Agenda Item 8B
June 23, 2015
Action
MEMORANDUM
June 19,2015
TO:
FROM:
County Council
Robert H. Drummer, Senior Legislative
Jacob Sesker, Senior Legislative Analyst
r-
A~w;
eyf
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SUBJECT:
Action:
Bill 60-14, Human Rights and Civil Liberties - Earned Sick and Safe
Leave
Health and Human Services Committee recommendation
(3-0):
enact the Bill with
amendments.
Bill 60-14, Human Rights and Civil Liberties - Earned Sick and Safe Leave, sponsored by
then-Council Vice President Leventhal and Councilmembers Navarro, Branson, Eirich, Riemer,
and Hucker, was introduced on November 25, 2014. A public hearing was held on January 29 and
a Health and Human Services Committee worksession
was
held on June 11.
Bill 60-14 would require an employer operating and doing business in the County to
provide earned sick and safe leave to each employee for work performed in the County. Earned
sick and safe leave is paid leave away from work that can be used for the injury or illness of the
employee or the employee's immediate family or due to domestic violence suffered by the
employee or a member of the employee's immediate family. An employer could provide paid
time off that can be used by the employee for any purpose to satisfy the earned sick and safe leave
requirement of the Bill.
Bill 60-14 would require an employer to provide earned sick and safe leave at a rate of at
least 1 hour for every 30 hours an employee works in the County up to 56 hours in a calendar year.
An employee would have to be paid for earned sick and safe leave at the same rate and with the
same benefits as the employee normally earns. A tipped employee would have to be paid at least
the County minimum wage for each hour the employee uses earned sick and safe leave.
Background
FMLA and MFLA
Congress enacted the Family and Medical Leave Act (FMLA) in 1993. The FMLA
requires an employer with 50 or more employees to provide 12 work weeks of unpaid leave in a
12-month rolling period. An employee must have worked at least 1250 hours during the preceding
12-month period to be eligible for unpaid leave under the FMLA. One of the reasons an employee
may take unpaid FMLA leave is for the employee's "serious health condition" or to take care of
an immediate family member with a "serious health condition." An employee must be unable to
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perform any one of the essential functions of the employee's position in order to use FMLA leave
for a serious health condition. The U.S. Department of Labor FMLA Fact Sheet is at ©14-17.
In 2008, Maryland enacted the Flexible Leave Act (MFLA), codified at Labor
&
Employment
Art.
§3-802. This law requires an employer who has 15 or more employees to permit
an employee to use paid leave earned by the employee under an employer's paid leave benefit for
the illness of an immediate family member.
Both the FMLA and the MFLA were designed to permit an employee to miss work due to
the employee's illness or the illness of an immediate family member without risking the loss of
employment. However, both of these laws leave several large holes in employee protection. The
FMLA does not apply to an employer with fewer than 50 employees, does not protect an employee
who has not worked at least 1250 hours in the preceding 12 months, and requires an employee to
have a "serious health condition." The FMLA does not require the employer to pay the employee
for time missed under the FMLA. The MFLA does not mandate any leave.
It
requires an employer
to permit an employee to use paid leave already provided by the employer for the illness of an
immediate family member. US Labor Secretary Thomas Perez recently issued a public statement
supporting State and local earned sick day laws. See © 147.
Local
Paid
Sick Leave laws
The District of Columbia enacted the Accrued Sick and Safe Leave Act of 2008, amended
by the Earned Sick and Safe Leave Amendment Act of2013. The mandatory employer poster for
this law is at © 18. Under the DC law:
an employer with 100 or more employees must provide 1 hour ofleave per 3 7 hours
( 1)
worked;
(2)
an employer with 25-99 employees must provide 1 hour of leave per 43 hours
worked; and
(3)
an employer with less than 25 employees must provide 1 hour per 87 hours worked.
The DC law is enforced by the District of Columbia Department of Employment Services, Office
of Wage and Hour.
In
2006,
San Francisco enacted a Paid Sick Leave Ordinance (PSLO) pursuant to a voter
referendum. The PSLO requires an employer with fewer
than
10 employees to provide 5 days or
40 hours of paid sick leave.
An
employer with 10 or more employees must provide 9 days or 72
hours of paid sick leave. Leave must be earned at the rate of 1 hour for every 30 hours worked
after an initial probation period of90 days. The PSLO covers full-time, part-time, and temporary
workers.
In
2009, the Urban Institute published a study reviewing the effect of the PSLO on
employers in San Francisco,
Employers' Perspectives on San Francisco's Paid Sick Leave Policy,
Boots, Martinson, and Danziger. See ©19-37.
Legislation to mandate earned sick leave was introduced
in
the Maryland General
Assembly in 2014 and 2015, but was not enacted. The Fiscal Note for HB 385 at ©38-51 includes
a summary of State-wide paid sick leave laws
in
California, Connecticut, and Massachusetts. A
report produced by the law
firm,
Jackson Lewis, comparing the key components of State and local
paid sick leave laws is at ©134-146.
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Labor market imperfections and government interventions
The market for labor matches employers' demand for labor, derived from the demand for
the product or service offered by the employer, with the supply of suitable workers. Firms choose
to pay for an additional unit oflabor when the additional output of that unit oflabor can be justified
by the cost of the labor. The labor supply enters into the labor market when the compensation
exceeds the value (opportunity cost) that the worker places on their time. Supply and demand of
labor are both affected by prices-for example, the high cost of labor may discourage firms from
hiring additional workers, but the high cost of labor may also encourage more individuals to
participate in the market for labor.
The compensation offered to employees may be limited to wages, but many employers
offer and many employees (individually or collectively) negotiate for other non-wage
compensation or benefits.
If
the market for labor functioned perfectly, all of the actors in the labor
market would behave rationally, have accurate information to use in setting a price for labor, and
the costs and benefits of the employer-employee relationship would be internalized in the price
(i.e. wage plus non-wage) oflabor.
Of course, the labor market like other markets is not perfect. Imperfections in the labor
market that might justify government intervention include the following:
Some actors in the labor market behave irrationally. Individuals in the labor market
may undervalue paid sick leave or underestimate the odds that they will need to take paid
sick leave. Similarly, firms may choose not to offer paid sick leave because they
undervalue the self-imposed quarantine of sick employees or underestimate how frequently
their employees experience illness.
Some actors
in
the labor market do not have accurate or complete information.
Individuals in the labor supply may not know which employers are hiring, let alone have
information about the wages and non-wage compensation/benefits offered by those
employers. At the same time, firms that hire workers do not know how likely those workers
are to use paid sick leave (or any other employment benefit). It is possible that employees
who are likely to use a lot of paid sick time will take the time to identify employers that
offer paid sick leave.
Some benefits and costs associated with the labor are not internalized. Most of the
benefits associated with preventing or minimizing the spread of contagious disease accrue
to society at large and not just to the employer. Some of the costs of contagious disease
already accrue to society rather than just the employer.
Types of government interventions
Government intervention in the labor market could theoretically address each of the labor
market imperfections identified above. Generally speaking, those interventions tend to fall into
the following categories:
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Taxing and spending: A strength of any ''taxing and spending" response to labor market
imperfections is that the benefits are spread broadly across society. The weaknesses of
taxing and spending include that it is an awkward and inefficient way to pay for
personal/individual benefits, and that frequently the intended beneficiaries (who often are
unable to bear any additional financial strain) end up bearing some portion of the cost of
the tax.
Employer mandates: A strength of an employer mandate is that the total cost of
implementing the program is often reduced because some employers are able to achieve
compliance with no change or small tweaks to their current practices. A weakness of an
employer mandate is
if
the employer's cost is disproportionate to the benefits that accrue
to the employer, then employers may be bearing what would otherwise be a societal cost.
Employer mandates and the social safety net
The social safety net in this country relies on a mix of government spending, government
subsidies and government-mandated programs (employer and individual mandates). Relying on
government mandates for a portion of the social safety net has allowed this country to impose
generally lower tax burdens than those imposed by comparably wealthy democracies. However,
that reliance has not reduced the cost of social welfare programs, but simply has redistributed a
portion of those costs through other economic channels.
As a result of employer mandates, many employed individuals in this system enjoy access to
very good health and social welfare coverage, while other individuals (especially those who are
either unattached or less attached to an employer) frequently.lack access to benefits such as paid
sick or parental \eave.
If,
as expected, the nature of work continues to move away from the
exclusive employer-employee relationship that became the norm in the 20th century, the social
safety net programs that mandate employer-provided benefits will reach an ever-shrinking portion
of the labor force.
Public Hearing
Nineteen of the 28 speakers at the January 29 public hearing supported the Bill. The other
9 speakers opposed the BilL Representatives of the County Commission on Aging (©60) and the
County Commission for Women (©61-63) supported the Bill as a much needed benefit for low
wage workers in the County. The Job Opportunities Task Force (©64-67), the Public Justice
Center (©68-70), Montgomery County Young Democrats (©71-72), Jews United for Justice
(©73), SEIU Local 32BJ (©74-75), UFCW Union Local 400 (©76), MomsRising.org (©77),
Business and Professional Women of Maryland (©78-79), and National Nurses United (©80-81),
each had a representative testify in support of the Bill.
Representatives from the Greater Silver Spring Chamber of Commerce (©82-89), the
Gaithersburg/Germantown Chamber of Commerce (©90-91 ), The Greater Bethesda-Chevy Chase
Chamber of Commerce (©92-93), the Montgomery County Chamber of Commerce (©94-95), the
Community Services for Autistic Adults and Children (©96-97), the Maryland Motor Truck
Association (©98), the Mid-Atlantic Petroleum Distributors, the Restaurant Association of
Maryland (©99-100), and ConTemporaries, Inc. (©101-104) each opposed the Bill as an
additional burden on small County businesses. Several of the business groups urged the Council
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not to enact a paid sick leave law for the County because competitors located in the rest of
Maryland would not have to provide this benefit.
Wendy Chun-Hoon, Andy Kirschner (©105), Rabbi Charles Arian (©106), Fran Rothstein
(©107-108), Laura Wallace (©109), and Marcellina Flores (©110-111) supported the Bill as
individuals. Two small business owners in the County, Mimi Hassanein (©112) and Gabriela
Miller also supported the Bill. Rachel Metz (©113) and Equality Maryland (©114) sent in written
testimony supporting the Bill. Century Distributers, Inc. (©115-116), the Maryland Retailers
Association (©117), the Sheet Metal and Air Conditioning Contractors' Mid-Atlantic Chapter
(©118-120), and The Arc Montgomery County (©121) sent inwritten testimony opposing the
Bill.
Many of the individuals and community groups supported mandatory paid sick leave as an
important benefit that would permit low wage workers to stay home without losing pay or their
job. Small businesses and chambers of commerce generally opposed the Bill, with special
emphasis on the application of the Bill to very small employers and part-time workers with a
flexible schedule. Finally, several County non-profit human services providers opposed the Bill
because it would raise their cost of providing these services to the community.
HHS
Work.session
Councilmembers Navarro, Hucker, and Eirich also attended the meeting. James Stowe,
Director of the Office of Human Rights represented the Executive Branch. Jacob Sesker, Senior
Legislative Analyst and Robert H. Drummer, Senior Legislative Attorney represented Council
staff. The Committee reviewed the Bill and made the following amendments (3-0):
1.
add the recommended language from the County Attorney's Office and
recommended by Council staff clarifying that any general paid leave system
adopted by an employer that provides the sick and safe leave mandated by the Bill
is sufficient;
delay the effective date of the Bill for any employee covered by a collective
bargaining agreement until the agreement expires;
add the word "specific" on line 277 as suggested by the County Attorney's Office;
make the technical changes suggested by the County Attorney's Office;
permit an employer to provide notice ofleave earned and used by online system;
exclude an employee who regularly works 8 hours or less each week;
delete lines 172-175 requiring an employer to use leave earned while working in
the County after being transferred out of the County;
permit an employer to require leave be taken in up to 4 hour increments;
extend the effective date to October 1, 2016;
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2.
3.
