements of the following cities: New York, NY; San Francisco, CA; Jersey City, NJ; Washington, DC; Seattle, WA; and Portland, OR. While the specific requirements of each city differ, all six laws impose several common obligations on employers:On January 29, 2014, Newark, New Jersey became the latest municipality to enact a sick leave ordinance that requires employers to provide paid sick leave to their employees. With an anticipated effective date of May 29, 2014, the Newark ordinance will require every employer operating within the city’s limits to provide employees with up to 40 hours of paid sick time per year. By passing this legislation, Newark joins six other major municipalities that require employers to provide sick time to each employee working within that city’s limits. Many other municipalities are considering the enactment of similar requirements.
Universal coverage. Most importantly, virtually any employer might be covered by these sick time laws, regardless of the number of employees. An employer’s lack of a physical workplace within one of these cities is irrelevant; instead, a company is generally covered if it has at least one employee working within city limits. For example, San Francisco’s ordinance requires any employer that has an employee working in the city to provide that individual with one hour of paid sick time for every 30 hours worked. The fact that the employee works out of his or her home within the city, and not at a designated company facility, simply does not matter for coverage purposes.
Leave Policies............................................................... 1
Affordable Care Act Update: Final Rules and Transition Relief for Some Employers 3
OSHA Implements Its 2014 Site-
Specific Targeting Inspection Plan............................. 5
Supreme Court Clarifies When
Work Preparations Must Be Compensated............. 6
Workers’ Compensation Does Your Household Need to Obtain Workers’
Compensation Coverage?........................................... 7
For more details on any of the topics covered in The [email protected], please contact the authors via the links at the end of each article or Tim McDonald, editor-in- chief. For information on our Labor & Employment practice, please contact Stephen Richey, practice group leader.
ATLANTA CINCINNATI CLEVELAND COLUMBUS DAYTON NEW YORK WASHINGTON, D.C.
Tiered leave entitlements. All seven municipalities uniformly require employers to provide sick leave for specific situations, including an employee’s own medical condition and the illness or injury of a family member. The specific amount and type (paid or unpaid) of leave required differs under each law, and is based on an employer’s total number of employees. Jersey City, for instance, requires 40 hours of paid sick time per year if an employer has at least 10 total employees. If there are fewer than 10 workers, the employer must provide 40 hours of unpaid sick time.
- Strict notice and posting. Each municipal law also imposes strict posting and notice requirements on covered employers. Generally speaking, every employer must provide written notice of an employee’s sick time rights in both English and the employee’s primary language. This same type of notice must also be clearly and prominently posted at each workplace where the leave entitlements apply.
In a marketplace where employers must constantly monitor ever-changing federal and state leave laws, this type of municipal legislation presents a new challenge – managing sick or medical leave at a local level. The immediate result of these laws is obvious: Employers must now tailor their sick leave policies to individual locations or groups of employees. At the same time, the consequences of failing to comply can be quite painful, including enforcement actions by local agencies, civil penalties levied on a per employee and per day basis, and even private lawsuits by aggrieved employees. As a result, employers are wise to implement some best practices to address the challenges posed by these new municipal laws and ensure compliance with their requirements.
Review and update leave policies. If you have employees in any of these seven cities, your existing leave policies should be drafted to incorporate the sick time requirements of each applicable municipality or, at a minimum, indicate that the company-wide policy is subject to exceptions that are required by state or local law. Importantly, all seven laws acknowledge that employers already providing leave that is sufficient to meet the sick time requirements are not required to provide additional sick leave to employees. You should be cautious, however, and ensure that your existing leave policies cover the same absences under the same terms as required by the municipal laws.
Provide notices and posters. You should also take steps to comply with the notice and posting requirements of the sick leave law that applies to your business. In particular, you should update employee handbooks or other policy statements to include the required notice of employee sick leave rights. This notice should also inform employees of their right to file a complaint with the relevant city agency, be free from retaliation and/or pursue a private action. Employers should be aware that the notice must comply with the specific language requirements of the applicable municipal law. To the extent required, employers should also display a poster of employee rights in conspicuous places at each workplace. These posters can be obtained from the agency that enforces the sick leave laws applicable to your business.
Keep track of employee locations. Even if you are not currently covered by a municipal sick leave law, the situation can change by hiring individuals to work in a covered city. Importantly, your company’s lack of a physical office or workplace in any of these cities does not matter for coverage purposes. Instead, your business can become covered by a sick leave law simply by hiring an employee to work in one of the seven cities. For example, if your company hires a salesperson to work out of her home in New York City, that individual will be entitled to paid sick time under the city’s sick leave law. To avoid any coverage surprises, you should closely monitor where your current and new employees perform their work duties. By doing so, you will be in the best position to comply with municipal sick leave requirements down the road.
