Seyfarth Synopsis: 2019 proved to be an active year on the paid sick leave (“PSL”) front and there are no signs to suggest 2020 will slow down. As employers wrap up 2019 and look ahead to 2020 and beyond, here is a summary of the key PSL developments since the start of the year and what employers can expect going forward.
The PSL landscape had seen great growth prior to 2019. As of the end of 2013, there were five PSL laws in effect at the state or local level. Just five years later, as of the end of 2018, this number had increased to 35. In 2019, the number of employer-provided paid time off mandates currently in effect or scheduled to go into effect in the coming months and years increased to 42 — an upward trajectory that is seemingly consistent with the PSL growth in prior years. However, 2019 also saw a number of “firsts,” including, but not limited to, laws permitting use of paid time off for any reason, separate paid sick and paid safe leave mandates issued by one jurisdiction, and multiple state high courts considering or opining on PSL laws’ permissibility.
These developments, in addition to pending effective dates of PSL mandates regarded as more “traditional,” suggest an exciting next decade for America’s PSL bug and any evolved form it takes. Here are some of the highlights of 2019 and their impact on employers’ 2020 outlook.
A. If Pain (or Anything Else), Yes Gain
While the pre-2019 PSL landscape contained a number of unique, distinct laws and ordinances, each law and ordinance had at least one thing in common — they contained a limited set of protected absences. Most PSL laws permit eligible employees to use available PSL for their own and their covered family members’ illness or injury, and for preventative care. In addition, a number of PSL laws also allow eligible employees to use available PSL for certain absences related to domestic violence, sexual assault, or stalking (i.e., “safe time”). Although these covered reasons for use are broader than just the employee’s own illness, they were restricted to a defined list. Then came 2019 and the beginning of mandatory paid time off laws.
- Maine: On May 28, 2019, Governor Janet Mills of Maine signed the Earned Paid Leave Law (“EELA”)—the nation’s first paid time off mandate requiring employers to allow employees to use earned paid time off for any reason. The law goes into effect on January 1, 2021, and will require employers to allow eligible employees to accrue up to 40 hours of paid time off each year. Despite a number of outstanding questions regarding employers’ obligations at this time, we expect 2020 will bring clarity to Maine via the release of regulations and/or administrative guidance.
- Nevada: In June 2019, the Nevada Paid Leave Law went into effect “for the purpose of adopting any regulations and performing any other preparatory administrative tasks necessary to carry out [its] provisions,” while the remainder of the mandate—containing the bulk of employer obligations—is scheduled to take effect on January 1, 2020, at which time Nevada will become the first jurisdiction with a fully operative paid personal leave mandate impacting private employers. The Nevada mandate is clear that employers must allow eligible employees to use up to 40 hours of paid time off (“PTO”) each year. Since enacted, the Nevada Labor Commissioner released an Advisory Opinion providing guidance on many aspects of law. However, notable open questions remain, including whether employers can cap annual accrual and whether frontloading eliminates year-end carryover obligations. It is possible that 2020 brings clarity on these points.
- Bernalillo County, NM: In 2019, Bernalillo County, NM became the first local jurisdiction to enact a mandatory paid time off ordinance. Specifically, on August 20, 2019, Bernalillo County passed the Employee Wellness Act (the “Ordinance”), which goes into effect on July 1, 2020. The Ordinance requires covered employers with physical premises within the County’s unincorporated limits to allow eligible employees to use earned paid time off for any reason. Between its passage and December 11, 2019, the Ordinance was twice amended. As the Ordinance currently stands, eligible employees accrue a minimum of one hour of earned PTO for every 32 hours worked. The accrual and usage caps increase incrementally over a period of three years, and vary based on employer size, as follows: (a) July 1, 2020: Employers with 2 or more employees must permit employees to accrue and use up to 28 hours of earned paid time off in a year; (b) July 1, 2021: Employers with 11 or more employees must permit employees to accrue and use up to 44 hours of earned paid time off in a year; (c) July 1, 2022: Employers with 35 or more employees must permit employees to accrue and use up to 56 hours of earned paid time off in a year.
Looking ahead to 2020, it is possible that Albuquerque, which is an incorporated city in Bernalillo County, will pass a similar law. Albuquerque councilmembers, have ordered an economic analysis to determine whether adopting the recently passed Bernalillo County PTO Ordinance would be feasible in Albuquerque, NM.