4.
5.
6.
7.
8.
9.
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10.
require an employer to reinstate unused leave only
if
the employee returns in 6
months or less; and
permit an employee to accrue leave during a 90-day probation period, but not use
it during the probation period.
11.
The Committee recommended approval (3-0) of the Bill with amendments.
Discussion
1.
What is the fiscal and economic impact of the Bill?
OMB estimated a cost to implement the Bill at between $628,946 and $636,701 in FY16.
1
See ©52-59. Most of these costs would continue each year. The Bill would have a fiscal impact
for both increased benefits for some County employees and cost to administer and enforce the new
law. Although regular County employees accrue sick leave at a rate greater than required by the
Bill, County employees are not currently eligible to use sick leave for some of the categories of
safe leave. In addition, temporary and seasonal County employees would start earning paid sick
leave at the rate required in the Bill. OMB estimated a need to add up to 18.6 new FTEs to cover
the work not performed by employees tal<lng advantage of the new paid sick and safe leave benefit.
In addition, OMB estimated that the Office of Human Resources would need one additional
position at either Grade 23 or Grade 25 to administer this new benefit.
OMB also estimated that changes
to
the MCTime and ERP systems to accommodate the
new benefit would cost an additional $165,906 in FY16. The Office of Human Rights would be
responsible for enforcement. OMB estimated that no extra staff would be necessary to handle
complaints and violations. However, this could change quickly if the number of complaints is
greater than expected.
2
Without additional staff, the time for investigating and resolving all
complaints by the Office of Human Rights is likely to increase.
3
Finance was unable to find survey data on how many employees working in the County do
not have paid sick leave. However, using national data and looking at both size of businesses and
industry sectors in the County, Finance estimated that between 89,217 and 91,051 employees are
working in the County without paid sick leave. Assuming that each employee earns the County
minimum wage of $8.40 per hour and uses the maximum of 56 hours of paid leave each year,
Finance estimated the cost to County businesses would be between $41.95 million and $42.82
The estimated fiscal impact did not assume creation of a new Montgomery County Department of Labor Regulation.
However, it is possible that continued local regulation oflabor will create a need for a cabinet-level department capable
of enforcing local labor regulation.
2
The number of complaints in Washington, D.C. has been relatively low in comparison to other jurisdictions such as
San Francisco and Seattle. This may result from the fact that a significant portion of the local workforce is comprised
of federal employees who already benefit from paid sick leave in excess of the local mandate.
On
the other hand, if
the number of complaints is higher, as in other jurisdictions (e.g. in 2013 Seattle received 109 complaints and San
Francisco received 69 complaints), additional investigative/enforcement staff may be necessary.
3
Without adding more investigators to the Office of Human Rights, enforcement is likely to be sporadic and
ineffective.
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million per year.
4
These costs could have a positive economic impact on low wage workers and a
negative impact on County business income. To the extent businesses are able to pass these
increased costs on to customers, the Bill could have a negative economic impact on the County.
2. What portion of workers have paid sick leave?
The U.S. Bureau of Labor Statistics reported, in 2014, that 61% of workers in private-
industry businesses have paid sick leave, while 89% of workers in state and local governments
have.paid sick leave.
5
Private-industry businesses with fewer than 100 workers provide 52% of
workers with paid sick leave; in contrast, private employers with more than 100 employees provide
72% of employees with paid sick leave. Private industry provides 74% of full time workers with
paid sick leave, whereas only 24% of part time workers receive the benefit. Nonunion employees
are less likely to have paid sick leave than union employees. Low wage workers are much less
likely than high wage workers to benefit from paid leave. See
National Compensation Survey,
March 2014
at© 122-127.
3. What are the expected benefits of a paid sick leave law?
The absence of paid sick leave inevitably forces part-time and low wage employees to
choose between working sick, and thereby spreading contagious diseases, or losing much needed
pay.
6
An
employee who comes to work with a contagious illness increases the risk of spreading
the disease to fellow workers, customers, and the general public. A part-time or low wage
employee who has significant contact with the public or the food supply and who chooses to work
while sick can contribute to the spread of contagious disease.
A paid sick leave law will increase the number of workers with paid sick leave. The effect
of a paid sick leave law depends upon both the coverage of the bill and also the compliance by
employers. The DC Auditor's 2013 review of the Accrued Sick and Safe Leave Act of2008 found
that of surveyed employers, the percentage of employers providing paid sick leave only increased
from 50% in 2007 to 68% in 2012.
A review of Seattle's paid sick leave ordinance indicates that overall, the percentage of
employers providing paid sick leave increased from 67% in 2012 to 76% in 2013, though coverage
by employers in the food and accommodation sector increased from 14% providing the benefit
when the requirement was imposed to 78% providing the benefit one year later. Overall, about
61 % of surveyed employers in Seattle offer leave as required one year after the law went into
effect.
Implementation and Early Outcomes of the City a/Seattle Paid Sick Time Ordinance.
See
Executive Summary at ©128.
Finance assumed that all of the cost to provide paid sick leave accrues to the employer. However, it is likely that
some employers already have a paid vacation or paid time off benefit that could be converted to paid sick leave to
comply with the Bill at little or no cost.
5
Workers in private industry are much more likely to have paid vacation time (77%) and paid holidays (76%) than
paid sick leave (61%).
6
According to the White House Council of Economic Advisors
(The Economics of Paid and Unpaid Leave, 2014),
23% of workers took paid or unpaid leave during a typical week.
An
additional
4.1
%
of workers reported they wanted
to take leave but could not do so. The most common reasons reported for not being able to take leave included ''too
much work" (26%) and "could not afford loss in income"
(190/o)
and "feared losingjob" (12%).
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4. What is the cost to an employer of providing paid leave?
Nationally, the average total cost of compensation for workers in private industry is $31.32
per hour. Bureau of Labor Statistics National Compensation Survey (December, 2014). Of that
amount, $21.72 is wage and salary compensation, and $2.16 is paid leave (sick leave, vacation
leave, holiday leave, and personal leave). Of the $2.16, paid sick leave is $0.26 compared to $1.13
for paid vacation leave. Since both paid sick leave and paid vacation leave are generally tied to
wages, this difference probably indicates that many more employers offer paid vacation time than
paid sick time, and may also reflect that among employers that offer both benefits, it is common
to offer more paid vacation leave than paid sick leave.
The employer cost of paid leave (sick leave, vacation leave, holiday leave, personal leave)
is related to the wage and salary compensation for the employer's employees. Occupations or
industries with higher wages or salaries are associated with higher employer costs of paid leave.
According to the Bureau of Labor Statistics (BLS), private industry paid leave benefit costs were
highest in management and professional occupations, with an average hourly cost of $4.67 per
hour worked (8.4% of total compensation). In contrast, the employer cost of paid leave for service
occupations was only $0.56 per hour worked, or 3.9% of total compensation. Similarly, the
employer costs ranged from a high of $4.82 per hour worked in the information industry (8. 7% of
total compensation), to a low of $0.41 per hour worked in leisure and hospitality (3.1% of total
compensation).
Private industry employees in bargaining units not only have higher wage and salary
compensation, but also have benefits that comprise a significantly larger share of total
compensation costs (40.3% of total compensation for union employees, versus 29.2% for nonunion
employees). However, that cost difference is mostly attributable to retirement and insurance. The
cost associated with paid leave (per hour of work) in private industry is $3.25 for union labor (7.0%
of total compensation) as compared to $2.05 for nonunion labor (6.9% of total compensation).
Establishment size is also a factor. In private industry establishments with 49 or fewer
employees, paid leave costs $1.43 per hour worked (of which $0.16 is the cost of paid sick leave),
whereas in private industry establishments with more than 500 employees paid leave costs $3.87
per hour worked ($0.52 of which reflects the cost of paid sick leave).
5. How have employers responded to sick leave mandates in other jurisdictions?
Some employers may seek to cover any costs associated with paid sick leave by increasing
consumer prices or reducing the cost of non-labor inputs, while other employers may seek to cover
the costs of paid sick leave by reducing labor costs (e.g. by reducing the size or :frequency of wage
increases or by reducing other employment benefits).
The Urban Institute's study Employers' Perspectives on San Francisco's Paid Sick Leave
Ordinance (see ©19-37) represents the most informative study to date of a local paid sick leave
ordinance. Among the relevant findings are the following:
Generally speaking, the employer experience in San Francisco indicated that the cost of
the requirement was relatively small in comparison to other labor-related mandates (such
as the increase in the minimum wage). Reasons for the minimal impact included having
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few affected employees or adjusting only slightly the total number of paid days off (through
substituting sick days for vacation days or making relatively minor adjustments to accrual
rates).
About half of the employers interviewed tried to offset or minimize their increased labor
costs-for example, canceling or delaying planned wage increases, eliminating end of year
payout for unused vacation time, reducing paid vacation time or reducing bonuses.
Small and medium sized employers were more affected by the mandate than larger
employers, and also reported more difficulty administering the law (because, for example,
they were less likely to have sophisticated payroll systems). Larger employers were better
able to absorb the cost and track or administer the mandated benefit.
In terms of offsetting benefits, few employers reported any early benefits from reduced
absenteeism, lower turnover, or improved employee morale as a result of the paid sick
leave ordinance.
7
Seattle employers surveyed reported modest but non-negligible impacts on their
businesses. "Most believed the Ordinance had little to no effect on customer service, employee
relations, or profitability. A minority (17%) thought the Ordinance made them less profitable."
6. How would the paid sick leave law affect small businesses?
The public hearing testimony from the Chambers of Commerce focused on the problems
the Bill would cause small businesses with employees working in the County. Large businesses
are more likely to have leave policies that comply with the Bill and, more importantly, a central
personnel system that is already established to track leave earned and used. A small business that
does not have an electronic tracking system for timesheets and leave would have to set up a system
to comply with the Bill. Although we do not have any statistics showing the number of businesses
of different sizes that do not have paid leave policies already, it is logical to assume that smaller
businesses are less likely to provide paid leave for their employees. To the extent that this
assumption is true, the Bill would have an adverse effect on the competitive costs incurred by a
small business compared to a large business that already complies with the Bill.
7. How would the paid sick leave law affect restaurants?
The Restaurant Association of Maryland testified (©99-100) that the restaurant industry
has developed a system of using part-time employees with a flexible schedule.
If
an employee
needs to take a sick day, the employee is often scheduled
to
work another day as a substitute. Since
most restaurant jobs are coverage jobs where an absent employee must
be
replaced on the shift, a
restaurant would be forced to pay for two people to cover one shift if one employee calls in sick.
This differs from many office jobs where an absent employee simply makes up the work when the
employee returns to work. The Bill would require a restaurant to pay a tipped employee the full
County minimum wage for hours missed while on sick or safe leave. This would, essentially,
require the employer to pay the employee for tips not received by the employee or the employer
1
When all or most employers are required to provide paid sick leave, then paid sick leave ceases to be a factor
affecting employee turnover/loyalty.
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when the employee is on sick or safe leave. However, a tipped employee who regularly earns
significantly more than the County minimum wage in tips may prefer to be rescheduled for a
different shift rather
than
be paid the County minimum wage.
One of the underlying reasons for the Bill is concern that a food service worker would be
forced to come to work sick and thereby spread disease because the employer does not provide
sick leave. The Restaurant Association pointed out that COMAR already prohibits a food service
handler from working with food while sick. See COMAR §10.15.03.14.
8. How would the paid sick leave law affect the construction industry?
The Sheet Metal and Air Conditioning Contractors' Mid-Atlantic Chapter (©118-120)
opposed the application of the Bill to their industry. They argued that the one-size-fits-all approach
in
the Bill does not fit the skilled construction labor market. Most work performed on large
commercial construction projects is done by small subcontractors who hire skilled labor for various
jobs in the local area A skilled worker is often employed at different job sites in different
jurisdictions on the same day. The Chapter argued that keeping track of the hours worked in the
County by a worker assigned to different job sites throughout the day or week would be difficult
and time consuming. They pointed out that many of these workers are covered by a collective
bargaining agreement and routinely earn significantly more than the County minimum wage. Any
worker on a Federal, State, or County project would already
be
covered by either the Federal
Davis-Bacon Act or the State or County Prevailing Wage Law that establishes minimum wages
and benefits for each classification of skilled labor.