Given the passage of sick leave laws in New York City, Portland, Newark and Jersey City during 2013, it is safe to assume that other municipalities will follow suit in the coming years. In particular, the city council of Philadelphia has made perennial efforts to enact a paid sick leave law, and is poised to do so again in 2014 or 2015. Similarly, current New York Mayor Bill DiBlasio has already announced plans to expand the coverage of the city’s sick time law during his term. By taking proactive steps to ensure compliance with existing laws, as well as anticipating the enactment of similar legislation in the near future, employers can rest assured that they are meeting their sick leave obligations to employees at a federal, state and local level.
Affordable Care Act Update: Final Rules and Transition Relief for Some Employers
By Laura A. Ryan
On February 10, 2014, new guidance was issued regarding the pay or play requirements under the Affordable Care Act. The Affordable Care Act imposes penalties on certain employers who fail to provide affordable, minimum-value
medical coverage to substantially all full-time employees and their children. While the final regulations do not alter the basic structure established by the proposed regulations and other previous guidance, they do provide transition relief and additional clarity. The new rules apply for periods beginning after December 31, 2014, and employers will need to become familiar with the guidance to ensure compliance.
The final regulations provide the following transition relief:
- Mid-sized employers. Generally, employers with 50 or more full-time equivalent employees are subject to the employer shared responsibility provisions. However, for the 2015 plan year, employers with up to 99 full-time equivalent employees for 2014 are not subject to the employer shared responsibility provisions if the employer does not reduce its workforce (or overall hours of service) to qualify for the relief, does not eliminate or materially reduce its health coverage in effect on February 9, 2014, and certifies that it meets the foregoing requirements.
• Coverage threshold lowered to 70 percent.
Generally, an applicable large employer may be subject to a penalty for failure to offer minimum essential coverage to at least 95 percent of its full- time employees and their children. However, for the 2015 plan year, an applicable large employer (100 or more full-time equivalent employees in 2014) will not be subject to the failure to offer penalty if it offers coverage to at least 70 percent (rather than 95 percent) of its full-time employees and their children.
- Dependent coverage. Generally, an applicable large employer may face the “failure to offer” penalty if it does not offer coverage to its full-time employees’ children (in addition to the full-time employees). For employers who do not currently offer coverage to dependents (or some subset of dependents to whom coverage must be offered under the final regulations), the penalty will not apply for the 2015 plan year solely by reason of the failure to offer coverage to those dependents if the employer takes steps during the 2015 plan year to offer dependent coverage for the 2016 plan year.
• Applicable large employer determinations.
Generally, the determination of whether an
employer is an applicable large employer (and thus subject to the pay or play requirements) is made by reference to the average number of full-time equivalent employees during the preceding calendar year. However, for purposes of determining status as an applicable large employer for the 2015 calendar year, employers may use a period of at least six consecutive months (rather than a full year).
- Measurement periods. The final regulations permit an applicable large employer to use a look-back measurement period to determine the full-time employees to whom it must offer coverage during
an immediately following stability period. For the 2015 plan year, an employer may use a measurement period of at least six months followed by a 12-month stability period. This transitional measurement period must start no later than July 1, 2014 and end no earlier than 90 days before the first day of the plan year beginning on or after January 1, 2015.
- Non-calendar-year plans. An employer with a non- calendar-year plan will not be required to satisfy the employer shared responsibility requirements until the beginning of the 2015 plan year if it satisfies certain conditions as of February 9, 2014, and offers affordable, minimum-value coverage to its full-time employees on the first day of the 2015 plan year.
Other Significant Changes
In addition to the transition relief described above, the final regulations make other significant changes and clarifications:
- Exclude stepchildren and foster children from the definition of “dependent”
- Define “seasonal employee”
- Provide a non-exhaustive list of factors for employers to use to determine whether new
employees are reasonably expected to be full-time employees
- Expand rules preventing the use of hours equivalencies under certain circumstances
- Clarify rules for counting hours of service
- Clarify rules that apply for determining full-time employees if an employer does not utilize the look- back measurement method, and provide rules for employees transitioning between groups using different measurement methods
- Revise rules on rehired employees, and provide special rehire rules for employees of educational organizations
- Provide rules for determining when coverage by a staffing firm is considered an offer of coverage by the service recipient employer
- Clarify use of the rate of pay safe harbor for determining affordability when the rate of pay of an employee is reduced mid-year
- Provide an acceptable method to credit hours of service for adjunct faculty members
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OSHA Implements Its 2014 Site-Specific Targeting Inspection Plan
By M. Scott Young
In February 2014, OSHA issued its Site- Specific Targeting 2014 (SST-14) inspection plan, replacing its prior plan from 2013, which establishes criteria by which OSHA will conduct site-specific inspections of establishments for 2014. An “establishment” is a single physical location where services or industrial operations are
performed. For activities where employees do not work at
single physical locations, an establishment is defined as the main or branch offices, terminals, stations, etc. that carry out these activities.