- New York City - PTO Coming?: In 2019, the New York City Council considered another significant amendment to its Earned Safe and Sick Time Act (“ESSTA”), by introducing a mandatory personal time element. The proposal, called Int. No. 800-A (“the Bill”), would impose even greater substantive burdens on employers, by among other things, allowing covered employees to accrue one hour of personal time for every 30 hours worked, up to 80 hours of personal time per calendar year. These 80 hours would be available for employees to use for any reason and, as the Bill currently stands, would be in addition to the up to 40 hours of sick/safe time eligible employees can accrue under ESSTA. While there has been no action on the Bill over the last several months, it is possible that 2020 will be the year the Bill, or another PTO bill, will pass in New York City.
B. Paid Safe Time Separates Itself from the Sick Leave Bug
In addition to the above emergence of mandatory PTO laws and ordinances, 2019 also saw one jurisdiction, Westchester County, NY, deviate from other PSL locations when it enacted a paid safe time ordinance that was separate and distinct from the county’s PSL ordinance.
- Westchester County, NY - STLL (& ESLL): The Westchester County Earned Sick Leave Law (“ESLL”) was passed late in 2018 and took effect in April 2019. While the ESLL covers a number of “sick time” absences, most notably absences due to an employee’s or their family member’s illness or injury, it conspicuously lacks language regarding “safe time” absences. An explanation for the missing safe time provision appeared in May 2019 when the County passed the Safe Time Leave Law (“STLL”) and became the first jurisdiction to impose mandatory paid safe leave obligations on covered employers that are separate and apart from the jurisdiction’s mandatory PSL obligations. Unlike existing PSL laws and ordinances, including the ESLL, the STLL does not contain accrual or carryover provisions. Closer to its October 30, 2019 effective date, the STLL FAQs confirmed “[t]here is no accrual of safe time leave. Covered employees are entitled to take up to 40 hours of paid [safe time] leave, in any year or calendar year.”
Despite the County’s guidance to date, as we head into 2020, open questions remain as to whether eligible employees may use STLL mandated leave for their family members’ instances of domestic violence or human trafficking or just for themselves. As a reminder, employers’ STLL notice obligations, which exist apart from their posting obligations, begin for existing employees as of January 28, 2020. The County Human Rights Commission has released model notices and posters in English and Spanish on its website.
C. PSL Takes Center Stage in State Supreme Courts
The 2019 calendar year saw multiple PSL lawsuits and questions reach state high courts. Here are some of the highlights and implications for 2020.
- Texas Local PSL Trifecta: Texas has seen four PSL mandates adopted by three localities involved in three active litigations across all state court levels, as well as a federal district court. Only one such ordinance has taken effect. Here is a recap of the ongoing storm of Texas PSL activity, which dates back to August 2018. Potential developments in 2020 based on court schedules are included as well.
- August to December 2018: (a) San Antonio passes original PSL ordinance; (b) Texas Court of Appeals for the Third District (“Third District”) grants a request to enjoin the Austin PSL ordinance’s effective date, originally set for October 1, 2018; (c) A bill that would preempt local PSL ordinances is introduced in Texas House of Representatives; (d) Third District temporarily enjoins Austin PSL ordinance finding it violates the Texas Constitution because it is preempted by the Texas Minimum Wage Act (“TMWA”).
- March to May 2019: (a) City of Austin files petition with state Supreme Court appealing Third District’s decision; (b) A bill that would preempt local PSL ordinances is considered in state Senate; (c) Dallas becomes third Texas locality to pass a PSL ordinance; (d) Bills that would have preempted local PSL ordinances in Texas, if passed, do not make the deadline for consideration on the House floor, and thus do not go to the Governor to sign into law.
- July 2019 to August 2019: (a) Several businesses and associations file a lawsuit seeking an injunction of San Antonio’s former PSL ordinance’s August 1 effective date; (b) City of San Antonio agrees to voluntarily stay implementation of PSL ordinance until December 1, 2019 stating that it would use the delay to consider possible revisions; (c) Lawsuit is filed to enjoin Dallas PSL ordinance two days prior to its August 1, 2019 effective date; (d) Dallas PSL ordinance takes effect despite lawsuit.
- October to December 2019: (a) San Antonio adopts amended ordinance; (b) Plaintiffs’ motion to temporarily enjoin the San Antonio Ordinance, as amended, is granted and a hearing on the merits of a permanent injunction is ordered for September 2020.