·
If
the Committee wants to exempt construction workers, it could be done either by industry,
or more effectively, by limiting the Bill to employees who earn a lower hourly wage.
9. How would the County enforce the law?
The new law would be enforced by the County Office of Human Rights (OHR).
8
There is
no equivalent Federal or State law. Bill 60-14 would authorize a person to file a complaint with
the Office of Human Rights. The complaint would be handled in the same manner as a complaint
alleging a violation of the County employment discrimination laws. The Director has authority to
issue subpoenas and investigate the complaint.
If
the Director finds reasonable cause to believe a
violation occurred, the Director must try to settle the case.
If
unable to settle the case, the Director
must certify the complaint to the Human Rights Commission, which must appoint a case review
board to consider and decide the complaint.
If
the Director does not find reasonable cause to
believe a violation has occurred, the complainant may appeal the Director's decision to the
Commission. An adjudicatory hearing may.be conducted by the Commission case review board
or a hearing examiner.
8
In the Seattle City Auditor's review of paid sick time enforcement it found that out of 109 total complaints, its Office
of Civil Rights was able to perform only 6 investigations and reach 3 settlements. In contrast, San Francisco budgeted
resources for enforcement and had 6.2 FTEs working on enforcement/compliance with minimum wage and paid sick
leave ordinances. The 69 complaints in 2013 resulted in
55
investigations and 23 settlements. Iflocal regulation of
labor is to continue and enforcement of labor regulations is expected, the County should consider creating an office
specifically charged with outreach and enforcement of local labor laws, similar to San Francisco's Office of Labor
Standards Enforcement.
For additional information regarding Seattle's Paid Sick and Safe Time Ordinance
Enforcement Audit, see: http://www.seattle.gov/counciVattachments/PSSTAudit2014.pdf
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The Commission has the authority to award compensatory damages to the complainant,
including reasonable attorney's fees. The Commission also has the authority to order the defendant
employer to pay a civil fine to the County of up to $500 for each violation. The Commission's
final decision is subject to judicial review on the record by the Circuit Court.
OHR has made progress in recent years to reduce the time to close a case from 48 months
to 24 months. However, the Council did not add any new investigator positions for OHR in the
FY2016 operating budget. The Office currently has 4 investigators and 1 manager who performs
some investigations to handle all employment, housing, and public accommodation discrimination
claims, along with claims involving, displaced service workers, the new Fair Criminal Records
Standard law, the new Retaliation for Wage Disclosure law, and the County Minimum Wage law.
9
An investigation of a sick and safe leave claim would be complicated. An investigator
would have to determine if the employee worked in the County, if the employer properly calculated
the sick leave earned based upon the number of hours worked in the County, and the circumstances
surrounding the employee's absence from work.
If
the employee was disciplined or fired, the
investigator would need to determine if the adverse employment action was due to a failure to
comply with this law or some other legitimate reason. An investigator might also need to
determine if the employer retaliated against the employer for exercising the employee's right to
earned sick and safe leave or for simply advocating for compliance with the law.
Proper enforcement should also include a public information campaign to inform
employers and employees of the new law and periodic surveys of employers to determine
compliance. For example, a recent survey of the Seattle law one year after it was enacted found
that 39% of the employers
who responded to the survey
still did not provide sick and safe leave
for part-time employees. See ©128. Four years after the District of Columbia law was enacted,
the District's Auditor found that the District Government had not complied with the law for its
own employees and that the percentage of employers providing paid sick leave only increased
from 50% in 2007 to 68% in 2012. See ©129-130. A second audit from the District's Auditor
released on May 28, 2015 found that the law was having minimal impact on local businesses,
compliance with the posting requirement remained low, and that the District Government had still
not provided back leave to more than 1800 District Government employees. See summary at
©149.
10. Would the County sick and safe leave law apply
in
municipalities?
As with most County laws, the County sick and safe leave law would not automatically be
applicable in certain municipalities. Md. Local Gov't Code, §4-111 provides that a municipality
can exempt itself from certain types of County laws. The County Attorney's Office created a chart
that lists the Chapters of the County Code from which each municipality has exempted itself.
10
According to the most recent chart, there are 5 municipalities in which the Bill would not apply
unless they expressly opt in: Barnesville, Chevy Chase Village, Glen Echo, Laytonsville, and
9
10
Minimum wage claims can be referred to the State Department of Labor, Licensing, and Regulation.
The Chart can be found at:
http://www.rnontgomerycountymd.gov/cat/services/index.html
11
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Poolesville.
11
The Bill would apply in all of the other municipalities unless they expressly opt out,
including Rockville and Gaithersburg. We would note that with the possible exception of
Poolesville, there are few large employers located in these municipalities.
The State law does permit the County to enact a law that applies in each municipality under
a specific emergency procedure with 6 votes. However, the Council would have to hold a new
public hearing after giving each municipality 30 days actual notice, and make a legislative finding
that "there will be a significant adverse impact on the public health, safety, or welfare affecting
residents of the County in unincorporated areas if the law does not apply in all
municipalities." This finding by the Council would be subject to judicial review in the Circuit
Court. Furthermore, the County Code contains the following provision in§ 1-203:
(f)
Emergency override authority.
The County declares that it will not exercise the
authority granted to it by the General Assembly under section 2B(b)(3 ), article 23 A,
Annotated Code of Maryland 1957, as amended.12
Therefore, in order for the Bill to apply in all municipalities, the Council would either need to
amend §1-203 of the County Code or add a section to Bill 60-14 expressly voiding this provision
for this Bill only to use the emergency override authority granted under State law.
11. Would the Bill apply to workers who work in the County for an employer located outside
of the County or who work outside the County for an employer located in the County?
To be a valid local law, the Bill must apply only to work performed in the County by an
employer who is located in the County. The dual requirement that the employer be located in the
County and the work be performed in the County would apply to any municipality that has
exempted itself from this law as well as other counties inside and outside of Maryland. This could
result in confusion among employers and employees. As suggested by some of the testimony, an
employer with locations inside and outside the County may have to create a system to track hours
worked by each employee in the County to properly calculate the amount of earned sick and safe
leave.
13
Issues for Council Action
1.
The County Attorney's Bill review memorandum.
The County Attorney's Bill review memorandum (©131-133) makes several suggested
amendments.
(a)
The Bill should address potential conflicts between the requirements of the law and an
employment contract or a collective bargaining contract. Committee recommendation (3-0):
add the following on lines 190-200 at ©9:
Although the County Attorney's chart indicates that Takoma Park exempted itself from Chapter 27, the Takoma
Park City Attorney told Council staff that the City agreed
to
be bound by Chapter 27 of the County Code and therefore
this sick leave Bill.
12
This code section was recently re-codified as Md. Local Gov't Code §4- l l l.
13
Of course, an employer can avoid this confusion by providing the minimum sick and safe leave to all of its
employees without regard to place of employment.
11
12
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(g)
This Article must not be construed to:
(1)
require an employer to compensate an employee for unused earned sick and
safe leave when the employee leaves the employer's employment;
(2)
prohibit an employer from adopting or retaining a general paid leave policy
that meets the minimum requirement of this Article; or
(3)
affect a provision of a contract, a collective bargaining agreement, an
employee benefit plan, or any other agreement that requires the employer
to provide general paid leave benefits that meet the minimum requirements
of this Article.
(b)
Lines 233-235 permit an employee to use safe leave "during the time that the employee
has temporarily relocated due to the domestic violence, sexual assault, or stalking."
This provision is copied from the State law that was not enacted. It could cause significant
hardship for a small employer, but it would be limited to the amount of paid sick or safe leave an
employee may take in one year 80 hours.
Committee recommendation
(3-0): no change.
(c)
Change the phrase "disclose details" on line 246 to "disclose specific details" to avoid a
conflict with the employer's right to request verification of the use of the leave if an
employee uses more than 3 consecutive days.
Committee recommendation (3-0):
add
the language suggested on line 246 at
©
11.
Technical changes. Add an "or" at the end ofline 289 and delete "who was" on line 301.
Committee recommendation
(3-0): make the technical changes suggested.
(d)
2. Should the paid sick leave law apply to workers earning high wages?
The primary purpose of the Bill is to ensure that an employee
14
working in the County may
earn paid leave to
be
used to miss work for specific reasons. Most of the workers in the County
who cannot afford to miss work when sick (or for other reasons described
in
the Bill) are low wage
workers. The Bill mandates a one-size-fits-all paid leave program that works well for a typical
retail store worker or an office worker. However, it could create unique problems in certain
industries, such as for skilled construction labor, or for certain types of highly paid employees who
do not need or require paid leave, such as professional consultants who are paid based upon billable
hours. One solution would be to exclude an employee who is paid more than 3 times the County
minimum wage, which would be $25.20 per hour, or some other multiple of the County minimum
wage.
Committee recommendation (3-0):
reject the following staff amendment:
The Bill would apply to an employee as defined under Federal law, but not to an independent contractor. We
received a letter from a local home health business after the worksession requesting an amendment to expressly
exclude an independent contractor. See letter from Family
&
Nursing Care at ©148.
13
14
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Amend lines 83-93 as follows:
Employee does not include an individual who:
ill
CA)
does not have
~
regular work schedule with the employer;
contacts the employer for work assignments and is scheduled
Hill]]
!Ill
to work the assignments within 48 hours after contacting the
employer;
[(ill]]
(Q
[[(±}]]
(ID
!2)
·
has no obligation to work for the employer
if
the individual
does not contact the employer for work assignments; and
is not employed
by~
temporary placement agency: or
is paid more tlian 300% of the County minimum wage established under
Section 27-68.
Councilmember Rice
may introduce an amendment to exclude an employee who is under the age of
18. This amendment would be:
Amend lines 83-95as follows:
Employee does not include;
ill
an individual who:
[[ill]]
CA)
does not have
!!
regular work schedule with the employer;
contacts the employer for work assignments and is scheduled
[[ill]]
!Ill
to work the assignments within 48 hours after contacting the
employer;
has no obligation to work for the employer
if
the individual
[[ill))
(Q
[[(±}]]!ID
does not contact the employer for work assignments; and
is not employed
by!!
temporary placement agency,;,,[[m:]]
m
ill
an individual who regularly works 8 hours or less each week; or
an
individual who is
under
the age of 18 years.
3. Should the paid sick leave law apply to workers covered by a collective bargaining
agreement?
Federal law permits private sector employees to organize and bargain collectively with
their employers. These labor laws are designed to even the bargaining power between the
employer and the workers when negotiating wages and benefits. Paid leave is a mandatory subject
14
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of bargaining. Should the government step in and mandate this benefit if the parties do not
negotiate it?
The Bill would make minimum paid sick and safe leave similar to the County minimum
wage. The same public policy reasons for covering workers who are not governed by a collective
bargaining agreement would apply to a worker covered by a collective bargaining agreement who
does not earn any paid leave. While Council staff recommends limiting the Bill to low wage
workers, it is these same low wage workers who are unlikely to
be
able to bargain for adequate
leave even if they belong to a union.
Committee recommendation
(3-0): do not exclude
employees covered by a collective bargaining agreement. The Committee did amend the Bill to
change the effective date of the Bill for an employee covered by a bona fide collective bargaining
agreement in effect when the Bill takes effect until the agreement expires. See lines 313-316 at
©13.
Councilmember Navarro
may introduce an amendment to delete the new language added
on lines 314-316 which would grandfather an employee covered by a bona fide collective
bargaining agreement in effect when the Bill takes effect on October 16, 2016 until the agreement
expires. This grandfather clause is less important because the Committee Bill would now provide
an employer with 15 months to adjust the employer's leave benefits to comply with the Bill after
enactment. Councilmember Navarro's amendment would be:
This Act takes effect on October 1, [(2015]] 2016[[. or for an empl9yee covered by a bona
fide collec;,;tive bargaining agreement in effect on October 1. 2016. after
theJ~xpiration
of
the collective bargaining agreement]].
