Paid sick leave could be mandatory for many Maryland employers by the end of this year. The Maryland General Assembly is currently considering two different paid sick leave mandates. The bill favored by many members of the General Assembly is the Maryland Healthy Working Families Act. The bill favored by Governor Hogan is the Commonsense Paid Leave Act. The Healthy Working Families Act imposes more extensive requirements on employers than the Commonsense Paid Leave Act. Employers should review the potential requirements and address any concerns they may have with their representatives in the General Assembly and begin reviewing their ability to comply with the potential requirements.
The Healthy Working Families Act would require that employers with 15 or more employees provide paid sick leave and that employers with fewer than 15 employees provide unpaid sick leave. The Commonsense Paid Leave Act would require employers with 50 or more employees to provide paid leave and would provide a tax credit to employers with fewer than 50 employees that choose to provide paid sick leave. While both acts would require that employees accrue leave at the rate of 1 hour for every 30 hours worked, they have different required leave accruals: the Healthy Working Families Act would cap mandatory leave accrual at 56 hours annually, whereas the Commonsense Paid Leave Act would cap mandatory leave accrual at 40 hours annually. Under the Healthy Working Families Act an employer could prohibit employees from using the accrued leave for the shorter of the first 90 calendar days of employment or the first 480 hours worked. Although it is somewhat ambiguous, under the Commonsense Paid Leave Act it appears that employees would be prohibited from using leave until after 120 days of employment.
Under the Healthy Working Families Act, employers would be required to allow employees to use the sick leave to care for or treat the employee's own mental or physical illness, injury, or condition; to obtain preventative medical care for the employee or employee's family members; to care for a family member with a mental or physical illness, injury, or condition; or if the absence is necessary due to domestic violence, sexual assault, or stalking committed against the employee or the employee's family member, including obtaining services from a victim's services organization or for related legal proceedings. Family member includes children, spouses, parents, grandparents, grandchildren, and siblings. If need for the leave is foreseeable, the employee would be required to provide advance notice of at least 7 days. If advance notice is not foreseeable, the Healthy Working Families Act would require an employee to provide notice to the employer as soon as practicable and to comply with the employer's requirements for requesting leave only "if those requirements do not interfere with the employee's ability to use earned sick … leave." The employer would be permitted to deny sick leave only if the employee fails to provide the notice required by the employer's policy and "the employee's absence will cause a disruption to the employer." The meaning of this is unclear and could create problems for employers who will be tasked with determining and perhaps proving whether an employee absence will disrupt their operations.
Next, the Healthy Working Families Act would require that employees be allowed to use earned sick and safe leave "in the smallest increment that the employer's payroll system uses to account for absences or the use of the employee's work time." Effectively this means that most employers would be required to allow employees to use leave in increments of six minutes or less. This creates the possibility of employees attributing lateness to conditions covered by the Healthy Working Families Act and requesting leave repeatedly in small increments.
The recordkeeping provisions of the Healthy Working Families Act would be significant. First, the employer must provide the employee with a written statement showing the amount of earned sick leave that is available for use by the employee with their wages or provide an online system through which an employee may ascertain their available leave balance. Employers would also be required to keep three years of records of: (1) sick leave accrued by each employee under the Act; and (2) sick leave use by each employee under the Act. These records would be subject to inspection by the Maryland Commissioner of Labor and Industry. The failure of an employer to have accurate and complete records would be presumed to be a violation.
The Commonsense Paid Leave Act could be more onerous in effect for it would broadly require employers to allow employees to use their accrued leave for "any purpose." As currently written, the Act would not impose requirements on the manner in which the employee may use the leave or place limits on the employer's ability to require compliance with its leave notice requirements.
Notably, the definition of employee under the Healthy Working Families Act is very broad and could include individuals currently classified as contractors. This is because the bill, as currently written, uses the definition of employee from the Maryland Unemployment Insurance Act which provides that any "person performing services is presumed to be an employee, regardless of whether a common law master and servant relationship exist unless specifically exempted under the unemployment insurance law" or the regulations enacted thereunder. In order to overcome this pro-employee presumption, the employer must "establish that the person performing services is an independent contractor," which requires a clear showing that: (1) the person has been and will continue to be free from the employer's control or direction; (2) the service performed by the individual is outside the usual course of business of the employer; and (3) the person performing the service is customarily engaged in an independently established business. The Healthy Working Families Act also excludes from its coverage real estate agents, individuals employed in certain agriculture and fishing operations, individuals who work less than 8 hours per week, and employees in the construction industry covered by a collective bargaining agreement that expressly waives rights to paid leave under the Act. This fairly broad definition of employee creates the possibility that individuals currently classified as independent contractors would be covered by the Healthy Working Families Act.
The Commonsense Paid Leave Act would cover employees working 30 or more hours per week and uses a narrower definition of employee. It would exclude individuals who work sporadically, who work less than 120 days in a 12-month period, who work in the construction industry, or who are covered by a collective bargaining agreement.