Following a trend begun in San Francisco and the District of Columbia, Connecticut recently enacted Public Act 11-52 (the “Act”), which will require covered employers to provide paid sick leave to certain service workers. Connecticut is the first state to enact paid sick leave legislation, but several other states and many cities are in the process of doing so, so all employers should be aware of this development.

The Act becomes effective January 1, 2012.

Proponents of the Act rejoice that service workers will no longer be required to choose between a paycheck and their health. Opponents argue that this is an unnecessary foray into state regulation of employer leave policies and will discourage employers from retaining or increasing jobs in Connecticut.

Some employers will not be covered by the Act. For those employers that already maintain paid sick leave policies that will comply with the requirements of the Act, the Act will be of little effect, while other employers may need to tweak existing policies to comply. But many employers in the service industries will need to act quickly to adopt and communicate compliant paid sick leave programs before the end of 2011.

Covered Employers

The Act applies to employers that had 50 or more employees in Connecticut in any quarter of the previous year. This is determined annually on January 1 and is based on the employer’s quarterly reports to the Connecticut Administrator of Unemployment Compensation. Two types of employers exempt from the Act are:

  • Most manufacturing businesses (i.e., those classified under sections 31, 32, or 33 of the North American Industrial Classification System).
  • 501(c)(3) organizations that provide recreation, childcare, and education services, combined (e.g., the YMCA).

Definition of Service Worker

“Service worker” means an hourly-paid or non-exempt employee who is primarily employed in one of many specified service occupations defined by enumerated occupation codes in the Bureau of Labor Statistics Standard Occupational Classification System (these are listed in the Act). “Day” and temporary workers are excluded from coverage.

MW Comment: Note that an employee who is in a covered service worker category may, nonetheless, be excluded if the employer is an exempt business.

MW Comment: Note that the definition applies primarily to workers who are unable to perform their functions away from the workplace.

How Paid Sick Leave Accrues

Under the Act, paid sick leave must accrue:

  • Beginning January 1, 2012, or for a service worker hired after January 1, 2012, beginning on the service worker’s date of employment;
  • At a rate of one hour of paid sick leave for each 40 hours worked by a service worker; and
  • In one-hour increments up to a maximum of 40 hours per calendar year.

Each service worker will be entitled to carry over up to 40 unused accrued hours of paid sick leave from the current calendar year to the following calendar year.

Unless an employee policy or collective bargaining agreement provides to the contrary, no service worker is entitled to payment of unused accrued sick leave on termination of employment.

Following a break in service, a rehired service worker will begin to accrue sick leave in accordance with the above accrual rules and will not be entitled to any unused hours of paid sick leave that had been accrued prior to the break in service unless agreed to by the employer.

Right to Use Sick Leave

If the service worker was hired before January 1, 2010, he may use accrued paid sick leave on the completion of 680 hours of employment from January 1, 2012. If the service worker is hired on or after January 1, 2010, he may use accrued paid sick leave on the completion of 680 hours of employment from the date of hire. However, service workers may use accrued paid sick leave only if they have worked an average of 10 or more hours a week for the employer in the most recent completed calendar quarter.

MW Comment: It is not clear how this new entitlement will mesh with rights under the Federal and Connecticut Family and Medical Leave Acts.

MW Comment: It is not clear whether employees must use accrued paid sick leave in whole days or whether they may split them into partial days, including by the hour.

Use of Paid Sick Leave

A service worker may use accrued paid sick leave for any of the following purposes:

  • Medical diagnosis, treatment, and care for the mental or physical illness, injury, or health condition of the service worker.
  • Medical diagnosis, treatment, and care for the mental or physical illness, injury, or health condition of the service worker’s child or spouse; and
  • Where the service worker is a victim of family violence or sexual assault, services from a victim services organization, relocation, and law enforcement efforts.

Compliance

An employer will be in compliance with the Act if it offers paid sick leave, or combination of other paid leave, that may be used for all of the purposes listed above.

The employer must provide paid sick leave at a pay rate equal to the greater of the normal hourly wage of the service worker or Connecticut’s minimum wage rate. If a service worker’s hourly wage varies depending on the work performed, the sick leave rate shall be his average hourly wage in the pay period before the one in which he used paid sick leave.

If the employer uses paid time off (PTO), personal days, and/or vacation to comply with the Act, it will need to track how the service worker uses those days.

The Act does not prohibit an employer from taking disciplinary action against a service worker who uses paid sick leave for purposes other than those described above. Additionally, the Act law does not preempt or override the terms of any collective bargaining agreement effective prior to January 1, 2012.

Notice and Documentation of Employee’s Need to Use Paid Sick Leave

An employer may require up to seven days advance notice for paid sick leave that is foreseeable. However, if a service worker’s need for such leave is not foreseeable, the employer may only require a service worker to give notice as soon as practicable.

For paid sick leave of three or more consecutive days, employers may require reasonable documentation that such leave is being taken for a purpose permitted under the sick leave policy.

Notice to Employees

Employers must, at the time of hiring, notify each service worker:

  • Of the entitlement to paid sick leave, amount of paid sick leave provided, and terms under which paid sick leave may be used;
  • That the law prohibits retaliation against the service worker for requesting or using sick leave for which he is eligible; and
  • That he has a right to file a complaint with the Labor Commissioner for violations of the Act.

Employers may comply with this notice obligation by displaying a poster in a conspicuous place, accessible to service workers, at the employer’s place of business. The poster must contain the requisite information in both English and Spanish.

Enforcement

No employer may take retaliatory personnel action or discriminate against an employee because the employee (1) requests or uses paid sick leave under the law or in accordance with the employer’s own paid sick leave policy or (2) files a complaint with the Labor Commissioner alleging the employer’s violation of the Act.

MW Comment: This applies whether or not the employee is a service worker.

Employees aggrieved by a violation of the law may file a complaint with the Connecticut Labor Commissioner. Employers found to have violated the Act shall be liable to the Labor Department for a civil penalty of $500 for each anti-retaliation violation and $100 per occurrence for all other violations. The Labor Commissioner may also award the employee payment for used paid sick leave, rehiring, or reinstatement to the employee’s previous job, payment of back wages, and reestablishment of employee benefits.

To-Do List for Employers

In the near term, all employers should follow the progress of similar legislation in other states and municipalities. In addition, employers with covered service employees in Connecticut should consider:

  • Checking whether their existing PTO and other leave policies comply with the Act;
  • Tweaking those policies to comply with the Act;
  • Reviewing job descriptions;
  • Revising offer letters; and
  • Creating compliant posters or other employee communications.

Overall, the Act is not likely to have a sizable cost impact on Connecticut employers, but patchwork mandated paid sick leave laws like this Act and others currently proposed may create an administrative headache for employers tracking compliance. Its impact will not be pro-business and will not encourage employers to relocate their business to Connecticut or to expand their business there.