4. Should the paid sick leave law apply to employers with fewer than 10 employees?
HB 385, as introduced, would have required an employer with more ·than 9 employees to
provide paid sick and safe leave. An employer with fewer than 10 employees would only be
required to provide unpaid sick and safe leave. Bill 60-14 would require an employer with 1 or
more employees to provide paid sick and safe leave. The District of Columbia law requires an
employer with fewer than 25 employees to provide less sick leave per hour worked (1 hour for
every 87 hours worked). An employer with 25-99 employees must provide 1 hour for every 43
hours worked, and an employer with 100 or more employees must provide 1 hour for every 3 7
hours worked.
These lower requirements for small employers recognize the additional accounting and
coverage problems that Bill 60-14 may create for an employer with very few employees. However,
creating a lower standard for small employers would add the issue of how many employees an
employer has at any time to the investigation of a complaint. Requiring unpaid sick and safe leave
for very small employers does not relieve them from the accounting problem of tracking the leave
earned and used, but would avoid the problem of paying 2 people to cover the same shift.
It
would
reduce, but not eliminate, the cost of the new benefit on these employers. One size does not fit all
here. Requiring unpaid leave for an employer with fewer than 10 employees is a reasonable
compromise.
Most State and local paid sick leave laws provide an exclusion or a reduced requirement
for a very small employer. For example, the Connecticut law does not apply to an employer with
fewer than 50 employees, the Massachusetts law does not apply to an employer with fewer than
15
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11 employees, the Seattle law excludes an employer with fewer than 5 employees, the San
Francisco law requires less leave for an employer with fewer
than
10 employees, the District of
Columbia law requires less leave for an employer with fewer than 25 employees, and the
Philadelphia law requires an employer with fewer than 10 employees to provide unpaid leave. See
the Jackson Lewis comparison of other State and local laws at ©134-146.
Committee
recommendation (3-0):
do not amend the Bill to provide either an exclusion or a reduced
requirement for a small employer.
.
Councilmember Berliner
may introduce an amendment to require paid leave for an employer
with 5 or more employees and unpaid leave for an employer with fewer than 5 employees. The
amendment would be:
Amend lines 141-146 as follows:
fill
Earned sick and sate leave.
An
employer
wi1h.2.
or more employees must provide
each employee earned sick and safe leave for work performed in the County paid at
the same rate and with the same benefits as the employee normally earns. A tipped
employee must
be
paid at least the County minimum wage required under Section 27-
68 for each hour
the
employee uses earned sick and safe leave.
An
emplover with
fewer than 5 employees must provide each employee with unpaid sick and safe leave
for work perfonned in
the
County.
5. Business requests.
We received several requested amendments from businesses that have not already been
addressed. We will address them here:
(a)
Several businesses asked for a clarification that an employer's paid time off (PTO)
policy that provides the minimum number of hours of paid leave required by the
Bill would be sufficient as long as the PTO could be used for the same reasons as
sick and safe leave. Council staff believes that the language in the definition of
earned sick and safe leave on lines 78-79 at ©4 already makes this clear. In
addition, the language Council
staff
recommended under Issue la above would also
clarify this.
Committee recommendation (3-0):
no additional language needed.
The Bill would permit an employee to carry over up to 56 hours of earned sick and
safe leave to the next calendar year. Several businesses requested that this number
be reduced to 40 hours.
Committee recommendation (3-0):
no change.
(b)
Councilmember Berliner
may introduce an amendment that would permit an employer
to prohibit an employee from carrying over leave to the next calendar year if the employer
gives each employee the amount of leave that is earned in a full year at the beginning of
each year. This amendment would be:
16
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Amend lines 163-166 and 172-175 as follows:
{fil
An
employer may award earned sick and safe leave as the leave accrues during the
calendar year or may award the full amount that an employee would earn over the
entire calendar year at the beginning
of~
calendar year.
*
!f}
*
*
Unless an employer awards the full amount of earned sick and safe leave that the
employee would earn over the entire calendar
year
at
the beginning ofa calendar year.
[[An]]
an employer must permit an employee
to
required to permit an employee to
m
sick and safe leave.
(c)
m
the balance of any unused
earned sick and safe leave over to the next calendar year, but an employer must not be
over more than 56 hours of unused earned
The Bill would require an employer to give an employee a written statement of
leave earned and used with each pay stub in lines 262-264. Several businesses
requested an amendment that would permit an employer to provide notice through
an online system that can be accessed by the employee. This is reasonable.
Committee recommendation (3-0):
amend lines 262-266 at ©11 as follows:
(g)
An
employer must provide an employee with
~
written statement of
available earned sick and safe leave each time the employer
wages to the employee.
~
An
employer may satisfy this requiremrnt
fu:rough an online system where the emplovee can access their own
earned sick and safeJeave balances.
(d)
The Bill would require 1 hour of leave for every 30 hours worked without a
mandatory minimum hours worked during the year. Several businesses requested
an amendment that would exclude an employee who works less than 80 hours
during the calendar year or less than a certain number of hours per week. HB385
would have excluded an employee who regularly works 8 hours or less per week.
An
employee with this type of schedule is less likely to be forced to work when
sick.
Committee recommendation (3-0):
amend the Bill to exclude an employee
who regularly works 8 hours or less per week. See line 95 at ©5.
Lines 176-179 at ©8 would require an employer to permit an employee who begins
working outside of the County to use earned sick and safe leave accumulated for
time worked in the County. Several businesses questioned the legal authority of
the County to control the benefits provided to an employee working outside of the
County. This is part of the problem with enacting a law of this type on a County-
wide basis. The County's authority is limited to enacting a local law affecting work
performed in the County. The leave would be earned for work in the County.
(e)
17
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Although it is not free from doubt, Council staff believes this requirement is within
the County's authority.
Committee recommendation (3-0):
delete lines 176-179
at©8.
(f)
The Bill would require an employer to pennit an employee to take leave in the
smallest increment permitted by the employer, but must not require the employee
to take leave in increments of more than 1 hour. See lines 257-260 at ©11. Several
businesses requested an amendment to permit an employer to require an employee
to take leave in increments of at least 4 hours.
Committee recommendation
(3-
0):
amend the Bill to change 1 hour to 4 hours. See lines 257-261 at ©11.
The Bill, as introduced, would take effect on October 1, 2015. Several businesses
requested that the effective date for an employee covered by a collective bargaining
agreement that provides the minimum number of hours of leave take effect after the
termination of the collective bargaining agreement. This change would avoid
requiring an employer to renegotiate a collective bargaining agreement during its
term to comply with the Bill.
Committee recommendation (3-0):
amend the
effective date to October 1, 2016. See lines 313-316 at ©13.
The Bill would require an employer to reinstate any unused earned sick and safe
leave that the employee had when the employee left the employment upon rehire.
See lines 180-183 at ©8. Several businesses requested an amendment to eliminate
this provision. This would require an employer to track unused leave for employees
who are no longer with the company and could discourage an employer from hiring
back a former employee.
Committee recommendation (3-0):
amend the Bill to
require reinstatement of leave if the employee is hired back within 6 months. See
lines 180-183 at ©8.
(g)
(h)
Councilmember Hucker
may introduce an amendment to require an employer to reinstate
earned leave if the employee is hired back within 9 months. Councilmember Bucker's
amendment would be:
Amend lines 180-183 as follows:
.lill]]
If
an employee is rehired
~
an employer to work in the County within [[ 12)]
[[~]]
(21
months after leaving the employment, the employer must reinstate any
unused earned sick and safe leave that the employee had when the employee left
the employment.
Councilmember Berliner
may introduce an amendment that would limit the reinstatement
of unused leave to seasonal employees. The amendment would be:
Add the following after line 123:
Seasonal employee
means an employee with an annually recurring work period of
less than 12 months each year. A seasonal employee is a permanent employee who
18
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is placed in non-duty/non-pay status and recallec.f. to duty in accordance with pre-
established conditions of emplovment.
Amend lines 180-183 asfollows:
[[If an employee is rehired
ID:
an employer to work in the County within [[12]]
2
months after leaving the employment, the]] The employer must reinstate any
unused earned sick and safe leave that [[the]] a seasonal employee had before being
placed in non-dutvlnon-pay status when the employee [(left the]] is recalled to duty
in accordance with pre-established conditions of employment.
(i)
Several businesses also requested an exclusion for a probationary employee during
the first 90 days of employment.
Committee recommendation (3-0):
amend the
Bill to permit a probationary employee to accrue leave during the first 90 days, but
prohibit the employee from taking leave during the first 90 days. See lines
186-
189
at
©8-9.
This packet contains:
Bill
60-14
Legislative Request Report
DOL FMLA Fact Sheet
DC Accrued Sick and Safe Leave Poster
Employers' Perspectives on San Francisco's Paid Sick Leave Policy
Fiscal Note for HB 385
Fiscal and Economic Impact statement
Public Hearing Testimony
Commission on Aging
Commission for Women
Job Opportunities Task Force
Public Justice Center
Montgomery County Young Democrats
Jews United for Justice
SEIU Local 32BJ
UFCW Union Local 400
MomsRising.org
Business and Professional Women of Maryland
National Nurses United
Greater Silver Spring Chamber of Commerce
Gaithersburg-Germantown Chamber of Commerce
The Greater Bethesda-Chevy Chase Chamber of Commerce
Montgomery County Chamber of Commerce
Community Services for Autistic Adults and Children
Maryland Motor Truck Association
Restaurant Association of Maryland
Circle#
1
13a
14
18
19
38
52
60
61
64
68
71
73
74
76
77
78
80
82
90
92
94
96
98
99
19
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ConTemporaries, Inc.
Andy Kirschner
Rabbi Charles
L.
Arian
Fran Rothstein
Laura Wallace
Marcellina Flores
Mimi Hassanein
Rachel Metz
Equality Maryland
Century Distributers, Inc.
Maryland Retailers Association
Sheet Metal and Air conditioning Contractors' Mid-Atlantic Chapter
The Arc Montgomery County
National Compensation Survey, March 2014
Seattle Survey Executive Summary
Summary of2013 DC Audit
County Attorney's Bill Review Memorandum
Jackson Lewis Comparison of State and local laws
US Labor Secretary Perez statement
Letter from Family and Nursing Care
Summary of2015 DC Audit
F:\LAW\BILLS\1460 Earned Sick And Safe Leave\Action Memo.Docx
101
105
106
107
109
110
112
113
114
115
117
118
121
122
128
129
131
134
147
148
149
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Bill No.
60-14
Concerning: Human Rights and Civil
Liberties - Earned Sick and Safe
Leave
Revised: June 12. 2015 Draft No.
_7_
Introduced:
November 25. 2014
Expires:
May 25. 2016
Enacted: - - - - - - - - - -
Executive: - - - - - - - - -
Effective: - - - - - - - - -
Sunset Date: _N'-'-o=-n=e_ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council Vice President Leventhal and Councilmembers Navarro, Branson, Elrich, Riemer, and
Hucker
AN ACT
to:
(I)
(2)
(3)
(4)
require certain employers
in
the County to provide earned sick and safe leave to
certain employees working
in
the County; .
provide enforcement by the Office of Human Rights and the Human Rights
Commission or the appropriate State agency;
authorize the Human Rights Commission to award certain relief; and
generally regulate the sick and safe leave benefits provided to an employee working
in
the County for certain employers.
By amending
Montgomery County Code
Chapter 27, Human Rights and Civil Liberties
Sections 27-7
and
27-8
By adding
Montgomery County Code
Chapter 27, Human Rights and Civil Liberties
Article XIII, Earned Sick and Safe leave
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface bracketsD
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deleted.from existing law or the bill by amendment.
Existing law unqffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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BILL NO. 60-14
1
Sec.1.
Sections 27-7 and 27-8 are amended and Chapter 27, Article
2
XIII is added as follows:
27-7. Administration and enforcement.
