2015 has been a notable year for the passage and implementation of local mandatory paid sick leave (PSL) laws. In addition to statewide laws taking effect in California and Massachusetts, new local laws have taken effect in Emeryville and Oakland, California; Bloomfield, East Orange, Irvington, Montclair, Paterson, and Trenton, New Jersey; and in Philadelphia, Pennsylvania. New laws also have been approved, but will not take effect until 2016, in Montgomery County, Maryland, and Tacoma, Washington. In response to the surge in local leave laws, some state officials have attempted to curb local governments’ authority to enact such measures. New legislation in Michigan, Missouri, and Oregon demonstrate some of the varying approaches legislators have taken to curtail the proliferation of local PSL laws.
On July 14, 2015, Michigan Governor Rick Snyder signed House Bill 4052 into law. It states that regulating private employer-employee relationships “is a matter of state concern and is outside the express or implied authority of local governmental bodies to regulate, absent express delegation of that authority to the local governmental body.” The law prohibits local governments from adopting, enforcing, or administering an ordinance, local policy or resolution requiring private employers to provide employees “any specific fringe benefit or any other benefit for which the employer would incur an expense, including, but not limited to,” paid or unpaid leave time. The law applies to measures adopted after December 31, 2014 even though no local mandatory PSL laws have been passed in the state.
Conversely, on July 10, 2015, Missouri Governor Jay Nixon vetoed House Bill 722, which would have prohibited counties, cities, towns, or villages from establishing, mandating, or otherwise requiring an employer to provide an employee “employment benefits” – anything of value an employee may receive from an employer in addition to wages and salary including, but not limited to, paid or unpaid days off from work for holidays, sick leave, vacation, and personal necessity – that exceed federal or state law requirements. In his veto message, the governor states, “the issues impacted by House Bill No. 722 are local issues . . . Local voters ought to have the right to decide these issues.” Moreover, he believes “it is important that local governments have the ability to build on the minimum standards that are set at the state level.” As in Michigan, there are no state or local PSL laws.
On June 26, 2015, Oregon Governor Kate Brown signed a law that takes a somewhat different approach toward preemption. Senate Bill 454 creates a statewide PSL law, effective January 1, 2016, and preempts local laws once the state law takes effect. Before SB 454, a local law existed in Portland and one was set to take effect in Eugene. The Portland law remains in effect until January 1, 2016. Employers with Portland operations, however, are subject to different standards under the state law. For leave to be paid under state law, an employer must have 10 or more employees in Oregon, but the threshold is lowered to six for Portland employers (which, not coincidentally, is the standard used in Portland’s law). In response to SB 454, Eugene officials delayed their ordinance’s effective date to January 1, 2016, and, after the statewide PSL law passed, announced they would repeal the local ordinance effective January 1, 2016.
Of course, there remains a fourth approach (the California option): Do not ban local laws, and enact a state law. This is the alternative that presents the most compliance challenges / headaches for human resources, payroll, and in-house counsel.
Although it may appear preemption laws have fared well in state legislatures, do not expect Newton’s Third Law of Physics to apply—i.e., for every action (new local PSL law) there will not be an equal and opposite reaction (state preemption law). Rather, the introduction and success of local PSL and preemption measures will continue to ebb and flow. Accordingly, employers must continue to actively monitor developments at the state and local level in places they operate, or plan to operate, to ensure their policies stay compliant with and adaptable to new requirements.