OSHA’s primary inspection list for its SST-14 will be based upon recidivism rates of establishments that were inspected as part of OSHA’s SST plans from 2011 and 2012. The primary inspection list for federal jurisdiction area offices for SST-14 will be comprised of 1,260 establishments that were selected as part of OSHA’s SST plans from 2011 and 2012.
OSHA’s secondary inspection list for its SST-14 will be based upon calendar year 2011’s injury and illness data. Manufacturing establishments with a days away, restricted or transfer to another job (DART) rate at or above 7.0 or days away from work (DAFWII) case rate at or above 5.0, where only one of these criteria must be met, will be subject to OSHA’s secondary inspection list. Non-manufacturing establishments, except for nursing and personal care facilities, will need to have a DART rate at or above 15.0 or a DAFWII rate at or above 14.0, to be subject OSHA’s 2014 SST secondary inspection list.
The DART rate is the rate of cases per 100 full-time equivalent employees involving days away from work, restricted work activity and transfers to another job from a work-related injury or illness. The formula used is (N ÷ EH) x (200,000), where N is the number of cases involving days away and/or restricted work activity and/or job transfers from work, EH is the total number of hours worked by all employees during the calendar year and 200,000 is the base number of hours worked for 100 full-time equivalent employees. For example, employees of an establishment, including management, temporary and leased employees working 645,089 hours at the workplace, who had
22 injury and illness cases involving days away and/or restricted, work activity and/or job transfer (based upon the OSHA 300 log), would have a DART rate of (22 ÷ 645,089) x (200,000) = 6.8.
The DAFWII rate is the rate of cases per 100 full-time equivalent employees involving days away from work from a work-related injury or illness. Cases that involve only temporary transfers to another job or restricted work are not included in this rate. Thus, employees of an establishment, including management, temporary and leased employees who worked 452,680 hours at a workplace, where there were 25
injury and illness cases involving days away from work (based upon the OSHA 300 log), would have a DAFWII case rate of (25 ÷ 452,680) x (200,000)
OSHA’s tertiary inspection list includes manufacturing establishments with a DART rate of 5.0 or greater or a DAFWII case rate of 4.0 or greater. Non-manufacturing establishments, not including nursing and personal
care facilities, will need to have a DART rate of 7.0 or greater or a DAFWII case rate of 5.0 or greater. OSHA will inspect facilities from its tertiary list through February 1, 2015, only if, and after, all establishments subject to OSHA’s primary and secondary lists are inspected.
An inspection conducted by OSHA under its SST-14 will be a comprehensive safety inspection. It will include a substantially complete and thorough inspection of all potentially hazardous areas of an establishment. OSHA also conducts inspections of establishments based upon reports of imminent danger, fatalities or catastrophes, safety complaints, referrals by other government agencies, and as a follow-up to prior inspections that resulted in findings of safety violations.
Thompson Hine regularly counsels and assists clients with issues relating to OSHA, including compliance with OSHA regulations, best practices to prepare for an inspection by OSHA and, as appropriate, how to comply with or contest findings by OSHA following an inspection.
For more information on OSHA’s SST-14 and other OSHA matters, please contact Scott Young.
Supreme Court Clarifies When Work Preparations Must Be Compensated
By Stephen Richey
Generally, non-exempt or hourly employees must be compensated for all time worked. In most workplaces, the beginning and end of the workday are easily identified. However, in some industries workers are required to “don” various pieces of protective gear and likewise “doff,” or remove the
equipment, when the workday ends. If the equipment is
necessary for the performance of the employee’s job duties, then the employee should normally be compensated for the time required to don and doff the gear. However, the Fair Labor Standards Act provides an exception to this general rule where the workforce is unionized.