(a)
Filing complaints.
Any person subjected to a discriminatory act or
3
4
5
practice in violation of this Article.1 or any group or person seeking to
enforce this Article or Articles X, XI, [or] XII, or XIII may file with the
Director a written complaint, sworn to or affirmed under the penalties of
perjury, that must state:
( 1)
(2)
the particulars of the alleged violation;
the name and address of the person alleged to have committed the
violation; and
(3)
any other information required by law or regulation.
6
7
8
9
10
11
12
13
14
15
(
f)
*
( 1)
*
*
Initial determination, dismissal before hearing.
The Director must determine, based on the investigation, whether
reasonable grounds exist to believe that a violation of this Article
or Articles X, XI,
[QI]
XII, or XIII occurred and promptly send
the determination to the complainant and the respondent.
16
17
18
19
(2)
If
the Director determines that there are no reasonable grounds to
20
believe a violation occurred, and the complainant appeals the
determination to the Commission within 30 days after the
· Director sends the determination to the complainant, the Director
promptly must certify the complaint to the Commission. The
Commission must appoint a case review board to consider the
appeal. The board may hear oral argument and must:
(A)
(B)
dismiss the complaint without a hearing;
order the Director to investigate further; or
21
22
23
24
25
26
27
(i)
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BILL
No. 60-14
28
29
30
31
32
33
34
35
(C)
set the matter for a hearing by a hearing examiner or the
board itself, and consider and decide the complaint in the
same manner as if the Director had found reasonable
grounds to believe that a violation of this Article or
Articles X, XI,
[Qr]
XII, or XIII occurred.
(3)
If
the Director determines that there are reasonable grounds to
believe a violation occurred, the Director must attempt to
conciliate the matter under subsection (g).
36
*
27-8. Penalties and relief.
(a)
*
*
37
38
Damages and other relieffor complainant.
After finding a violation
of this Article or Articles Xl. [or] XIl. or XIII, the case review board
may order the payment of damages (other than punitive damages) and
any other relief that the law and the facts warrant, such as:
39
40
41
42
*
(2)
*
*
43
44
equitable relief to prevent the discrimination or the violation of
Articles Xl. [or] Xll. or XIII and otherwise effectuate the purposes
of this Chapter;
45
46
*
(4)
*
*
47
48
49
50
any other relief that furthers the purposes of this Article or
Articles
X,.
[or] Xll. or XIII or is necessary to eliminate the effects
of any discrimination prohibited under this Article.
*
27-76.
Findings and Definitions.
*
*
51
ARTICLE XIII. Earned Sick and Safe leave.
52
53
W
Findings.
F:\LAW\BlLLS\1460
Earned
Sick And Safe Leave\Bill 7.Doc
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BILL No.
60-14
54
55
56
ill
ill
Many persons employed in the County do not receive earned sick
and safe leave.
The absence of earned sick and safe leave often results in the
unnecessary spread of disease in the County when:
(A)
an employee without earned sick and safe leave is forced
to work while
ill;.
or
ill)
~
57
58
59
60
parent without earned sick and safe leave is forced to
61
send
~
sick child to day care or school.
62
63
ill
Minimum standards for earned sick and safe leave in the County
are necessary to:
(A)
ill)
promote the health and welfare of County residents;
safeguard employers and employees against unfair
competition;
64
65
66
67
.{g
(D)
increase the stability of industry in the County; and
decrease the need for the County to spend public money
for the relief of employees who also live in the County.
68
69
70
71
.ili)
Definitions.
As used in this Article:
Abuse
has the meaning defined in Section 4-501 of the Family Law
72
73
Article of the Maryland Code, as amended.
Director
means the Executive Director of the Office of Human Rights
74
75
76
and includes the Executive Director's designee.
Domestic violence
means abuse
against~
person
eligible for relief.
Earned sick and safe leave
means paid leave away from work that is
77
78
79
80
provided
.Qy
an employer under §27-77 and can be used for the purposes
described in §27-79. Earned sick and safe leave includes paid time off
that can be used
.Qy
the employee for any purpose.
Employ
means to
engage~
person to
work for compensation.
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BILL No. 60-14
81
82
83
Employee
means any person permitted or instructed to work or be
present by an employer in the County, including
~
domestic worker as
defined in Section l l-4B(b). Employee does not include:
84
ill
an individual who:
85
86
87
88
[[ill]]
(A)
[[(l}]]
does not have
~
regular work schedule with the
employer;
an
contacts the employer for work assignments and is
scheduled to work the assignments within 48 hours after
contacting the employer;
89
90
91
[[ill]]
(Q
has no obligation to work for the employer if the
individual does not contact the employer for work
assignments; and
92
93
94
[[@]]
(D)
is not employed by
~
temporary placement agency;
95
!l)
·
an individual who regularly works 8 hours or less each week.
96
97
Employer
means any person, individual, proprietorship, partnership,
ioint venture, corporation, limited liability company, trust, association,
or other entity operating and doing business in the County that employs
98
99
100
l
or more persons in the County in addition to the owners. Employer
includes the County government, but does not include the United States,
any State, or any other local government.
101
102
103
Family member
means:
ill
ill
ill
~
biological child, adopted child, foster child, or stepchild of the
104
105
106
107
employee;
~
child for whom the employee has legal or physical custody or
guardianship;
~
child for whom the employee is the primary caregiver;
(j)
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BILL
No.
60-14
108
109
110
111
ill
ill
®
ill
.(fil
~biological
parent, adoptive parent, foster parent, or stepparent of
the employee or the employee's spouse;
the legal guardian of the employee;
an individual who served as the pnmary caregiver of the
employee when the employee was
~
minor;
the spouse of the employee;
~
112
113
114
grandparent of the employee;
115
116
117
.(2)
.QQ)
.QD
the spouse
of~
grandparent of the employee;
~
grandchild of the employee;
adopted, or foster sibling of the employee; or
~
~biological,
118
119
.Q1)
the spouse of
biological, adopted, or foster sibling of the
employee.
Health care provider
means an individual licensed under State law to
120
121
122
123
124
125
126
provide medical services.
Person eligible tor reliefhas
the meaning stated in Section 4-501 of the
Family Law Article of the Maryland Code, as amended.
Sexual assault
means:
ill
rape, sexual offense, or any other act that is
~
sexual crime under
Title
Ii
Subtitle
J
of the Criminal Law Article of the Maryland
127
128
129
130
131
132
133
134
Code, as amended;
ill
ill
child sexual abuse under Section 3-602 of the Criminal Law
Article of the Maryland Code, as amended; or
sexual abuse of
~
vulnerable adult under Section 3-604 of the
Criminal Law Article of the Maryland Code, as amended.
Stalking
has the meaning stated in Section 3-802 of the Criminal Law
Article of the Maryland Code, as amended.
Tipped employee
means an employee who:
(!)
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BILL
No. 60-14
135
136
137
ill
ill
ill
27-77.
is engaged in an occupation in which the employee customarily
and regularly receives more than $30 each month in tips;
has been infonned
.Qy
the employer about the provisions of this
Section; and
has kept all of the tips that the employee received.
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
Earned Sick and Safe Leave Reg uired.
w
Earned sick and safe leave.
An employer must provide each employee
earned sick and safe leave for work perfonned in the County paid at the
same rate and with the same benefits as the employee nonnally earns.
A tipped employee must be paid at least the County minimum wage
required under Section 27-68 for each hour the employee uses earned
sick and safe leave.
.(hl
Rate
gf
Accrual.
The earned sick and safe leave provided under
subsection
W
must accrue at
~
rate of at least
1
hour for every 30 hours
an employee works in the County, except an employer must not be
required to allow an employee to:
ill
ill
.{£}
earn more than 56 hours of earned sick and safe leave in
~
calendar year; or
use more than 80 hours of earned sick and safe leave in
calendar year.
~
Retaliation prohibited.
A person must not:
ill
retaliate against any person for: .
(A)
lawfully opposing any violation of this Article; or
filing
~
complaint, testifying, assisting, or participating in
any manner in an investigation, proceeding, or hearing
under this Article; or
®
ill
obstruct or prevent enforcement or compliance with this Article.
(j)
F:\LAW\BlLLS\1460
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BILL
No. 60-14
162
163
164
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168
169
170
171
172
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174
175
176
177
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179
180
181
182
183
184
185
186
187
27-78.
Minimum Earned Sick and Safe Leave Standards.
.w
An
employer may award earned sick and safe leave as the leave accrues
during the calendar year or may award the full amount that an employee
would earn over the entire calendar year at the beginning
year.
of~
calendar
.{Q)
To calculate the rate of accrual of earned sick and safe leave for an
employee who is exempt from the overtime provisions of the Federal
Fair Labor Standards Act, the employer must assume the employee
worked the number of hours worked in
hours each workweek.
~
normal workweek
!ill
to 40
~
An
employer must permit an employee to
m
ne~t
the balance of any
calendar year, but an
unused earned sick and safe leave over to the
employer must not be required to permit an employee to
more than 56 hours of unused earned sick and safe leave.
m
over
@
[[If
an employee begins working outside the County for the same
employer, the employer must permit the employee to use the earned
sick and safe leave that accrued while working for the employer in the
County.
W11
If
an employee is rehired
by
an employer to work in the County within
H12]]
Q
months after leaving the employment, the employer must
reinstate any unused earned sick and safe leave that the employee had
when the employee left the employment.
[[ill]]~
An
employer may permit an employee to use earned sick and safe
leave before the amount needed
by
the employee accrues.
ill
An
employer must permit an employee to earn sick and safe leave
during an initial 90-day probationarv period. but may prohibit an
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BILL
No. 60-14
188
189
190
191
192
193
194
195
196
employee from using earned sick and safe leave during an initial 90-day
probationary period.
(gl
This Article must not be construed to:
ill
require an employer to compensate an employee for unused
earned sick and safe leave when the employee leaves the
employer's emplovment:
ill
prohibit an employer from adopting or retaining a general paid
leave policy that meets the minimum requirement of this Article;
or
197
198
199
ill
affect a prov1s10n of a 90ntract. a collective bargaining
agreement. an employee benefit plan. or any other agreement that
requires the employer to provide general paid leaye benefits that
meet the minimum requirements of this Article.
200
201
27-79.
Use of Earned Sick and Safe Leave.
202
203
204
ill
An
employee may use earned sick and safe leave:
ill
ill
to care for or treat the employee's mental or physical illness,
injury, or condition;
to obtain preventive medical care for the employee or the
employee's family member;
205
206
207
208
ill
ill
ill
to care
for~
family member
with~
mental or physical illness,
injury, or condition;
if the employer's place of business
has
closed
Qy
order of
public official due to
~
public health emergency;
if the school or child care center for the employee's family
member is closed
Qy
order of
~
public official due to
health emergency;
~
~
209
210
211
212
213
public
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BILL No. 60-14
214
215
216
217
218
219
220
221
222
223
224
225
226
227
228
229
230
231
232
233
234
235
236
237
238
239
®
to care for
~
family member if
~
health official or health care
provider has determined that the family member's presence in the
community would jeopardize the health of others because of the
family member's exposure tog communicable disease; or
ru
if the absence from work is due to domestic violence, sexual
assault, or stalking committed against the employee or the
employee's family member and the leave is used:
(A)
Qy
the employee to obtain for the employee or the
employee's family;
ill
medical attention needed to recover
from~
physical
or psychological injury due to domestic violence,
sexual assault, or stalking;
(ii)
serviees from g victim services organization related
to the domestic violence, sexual assault, or stalking;
services,
.
including
preparmg
for
or
participating in
g
civil or criminal proceeding related
to the domestic violence, sexual assault, or stalking;
or
.(Ill
during the time that the employee has temporarily
relocated due to the domestic violence, sexual assault, or
stalking.
(Q)
To use earned sick and safe leave, an employee must:
ill
request leave from the employer as soon as practicable after the
employee determines that the employee needs to take leave;
rn
notify the employer of the anticipated duration of the leave; and
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BILL
No. 60-14
240
241
242
243
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246
247
248
249
250
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252
253
254
255
256
257
258
259
260
261
262
ill
comply with any reasonable procedures established
.Qy
the
employer when requesting and taking leave.
