Seyfarth Synopsis: Last month, Nevada became the second state to enact a mandatory paid time off law. The law, which goes into effect on January 1, 2020, requires employers to allow employees to use earned paid leave for any reason.
On June 12, 2019, Governor Steve Sisolak of Nevada signed Senate Bill No. 312 (the “Bill”), which requires certain employers to provide eligible employees with paid time off (“PTO”), which employees can use for any reason. The law is only the second PTO law to have passed in the United States, and requires employers to allow employees to use earned paid leave for any reason. While states have generally regulated how vacation or PTO must be accrued, paid out upon termination, etc., until recently, states have not mandated that employers provide PTO. The Bill began as a mandatory paid sick leave proposal, similar to the sick leave laws that exist in eleven states and more than two dozen municipalities around the country. However, in April 2019, the Bill was amended, to among other things, permit employees to use paid time off without providing a reason to their employer for the use.
Employers have until January 1, 2020, to develop a plan that is complaint with the Nevada PTO law. In the meantime, here are some of the highlights of the Nevada PTO law:
- Covered Employers: The Nevada PTO law applies to private employers who have fifty or more employees in private employment in the State. The law further provides that it does not apply to an employer who, pursuant to a contract, policy, collective bargaining, or other agreement, provides employees with a policy for paid leave or a policy for paid time off to all scheduled employees at a rate of at least 0.01923 hours of paid leave per hour of work performed.
- Eligible Employees: The Nevada PTO law does not define employee, but provides that temporary, seasonal, and on-call employees are not covered under the law.
- Accrual: Employees are entitled to accrue paid leave at the rate of at least 0.01923 hours for each hour of work performed.
- Frontloading: Rather than permit accrual, employers may provide employees the total number of hours of paid leave that the employee is entitled to accrue in a benefit year (i.e. forty hours) on the first day of each benefit year.
- Carryover: If employees accrue paid leave, employers must permit employees to carry over up to a maximum of forty hours of paid leave to the following benefit year. The law, however, does not require employers to permit carry over if the employer frontloads paid leave at the start of the year.
- Usage Cap: An employer may limit the amount of paid leave an employee uses to forty hours per benefit year.
- Benefit Year: Under the Nevada PTO law, benefit year means a 365-day period used by an employer when calculating the accrual of paid leave.
- Increments of Use: Although an employer may set a minimum increment of paid leave that an employee may use at any one time, such increment cannot exceed four hours.
- Usage of PTO: An employer must allow an employee to use paid leave beginning on the 90th calendar day of the employee’s employment.
- Reasons for Use: Employee may use available paid leave without providing a reason to his or her employer for such use.
- Notice to Employer: Employees must give notice to their employer as soon as practicable.
- Recordkeeping: The Nevada PTO law requires employers to maintain a record of the receipt or accrual and use of paid leave for each employee for a one-year period following the entry of such information in the record. Upon request, the employer must make those records available for inspection by the Labor Commissioner.
- Employee Paystub Notification: An employer is required provide to each employee on each payday an accounting of the hours of paid leave available for use by that employee.
- New Employer Grace Period: The Nevada PTO law provides for a grace period for new employers. Specifically. for the first 2 years of operation, an employer is not required to comply with the law.
Employers should begin taking steps to comply with the Nevada PTO law before its January 1, 2020, effective date. Here are some steps to consider:
- Review existing paid time off policies and either implement new policies or revise existing policies to satisfy the Nevada PTO law;
- Monitor the Nevada Department of Labor’s website for information on the PTO law, including draft and final rules; and
- Train supervisory and managerial employees, as well as HR, on the new requirements.
We will continue to monitor and provide updates on Nevada paid leave developments as the law’s effective date approaches and on any subsequent changes.
As the paid leave landscape continues to expand, companies should reach out to their Seyfarth contact for solutions and recommendations on addressing compliance with this Law and sick leave requirements generally. To stay up-to-date on paid leave developments, click here to sign up for Seyfarth’s Paid Sick Leave mailing list.