- 2020 Outlook: While the Texas Supreme Court has not decided whether it will hear the Austin PSL case, it has ordered the City of Austin and the Austin PSL ordinance’s business-opponents to file briefs on the merits. At this time, all merits briefing is to be completed early in the new year. A Texas Supreme Court decision on the constitutionality of the Austin PSL ordinance would likely have statewide implications and thus impact PSL in both San Antonio and Dallas as well.
- Pittsburgh, PA: Sending shock waves through the PSL community, on July 17, 2019, the Pennsylvania Supreme Court reversed the December 2015 state trial courtand the May 2017 state appellate court decisions, which had found that the Pittsburgh Paid Sick Days Act (“PSDA”) violated the state Home Rule Charter and Optional Plans Law (“Home Rule Law”). Notably, however, the decision did not appear to address when the PSDA actually takes effect. After months of silence, the City released a set of “Guidelines for Administering . . . [the PSDA]” in December 2019. The Guidelines announced the PSDA would take effect on March 15, 2020. The extensive guidance is “intended to help interpret [the PSDA] and to clarify how the Mayor’s Office of Equity (‘MOE’) will administer and enforce [the PSDA].” The materials also foreshadow regulations prior to the March 15 effective date. MOE has also released an amended notice of rights to employees pursuant to the PSDA.
- Michigan Adopt & Amend: Michigan’s first, more employee-friendly PSL mandate was enacted in September 2018. However, a more scaled back version, now known as the Paid Medical Leave Act (“PMLA”), ultimately took effect on March 29, 2019. The mandate was originally a ballot initiative known as the Earned Sick Time Act (“ESTA”), which the outgoing GOP-controlled legislature approved last September in order to avoid the possibility of it passing by public vote. The lame duck legislature, through its power to amend, revamped ESTA and turned it into what is now the more employer-friendly PMLA. Upon the transfer of power, the new state legislature requested that the Michigan Supreme Court issue an advisory opinion regarding the constitutionality of the procedure allowing the amendments. The state Supreme Court ultimately declined to do so via a 4-3 vote in December 2019. It is possible, though not guaranteed, that the high court would weigh in on the issue down the road if an actual case or controversy that needed resolution arises. It also is possible that the state Attorney General issues a formal opinion on the “adopt and amend” procedure in 2020.
- Minneapolis, MN: Since 2016, the Minneapolis PSL mandate has been wrapped up in a lawsuit alleging that the ordinance unlawfully applied to employers outside of the jurisdiction by focusing on whether employees worked a sufficient amount of hours in the city for the employer, regardless of the employer’s location. In April 2019, the Minnesota Court of Appeals overruled a trial court’s finding that the Minneapolis mandate did not apply to employers outside of the City. The Court of Appeals’ decision was appealed to the Minnesota Supreme Court. On October 1, 2019, the state Supreme Court heard arguments on both on the extraterritoriality issue and whether the Minneapolis ordinance was explicitly or implicitly preempted by other state laws (both lower courts had found it was not). As a result, Minneapolis employers may receive closure one way or the other regarding the reach of the city’s PSL ordinance in 2020.
D. Old Faces, New Places
Despite 2019 seeing three PTO laws enacted at the state and local level, and other locations such as New York City and Albuquerque entering the conversation around such mandates, there is still one “traditional” PSL mandate scheduled to take effect in 2020. Specifically, the Duluth Earned Sick and Safe Time Ordinance takes effect on January 1, 2020, at which time employees will be entitled to accrue up to 64 hours of PSL per year, carryover 40 hours per year, and use 40 hours per year. Since it was enacted, the City has released a number of materials for employers clarifying certain obligations, including regulations, FAQs, and a notice poster.
E. Employer Takeaways
The short and long-term trajectory for a trend towards PTO laws and other PSL derivatives, PSL litigation, resolution of open questions as they relate to laws either in effect or scheduled to go into effect, and other budding developments, remains to be seen. If 2019 is indicative given the landscape at the start of the decade and even at the end of 2018, employers should expect even more strains of the PSL bug to manifest in 2020 and beyond. We will continue to monitor PSL and related developments, and update employers in the new year.
As the paid leave landscape continues to expand, companies should reach out to their Seyfarth contact for solutions and recommendations on addressing compliance with specific PSL and paid time off laws and on PSL requirements generally. To stay up-to-date on paid leave developments, click here to sign up for Seyfarth’s Paid Sick Leave mailing list.