W
An
employer must not require an employee who requests earned sick
and safe leave to search for or find an individual to take the employee's
place while the employee takes leave.
@
An
employer must not require an employee to:
ill
disclose specific details of the mental or physical illness, injury,
or condition of the employee or the employee's family member;
or
ill
provide as certification any information that would violate the
Federal Social Security Act or the Federal Health Insurance
Portability and Accountability Act.
W
fu
mutual consent of the employee and the employer, the employee
may work additional hours or trade shifts with another employee during
~ ~
period to make gp the amount of work hours that the employee
missed for which the employee could have used earned sick and safe
leave.
ill
An
employee may take earned sick and safe leave in the smallest
increment that the employer's payroll system uses to account for
absences or work time, except that an employee must not
be
required to
take earned sick and safe leave in an increment of more than
[[l
hour]]
4 hours.
.(g)
An
employer must provide an employee with
~
written statement of
263
264
265
266
available earned sick and safe leave each time the employer
~
wages
to the employee.
An
employer may satisfy this requirement through an
online system where the employee can access their own earned sick and
safe leave balances.
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BILL
No. 60-14
267
268
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274
275
276
277
278
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283
284
285
286
287
288
289
290
291
292
293
27-81.
27-80.
®
An
employer may reqmre an employee who uses more than
1
consecutive days of earned sick and safe leave to :Qrovide reasonable
documentation to verify that the leave was used appropriately.
Notice.
w
(hl
An
employer must notify the employees that they are entitled to earned
sick and safe leave under this Article.
The notice must include:
ill
ill
£! statement of how earned sick and safe leave is accrued;
the permitted uses of earned sick and safe leave;
£! statement that the employer must not retaliate against an
employee for exercising the rights granted
by
this Article; and
m
{i}
information about the employee's right to file£! complaint with
the Director
for~
violation of any rights granted
by
this Article.
(£}
The Director must create and publish
~
model notice in English,
Spanish, and any other language that the Director finds is necessary that
may be used
by
an employer to comply with subsection
021
{ill
An
employer may provide notice by:
ill
displaying the model notice or another notice containing the same
information in
~
conspicuous and accessible area at each of the
employer's work locations in the County;
ill
including the model notice or another notice containing the same
information in an employee handbook or other written guidance
distributed to all employees; or
ru
w
distributing the model notice or another notice containing the
same information to each employee when the employee is hired.
Records.
An
employer must keep, for at least
1
years,
~
record of:
@
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BILL NO. 60-14
294
295
296
297
298
299
300
301
302
303
304
305
306
307
308
309
310
311
312
ill
earned sick and safe leave accrued
Qy:
each employee; and
earned sick and safe leave used
Qy
each employee.
~
m
.Qi)
After giving the employer notice and determining
mutually agreeable
time for the inspection, the Director may inspect
f!
record kept under
subsection
W
for the purposes of determining whether the employer is
complying with this Article.
27-82.
Enforcement.
W
A covered employee [[who was]] who did not receive earned sick and
safe leave in violation of this Article may file
!!
complaint with the
Director under Section 27-7.
.Qi)
The County Executive may delegate the authority to enforce this Article
to
~
State agency that is legally authorized to enforce the County earned
sick and safe leave requirements.
Sec. 2.
Transition.
Notwithstanding Section 27-77, as added in Section 1, earned sick and
safe leave must begin to accrue for all work performed in the County on or after
October 1, [[2015]] 2016.
An
employer must not be required to permit an employee
to accrue earned sick and safe leave for hours worked before October 1, [[2015]]
2016.
313
314
315
316
317
Sec. 3.
Effective Date.
This Act takes effect on October 1, [[2015]] 2016. or for
an
employee covered
by a bona fide collective bargaining agreement in effect on October 1. 2016. after the
expiration of the collective bargaining agreement.
Approved:
318
George Leventhal, President, County Council
Date
F:\LAW\BILLS\1460
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Sick And Safe Leave\Bill 7.Doc
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LEGISLATIVE REQUEST REPORT
Bill 60-14
Human Rights and Civil Liberties Earned Sick and Safe Leave
DESCRIPTION:
Bill 60-14 would require an employer operating and doing business
in
the County to provide earned sick and safe leave to each employee
for work performed
in
the County. Earned sick and safe leave is paid
leave away from work that can be used for the injury or illness of the
employee or the employee's immediate family or due to domestic
violence suffered by the employee or the employee's immediate
family. Earned sick and safe leave would also include paid time off
that can be used by the employee for any purpose.
Many employees in the County are forced to come to work when
they are
ill
because they do not have paid sick leave.
The goal is to reduce the number of employee who are forced to
come to work when
ill
or send sick children to school or day care
because they have no paid sick leave.
Office of Human Rights
To be requested.
To be requested.
To be requested.
Local paid sick leave laws have been enacted
in
several jurisdictions,
including the District of Columbia and San Francisco.
Robert H. Drummer, Senior Legislative Attorney
To be researched.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
Compensatory damages and equitable relief.
f:\law\bills\1460 earned sick and safe leave\lrr.doc
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U.S.
Department of Labor
Wage and Hour Division
511HD
{Revised 2012)
Fact Sheet #28: The Family and Medical Leave Act
The Family and Medical Leave Act (FMLA) entitles eligible employees of covered employers to take
unpaid, job-protected leave for specified family and medical reasons. This fact sheet provides general
information about which employers are covered by the FMLA, when employees are eligible and entitled
to take FMLA leave, and what rules apply when employees take FMLA leave.
COVERED EMPLOYERS
The FMLA only applies to employers that meet certain criteria. A
covered employer
is a:
Private-sector employer, with 50 or more employees in 20 or more workweeks in the current or
preceding calendar year, including a joint employer or successor in interest to a covered
employer;
Public agency, including a local, state, or Federal government agency, regardless of the number
of employees it employs; or
Public or private elementary or secondary school, regardless of the number of employees it
employs.
ELIGIBLE EMPLOYEES
Only eligible employees are entitled to take FMLA leave. An
eligible employee
is one who:
Works for a
covered employer;
Has worked for the employer for at least
12 months;
Has at least
1,250 hours
of service for the employer during the 12 month period immediately
preceding the leave*; and
Works at a location where the employer has at least
50 employees within 75 miles.
*
Special hours of service eligibility requirements apply to airline flight crew employees.
See
Fact Sheet
28J: Special Rules
for
Airline Flight Crew Employees under the Family and Medical Leave Act.
The 12 months of employment do not have to be consecutive. That means any time previously worked
for the same employer (including seasonal work) could, in most cases, be used to meet the 12-month
requirement.
If
the employee has a break in service that lasted seven years or more, the time worked
prior to the break will not count
unless
the break is due to service covered by the Uniformed Services
Employment and Reemployment Rights Act (USERRA), or there is a written agreement, including a
collective bargaining agreement, outlining the employer's intention to rehire the employee after the
break in service.
See
"FMLA Special Rules for Returning Reservists".
LEAVE ENTITLEMENT
Eligible employees may take up to
12 workweeks
of leave in a 12-month period for one or more of the
following reasons:
FS28
 PDF to HTML - Convert PDF files to HTML files
The birth of a son or daughter or placement of a son or daughter with the employee for adoption
or foster care;
To care for a spouse, son, daughter, or parent who
has
a serious health condition;
For a serious health condition that makes the employee unable to perform the essential functions
of his or her job; or
For any qualifying exigency arising out of the fact that a spouse, son, daughter, or parent is a
military member on covered active duty or call to covered active duty status.
An
eligible employee may also take up to
26 workweeks
ofleave during a "single 12-month period" to
care for a covered servicemember with a serious injury or illness, when the employee is the spouse, son,
daughter, parent, or next of kin of the servicemember. The "single 12-month period" for military
caregiver leave is different from the 12-month period used for other FMLA leave reasons.
See
Fact
Sheets 28F: Qualifying Reasons under the FMLA and 28M: The Military Family Leave Provisions
under the FMLA.
Under some circumstances, employees may take FMLA leave on an intermittent or reduced schedule
basis. That means an employee may take leave in separate blocks of time or by reducing the time he or
she works each day or week for a single qualifying reason. When leave is needed for planned medical
treatment, the employee must make a reasonable effort to schedule treatment so as not to unduly disrupt
the employer's operations.
If
FMLA leave is for the birth, adoption, or foster placement of a child, use of
intermittent or reduced schedule leave requires the employer's approval.
Under certain conditions, employees may choose, or employers may require employees, to "substitute"
(run concurrently) accrued paid leave, such as sick or vacation leave, to cover some or all of the FMLA
leave period. An employee's ability to substitute accrued paid leave is determined by the terms and
conditions of the employer's normal leave policy.
NOTICE
Employees must comply with their employer's usual and customary requirements for requesting leave
and provide enough information for their employer to reasonably determine whether the FMLA may
apply to the leave request. Employees generally must request leave 30 days in advance when the need
for leave is foreseeable. When the need for leave is foreseeable less than 30 days in advance or is
unforeseeable, employees must provide notice as soon as possible and practicable under the
circumstances.
When an employee seeks leave for a FMLA-qualifying reason for the first time, the employee need not
expressly assert FMLA rights or even mention the FMLA.
If
an employee later requests additional leave
for the same qualifying condition, the employee must specifically reference either the qualifying reason
for leave or the need for FMLA leave.
See
Fact Sheet 28E: Employee Notice Requirements under the
FMLA.
Covered employers must:
(1)
Post a notice explaining rights and responsibilities under the FMLA (and may be subject to a
civil money penalty of up to $110 for willful failure to post);
Include information about the FMLA in their employee handbooks or provide information to
new employees upon hire;
2
(2)
 PDF to HTML - Convert PDF files to HTML files
(3)
When an employee requests FMLA leave or the employer acquires knowledge that leave may be
for a FMLA-qualifying reason, provide the employee with notice concerning his or her eligibility
for FMLA leave and his or her rights and responsibilities under the FMLA; and
Notify employees whether leave is designated as FMLA leave and the amount of leave that will
be deducted from the employee's FMLA entitlement.
(4)
See
Fact Sheet 28D: Employer Notice Requirements under the FMLA.
CERTIFICATION
When an employee requests FMLA leave due to his or her own serious health condition or a covered
family member's serious health condition, the employer may require certification in support of the leave
from a health care provider. An employer may also require second or third medical opinions (at the
employer's expense) and periodic recertification of a serious health condition.
See
Fact Sheet 28G:
Certification of a Serious Health Condition under the FMLA. For information on certification
requirements for military family leave,
See
Fact Sheet 28M(c): Qualifying Exigency Leave under the
FMLA; Fact Sheet 28M(a): Military Caregiver Leave for a Current Servicemember under the FMLA;
and Fact Sheet 28M(b): Military Caregiver Leave for a Veteran under the FMLA.
JOB RESTORATION AND HEALTH BENEFITS
Upon return from FMLA leave, an employee must be restored to his or her original job or to an
equivalent job with equivalent pay, benefits, and other terms and conditions of employment. An
employee's use ofFMLA leave cannot be counted against the employee under a "no-fault" attendance
policy. Employers are also required to continue group health insurance coverage for an employee on
FMLA leave under the same terms and conditions as if the employee had not taken leave.
See
Fact Sheet
28A: Employee Protections under the Family and Medical Leave Act.
OTHER PROVISIONS
Special rules apply to employees oflocal education agencies. Generally, these rules apply to
intermittent or reduced schedule FMLA leave or the taking of FMLA leave near the end of a school
term.
Salaried executive, administrative, and professional employees of covered employers who meet the Fair
Labor Standards Act (FLSA) criteria for exemption from minimum wage and overtime under the FLSA
regulations, 29 CFR Part 541, do not lose their FLSA-exempt status by using any unpaid FMLA leave.
This special exception to the "salary basis" requirements for FLSA' s exemption extends only to an
eligible employee's use ofFMLA leave.