Section 203(o) of the FLSA provides that compensability for time spent “changing clothes or washing at the beginning or end of each workday” is a subject appropriately committed to collective bargaining. In other words, the employer and the union can negotiate whether changing clothes will be treated as compensable time. This, of course, begs the question of whether the protective equipment required for certain industries qualifies as “clothing.” In the recent case Sandifer v. U.S. Steel Corporation, Mr. Sandifer and a class of steelworkers argued that the protective gear they were required to wear goes beyond what can fairly be considered clothing. The protective gear in question included a flame- retardant jacket, pants and hood, along with a hardhat, a snood, wristlets, work gloves, leggings, boots, safety glasses, earplugs and a respirator.
The Department of Labor has issued guidance on this issue several times in the recent past. Unfortunately, the guidance has not been entirely consistent, swinging to some extent based on the executive politics. Likewise, the federal courts have rendered differing and sometimes conflicting decisions, until the issue found its way to the Supreme Court. In a February decision, the justices declared the protective gear in the Sandifer case to be “clothes.”
The Court, in a decision authored by Justice Scalia, held that the common sense meaning of most of the items worn by the steelworkers was clothing. In doing so, Justice Scalia relied not on esoteric legal theories, but rather the Webster’s New International Dictionary definition of “clothes” from the time when Section 203(o) was enacted (“Covering for the human body”).
The Court acknowledged that some of the gear worn by the union employees did not satisfy the definition of clothes, namely, the worker’s glasses, ear plugs and respirators. The lower courts had ruled that time spent putting on these non- clothes items did not need to be compensated because the time required was considered to be de minimis, that is too small to count. Justice Scalia rejected that analysis as inconsistent with the statute, which he found to be all about “trifles.” Rather, the Court held that a more appropriate way to proceed is for courts to ask whether the period at issue can, on the whole, be fairly characterized as “time spent in changing clothes or washing.”
The Sandifer decision will be helpful to employers with a unionized workforce, but provides no excuse for the majority of employers. Again, the general rule is that employees must be compensated from the time they begin performing work for the benefit of the employer. Any employer whose employees spend time donning and doffing protective equipment that is not compensated should seek advice whether such time is likely to fall either under Section 203(o) or some other exclusion under the FLSA.
For more information about the FLSA, please contact
Does Your Household Need to Obtain Workers’ Compensation Coverage?
By Janis B. Rosenthal
It is a very bad day when you receive a notice from a bureau of workers’ compensation that a claim has been filed by someone who has performed work for you. The notice may indicate that you are responsible for all costs associated with the claim, and penalties, because you
failed to obtain coverage. The scenario may include a worker whom you have known briefly or for many years. For example, an individual
cleans your home every other week
Ohio law, for example, requires all employers to obtain workers’ compensation coverage for their employees from the first date of hire. The state requires coverage for all workers, including aliens and minors. The law specifically requires coverage for household workers who earn $160 or more in cash in any calendar quarter from a single household, and casual workers who earn $160 or more in
cash in any calendar quarter from a single employer. The statute encompasses aliens and minors who meet this criteria, and applies to full-
or part-time domestic workers
and receives $75 for his or her services each time, earning approximately $150 per month and about $450 per calendar quarter from you. One day, the worker trips on the stairs and fractures a bone. A call to 911 is made and the worker is taken to the emergency room. At the emergency room, the worker completes a history, indicating while at work at your home, the worker fell down the stairs. Often the ER will file that form with the Bureau of Workers’ Compensation, which will lead to the employee receiving medical treatment for the injury suffered while the worker was working at your home. The BWC will pay for that treatment, and you will be notified that you are a non- complying employer. The BWC pays 100 percent of the costs of medical treatment and could award lost time benefits if the employee is unable to
There is no limit to the
amount of medical benefits or lost time that can be awarded … The costs can be very great and the problem would be avoided if you had filed for coverage.
employed inside or outside your private residence, including private drivers you hire. Normally, the workers perform domestic services, such as gardening, mowing, pet care/walking, housekeeping, babysitting and laundry. An employee who provides home improvement or construction services should be considered for coverage unless he has proof that he has his own business and coverage. The employee should provide a copy of his active certificate of coverage for you to keep, and you should request a copy at least annually.
Premiums are based on the wages you pay and report every six months. Obtaining coverage is easy. In Ohio, an employer needs to complete a U- 3, which is available online at the Bureau of Workers’ compensation web site.
perform his or her job duties. There is no limit to the amount of medical benefits or lost time that can be awarded. The lost time benefit paid is based on wages from all employers, not just the wages you paid. The costs can be very great and the problem would be avoided if you had filed for coverage.
If you receive notice of a claim, you should resolve the situation as soon as possible and before a high liability accrues. The best advice is to obtain coverage before an injury occurs.