ENFORCEMENT
It is unlawful for any employer to interfere with, restrain, or deny the exercise of or the attempt to
exercise any right provided by the FMLA. It is also unlawful for an employer to discharge or
discriminate against any individual for opposing any practice, or because of involvement in any
3
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proceeding, related to the FMLA.
See
Fact Sheet 77B: Protections for Individuals under the FMLA. The
Wage and Hour Division is responsible for administering and enforcing the FMLA for most employees.
Most federal and certain congressional employees are also covered by the law but are subject to the
jurisdiction of the U.S. Office of Personnel Management or Congress.
If
you believe that your rights
under the FMLA have been violated, you may file a complaint with the Wage and Hour Division or file
a private lawsuit against your employer in court.
For additional information, visit our Wage and Hour Division Website:
http://www.wagehour.dol.gov and/or call our toll-free information and helpline, available 8 a.m. to
5 p.m. in your time zone, 1-866-4-USWAGE (1-866-487-9243).
This publication is for general information and is not to be considered in the same light as official
statements of position contained in the regulations.
U.S. Department of Labor
Frances Perkins Building
200 Constitution Avenue, NW
Washington, DC 20210
1-866-4-USWAGE
TTY: 1-866-487-9243
Contact Us
4
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OFFICIAL NOTICE
(Post Where Employees Can Easily Read)
AVISO OFICIAL
(Publicar en un lugar en que pueda ser leido
f~cilmente
por los empleados)
Accrued Sick and Safe Leave Act of 2008
(rhls l""lor lllcloots provl•lott:t ol" !ht i,;....,.d Sklumd Sat. l""'n
Alntnd"""'l
Aclof l013, <lft<lh'<
l'ebr"*ry
22, 2014)
Ley de Licencia por
I~nfermedad
y
Seguridad Generada (ASSLA) de 2008
(1'8tE!
nf1dre lncluyt
dii1pe.1i;idonff dit
ta
•IJl<llU
de:id•
ul
22 de
ftbrero
2014)
l..i'y
MOOiiicath
1
a
d~
tk-..nda
par
Enfenu«tad
y
Stgurirlad Generada
de
20B.
REQUIRES EMPLO\'ERS IN THE DISTRICT OF COLUMBIA TO PROVIDE PAID LEAVE TO
EMPLOYEES FOR THEIR OWN OR FAMILY MEMBERS' ILLNESSES OR MEDICAL
APPOINTMENTS AND FOR ABSENCES ASSOClATED
wm1
DOMESTIC VIOLENCE OR
SEXUAL ABUSE.
EMPLOYERS REQUIRED TO COMPLY WITH THE ACT
Pursuant
to
the Accrued Sick
and
Safe Leave Act of
2008, all
employers
iii
the District of Columbia must
provide paid leave to each employee. including employees of restaurant• and bars and temporary and pan-
time employees.
OBLIGA A LOS EMPLEADORES DEL DISTRl'fO DE COI,tJMBlA A OTORGAR LlCENCIA
PAGA
A
LOS EMPLEADOS
EN
CASO DE ENFERMEDAD
0
CONSULTAS MEDlCAS
PROPIA.~
0
DE SUS FAMILlARES Y DE AUSENCIAS RELACIONADAS CON VIOLENCIA DOl\rEsTICA
0
ABUSO SEXUAL.
LOS EMPLEADORl!:S QUE DEBEN CUMPLl.R CON LA LEY
D~
conforntidad con la Ley
de
Licencia por Enfermedad
y
Seguridad Gencrada de
2008
(Accn1ed Sick and
Safe Leave Act of
2008),
todos los empleadorcs del Distrito
de
Columbia deben oiorgar licencia paga a tooos
sus empleados, incluyendo a los empleados de restaurantes
y
hares
y
a
los empleados temporarios
y
de ticmpo
pardal.
ACCRUAL START DATE
Paid leave accrues at
the
beginning of employment, provided that
the
acerual need not con1mence prior to
November 13, 2008 and provided that
an
emplo}..,r need
not
allow accrual of paid leave for tipped
resumrant
or bar employees prior to February 22,
2014.
Paid leave accrues on an c1nployer's established pay period.
n:cHA DE
INICIO DE LA GENERACION
La liccncia paga comlenza a generarsc
al
inicio del empleo, ,,iempre que no deha
comenzar a geneTll!C!C
antes
de!
13
de
noviembre
de
2008
y
siempre que el empleador
no
deba permitir la generad6n
de
licencia paga para
empleado.•
de
restaurante o bar con propina antes
def 22 d•
febrero d"
2014.
La
Jiccncia paga sc acumula en el perlodo
de
pago establecido por un emplerulor.
Debera pemtitirse utilizar la ticencia paga
al
empl•ado a
mas
tardar • !os
90
dlas de su scrvicio con el
empleru:tor. Un empleado
podrli
utilizar la licencia con
un
aviso eon poca onticipaci6n si el nmtivo de
la
liccncia
c~
imprevisible.
ACCESSL'IG PAID LEAVE
An employee must be allowed to use paid leave no later than after
90
days of service with the employer. An
employee may use leave on short notice if
the
reason for leave is unfore>eeable.
F'ECHA DE lNICIO DE l,A UCENCIA ACUMULADA
NUMBER
OF HOURS ACCRUF.J)
Accrual of paid leave is detennined by the type
of
business,
the
number
of
employees
an
employer has, and
tbe
number of hours on employee works. For tipped employees of restaurnnts or
bani,
reganlless of the
number of employees the employer has, each tipped employee must
uccrue
at least
one
(l)
hour per
43
hours
worked, up to five
(5)
days per calendar
year.
For all
other
employers. use
the
following chart:
NUMERO DE HORAS ACUMULADAS
n~mero
de empleados con
que cuenta el empleador y el mlmem de horns trabajadas por el emplewlo. P11ra empleados de restaunmtes
y
bare•
<'On
propina, indepemlientemente de! nllmero de empleados con que cuente el empleador, cada
empleado con propina debenl acumular al menos una
(1)
hora cada
43
horas trAbajadas, con hasta cinco
(5)
dl'.as
por aflo
calendario. Para el resto de
los empleadores,
se
debera
utilizar
la
siguiente lllhla:
La
acumulaci6n de la licencia paga se determina
de
acucrdo al
ti
po
de
negocio, el
..
ll
an
empl&yer
has .••
~.
100
or more
employees
Employees
accrue at lent...
1
hour per 37
hours
worked
1 hour
per
43 hours worked
I hour
per
87 hours wodced
Not to Exued •••
i
days
per
calendar year
5
days per calendar year
3 days per calendar year
Si un empleadnr cuenta ron
...
LWI empreados acumulan
al
ment>S
I hora por cadu 37 horas trabajadas
I
horn
por cada 43 horas trabajodas
l hora por cada R7 boras trabajadas
...
Sin
exceder
""
25 to 99 employees
Less than 25 employe..s
100
o m:b empleados
25 a
9')
empleudo•
Menos
de
25 cmpleados
1
dias por ailo calendario
5
dfas por niio calendario
3 dlas por aiio calcndario
UNUSED LEAVE
Under this Act, an employee's accrued paid sick leave carries over from ycer
to
year. Employers do not have
to
pay employees for unused paid sick leave upon termination or resignation of employment.
LICENCIA NO UTILIZADA
De
acuertlo a esta Ley,
la
licencia con goce de pago devengudu por un empleudo se
lrllll>fiere
de un afio
al
siguiente.
Loo
empleadores no debernn pagar a Jos empleados por las licendas por enfemtedrul no utilizadas al
momento de la terminacion de! empleo o renuncia al mismo.
EMPLOYEE PROTECTION
Under the Act, employees who
assert
their rights
to
receive paid sick leave or provide information or
as•istance to help enforce the Act are
pml<?Cted
from retaliation.
PROTECCION
DEL
EJl.IPLEAOO
De
ucuerdo a la Ley, los empltndos que hagun valer sus derechos a recibir licenda por enfermedad paga o
propon:ioneu infonnnci6n o asistencia
pm
ayudar a hacer cumplir la Ley estiln protegidos contra represalias.
ENFORCEMENT
The
DC Deparuncnt of Employment Services, Office of Wage and Hour can investigate possible violations,
ucceliS employer records, enforce the paid sick leave requirement., onler reinstatenient of employees who are
tenninnted, as a result of assening rights
to
paid sick leave. order payment of paid sick leave unlawfully
withheld,
and
impose
penalties.
An employer who willfully violates the requirements uf the Act shall
be
llSSessed a civil pennlty in the amount
of one thousand dollar.
($1,000)
for the first offense. fifreen hundred dollars
($1,500)
for the second offense,
and two thousand dollars
($2,000)
for the third lllld any subsequent offen5e$.
CUMPUMIENTO DE DICHA LEY
El Departamento de Servicios de Empleo del Distrito de Columbia, Oficina de Salarios y HoTlls (DC
Department of Employment Services, Office of Wage and Hour) puede investigar posibles violaciones,
acceder a los registros
de
!os empleadores, haccr cumplir las ohligaciones
de
liccncia
f"'C
enfem1edad paga,
ordm11r el reintegro
de
empleados que hayan sido despedidos como resultado
de
la afirmaci6n de los
derecbos
de
licencia por enfennedad paga, ordenar el pago
de
licendas por enfermedad pagn negadas ilegalmente e
imponer ttanciones.
Un cmplcadnr que intencionalmente violc los requisitos de la Ley sera ohjeto de una multa civil
por
el importe
de mil d61ares
($1,000)
por la primera infrocci6n, mil quinientos d6lares
($1,.SOO)
por la segunda infraccion, y
dos mil d61ares ($2,000) para la tercera infracci611
y
subsiguiente$.
TO •'ILE A COMPLAl!li"l' OR FOR ADDIDONAL IN•'ORMATl()N
To
request full text of the Act.
to
obtain a copy of the rub """°"iated with this Act, to receive the Act
lnlrullated into other languages, or to
file
a complaint, visit
l!!!!.l'l_&f.Q!'~,fi<;_,ggY,,
call the Office of Wage and
Hour
at
(202) 1;11-1880, or visit at .W58 Minnesota Avenue, N.E., Suite 4300. Wa.•hington, D.C. 20019.
Complaint• shall
be
filed
within three (3) yellfll after
tbe
event on which the complaint is based unless the
employer has
failed
to
p<JSt notice of the Act.
PARA PRESENTAR UNA RECLAMACION
0
POR INFORMACION ADICIONAL
Para solidtar el texto completo de la Ley. para obtener una copia de 1.. reglnmen!Jlciones asocindas a esta
Ley. para recibir la Ley traducida a otros idiomas, o pa111 presentar una reclamaci6n. visite www.does.dc.gov,
ltame a
la
Oficina de Salarios y Hora• (Office of Wage and Hour) al (202) 671-1880. o concurra
persnnalmente a
4058
Minnesota Avenue, NE, Suite 4300, Wa,hington, DC 20019. Las rcclamacioncs
deber.m
ser prese.ntadas dentrn
de
los tres (3) aiios despues del event<> en el que se basa
ln
r<'t:lamaci6n a
menos que el empleador ha ya omitido publicar el aviso de la
I..e.y.
REVISED February 22, 2014
REVISADO
febrero 22, 2014
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mployers'
ect1ves on
an Francisco's
Pai
Sick
eave Policy
Shelley
Ula:ters Boots, Karin Martinson,
and Anna Danziger
Low-lncon1e
Working Families
Paper 12
March2009
I!
The Urban Institute
2100 M Street, NW
Washington, DC 20037
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Copyright© March 2009. The Urban Institute. All rights reserved. Except fur short quotes, no pan of this paper
may
be repro-
duced in any form or used in any form
by
any means, electronic or mechanical, including photocopying, recording, or by infor-
mation storage or retrieval system, without written permission from the Urban Institute.
This
report is part of the Urban Institute's Low-Income Working Families project, a multiyear effim thar focuses on the private-
and public-sector contc:xrs for families' success or failure. Both contexts offer opportunities for better helping families meet their
needs.
The Low-Income Working Families project
is
currently supported by The Annie E. Casey Foundation and The John D. and
Catherine
T.
MacArthur Foundation.
The authors wish
to
thank the employers who cook \·aluable time to parricivate in chis srudy. In addition, nwnerous business asso-
ciation leaders,
city
officials and labor advocates spent time providing their perspectives and helping identify respondents for this
study. In particular, the authors thank Jim Wunderman of the Bay Area Council and Netsy Firestein of the Labor Project for Work-
ing Families for reviewing a draft of the report. Pam Loprest and Margaret Simms also provided hdpful suggestions to earlier
dr-afts. The authors are also gmeful to Heidi Johnson for her excellent assistance on the site visit.
The nonpartisan Utban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The
views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or
its
funders.
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CONTENTS
San Francisco Ordinance and Context
About This
Study
3
4
Employer Strategies for Implementing Paid Sick leave
Expanding Leave for All or Some Employees
E.stablishing a Paid Time Off Policy
5
5
6
6
Replacing Other Benefits and/or Compensation with Sick Leave
Changing Accrual
Rates
and Probationary Periods
7
Employer Experiences Implememing the Paid Sick Leave Ordinance
Summary
Notes
References
7
12
13
15
17
About the Authors
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E.MPLOYERS' PERSPECTIVES
ON SAN FRANCISCO'S
PAID SICK LEAVE POLICY
Over che past several years, paid sick leave has become an important issue on the policy stage.
1
A
2004
report by the Institute for Women's Policy Research helped thrust sick leave into the spotlight when it
found that 49 percent of all workers were unable to take paid sick leave for themselves or for sick funily
members (Lovell 2004). Other research has confirmed that an even greater share of the workforce--
54 percent--<:annot take time off from work to care for sick children \vithout losing pay or using vacation
time (Galinsky, Bond, and Hill 2004). Eighty-three percent of workers go to work when they are
ill,
and 21 percent do so explicitly to save cheir sick leave to stay home when their children are sick (ComPsych
Corporation 2007).
A
key finding in much of this research is that low-income workers often lack access to paid time off. In
fact, data from nationally representative samples show that high-wage employees are more than twice as.·
likely as low-wage employees
to
be able to take time off without penalties to care for their sick children
(Galinsky et al. 2004). According to the Labor Department, private-sector workers making less than $15
an hour are less likely than higher-paid workers to have access to any paid sick time, paid vacation time,
or paid personal time (U.S. Bureau of Labor Statistics 2007). Children in low-income families are also
much less likely to have a parent with pa.id sick leave than children in higher-income families, even among
families with two employed parents (Clemans-Cope et al. 2008).
To address this lack of pa.id sick leave, several jurisdictions have implemented or are considering a new
labor standard that would require employers to provide paid sick leave. The city of San Francisco was the
first to pass such a law in 2006, but it
is
by no means alone in its efforts.
In
March 2008, the District of
Columbia became the second locality to pass a mandate on employers guaranteeing paid sick leave to
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workers. The bill is modeled after the San Francisco ordinance, but it differs on several details. Milwau-
kee, Wisconsin, voters also passed a sick leave mandate in November 2008. In addition, the federal gov-
ernment as well as other states and localities have introduced legislation on this issue (box l).
A growing body of research shows the benefits to employees of having access to paid sick leave.
In
partic-
ular, the public health benefits appear strong; paid sick leave helps reduce the spread of infectious diseases,
such as influenza, and hospitalizations and health care costs for preventable chronic conditions (Bhatia
2007; Hartmann 2007). One analysis finds that workers with preventable chronic conditions have less
access to paid sick leave, suggesting that workers with greater medical care needs face an additional barrier
to addressing their illnesses (Bhatia et al. 2008).
Information on the business impacts of providing paid sick leave is more limited.
'fo
be sure, many
employers already provide sick leave benefits to some of or
all
their employees,
in
part because of benefits to
their business. For example, the availability of paid sick leave has been linked to reduced voluntary and
involuntary job turnover for employers (Cooper and Monheit 1993; Dodson, Manuel, and Bravo 2002;
Earle and Heymann 2002; Heymann 2000).
In
addirion, the provision of paid sick leave appears to improve
business producciviry by limiting "presenteeism," or when employees work while
ill,
and ensuring that work-
ers are healthier while on the job (CCH Incorporated 2003; Goeczel et al. 2004; Hemp 2004; Lovell 2004).
However, mandated employer benefits increase labor costs for businesses, which can lead to employer
actions to minimize or offset these costs. A large body of research on employer mandates shows that busi-
nesses
will
generally pass on any increased costs to their employees, through reduced wages and benefits,
or to their customers, through increased prices. To minimize costs, employers may also reduce workers'
hours to avoid workers' benefits from accruing, or maintain lower staffing levels than they otherwise
would, for example by reducing the number of employees. This
is
particularly likely for employers with
a minimum-wage labor force, who face wage rigidity (Summers 1989).
An
initial look at San Francisco's
employment rate in the year following implementation showed that the city "maintained a competitive
job growth rate" (Lovell and Miller 2008,
1).
However, a paid sick leave requirement has unknown longer-
term implications. The Institute for Women's Policy Research has analyzed potential costs and benefits of
paid sick leave policies and predicts a net savings for employers, employees and their families, and society
(Lovell and Miller 2005). The National Federation ofindependent Business, on the other hand, estimates
major job losses and lost sales revenue associated with sick leave requirements (Phillips 2008a, 2008b).
BOX
1.
Paid Sick Leave
Policy
Initiatives, 2008
Source:
N~tional
Partnership for Women and Families,
"In
th<.'
States," http://www.rui.tionalparrnership.orgisitc/PagcScrver?pagcnamo=psd_toolkit_
map_states.
2
Elv1PLOYERs· PERSPECTJVFS ON SAN FRANCISCO'S PAfD S1CK
LEAVE
POLICY
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San Francisco Ordinance and Context
The San Francisco Paid Sick Leave Ordinance (PSLO) passed as Proposition F by a ballot initiative spon-
sored by the San Francisco Board of Supervisors in November 2006. It amended the city's administrative
code by mandating char
all
employers grant their employees working in the city a minimum amount of
paid sick leave. This law is notable in that it provides time off for health-related needs for the worker as
well as the workers' family members or other "designated person." In addfrion, the law passed in San
Francisco applies to all employers in the city, regardless of the size of the employer, and to all employees-
part-time, full-time, and even temporary workers. The effective start date of the legislation was June 6,
2007. Additional details of the PSLO are explained in box 2.
The ordinance provided sick leave to an estimated 115,800 additional private-sector workers in San Fran-
cisco. These workers were eligible by the law's provisions but previously lacked access to
any
paid sick days.
Overall, an estimated one-quarter of the city's private-sector workforce gained paid sick leave through the
ordinance (Lovell 2006).
Two additional employer mandates implemented around rhe same time as the paid sick leave ordinance--
a mininmm wage increase (to $9.36, a rate $3.51 higher than the federal minimum wage, and $1.36 higher
than the state minimum wage, ar the time the site visit was conducted) and a health insurance expendi-
ture requirement-shaped employers' perspectives on San Francisco's business climate. It is important
BOX 2. San francisco Paid Sick Leave Ordinance
EMPLOYERS'
PERSPECTIVES
ON SA1'l FRANCISCO'S
PAID
SICK LEAVE POLICY
3
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to consider the effects of these additional mandates in interpreting the study findings. Box 3 describes these
additional labor standards in San Francisco.
About This Study
Despite the body of research outlining the benefits of paid sick leave as well as research on employer and
employment effects of benefit mandates more generally, none of the research to date has examined the
experiences of employers implementing the new law. Given that San Francisco has passed the nation's first
paid sick leave mandate, the results of this study should help other states and localities as they consider
enacting this type of law.
To that end, we examined how the new paid sick leave law affected 26 employers during the initial imple-
mentation period. The study focused on how the law affected their costs, staffing, and overall operations;
whether it caused them to alter wages or other benefits provided, or the costs of their services or products;
and whether it had noticeably affected employee retention or morale. Interviews were conducted in lvfarch
2008, approximately nine months after the law became effective.
In
selecting employers to include in the study, we focused on those that had changed their personnel poli-
cies
to
comply with the ordinance. We sought to include a wide range of employers with at least some low-
wage workers (paying $15 an hour or less). Participants were identified via employer associations and
groups, nonprofit organizations, Internet searches, and discussions with local experts.
The study team conducted 20 in-person or telephone interviews and held two focus groups with 6 addi-
tional employers. Respondents were business owners, human resources managers, or public policy direc-
BOX3. Additional California and San Francisco Employer Mandates
:•· ·<
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4
EMPLOYER':>' PEHSPECTfVES ON SAN FRA[\JCfSOYS PArD SJCf,: LEAVE POLICY
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tors, or they were employed in a similar role and able to represent their firms' personnel policies. The
employers included in the study represented different business sizes, from an employer with one part-
time employee to a national company with 10,000 employees in San Francisco alone. We identified small
businesses as those with 25 or fewer employees, medium businesses as those with 26 to 99 employees,
and large businesses as those with more than l 00 employees. The sample included a range of industries
as well. The sectors represented were chosen to reflect the industries in San Francisco that employed high
percentages of
low~wage
workers: the restaurant, retail, service, and health/human .services industries.
Table 1 breaks down the employers by size and industry.
This subset of the business community was chosen to highlight the operational experiences of those
affected by the paid sick leave ordinance. The sample is not representative of San Francisco employers as
a whole or of all employers that changed personnel policies to meet the requirements of the ordinance.
This srudy also does not address the benefits or effects of the ordinance on workers themselves.
Employer Strategies for Implementing Paid Sick Leave
Employers in the study sample implemented the paid sick leave ordinance in various ways, from creating
entirely new policies to tinkering with specific facets of previous policies in order to comply with the new
requirements. The changes in their policies can be summarized into four broad categories: (1) expanding
leave for all or some employees, (2) establishing a paid time off (PTO) policy, (3) replacing other bene-
fits
and compensation policies, and (4) changing accrual rates and probationary periods.
These .strategies are not mutually exclusive, and a single employer can fall under more than one category.
For example, an employer could change its policy from covering some employees to covering all workers,
as well as change the probation period before new employees begin accruing sick time.
Expanding Lea"tie for All or Some Employees
Four interviewed employers offered no paid sick or vacation leave to rheir employees before the law was
passed and subsequendy implemented a new paid sick leave policy and developed a new tracking
system. These employers had allowed their workers to take sick leave, but it was unpaid and had limi-
tations. One employer, the owner of a medium-sized restaurant, had in the past occasionally granted
paid sick leave to workers informally and case by case, depending on the worker's circumstances.
Several, particularly small business owners operated with more informal policies on leave before PSLO
was passed, so meeting the requirements of the new law required them to formalize their policies.
As one small business owner said, "Before, it was a courtesy-if someone wants to rake a day off. I
TABLE 1. Employers
by
Industry and Size
Ervf PLOYERS' PERSPECTIVES ON SAN FRANCISCO'S
PAID
SICK LEAVE POU CY
5
@
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wouldn't dock their pay-you have to consider whether you want to be a strict boss or be more infor-
mal, like a family."
Ten employers expanded their sick leave policies to some workers who had not been covered by former
policies, resulting in increa5ed time off for more workers at the business. In most of these cases, sick leave
had only been available to full-time employees; the ordinance thus opened these companies' policies to
part-time employees. In one small business, the employer had offered paid leave only to her two salaried,
managerial employees; she began offering paid leave to her hourly employees as well to comply with the
regulations. A large financial services company expanded its paid time off policy to previously ineligible
on-call workers.
Establishing a
Paid
Time Off
Policy
About one-quarter (seven) of the employers in the study enacted a paid time offsystem encompassing both
sick and vacation leave to implement the paid sick leave ordinance, combining rather than separately track-
ing vacation and sick time accrual and use. Whether employees gained more paid days off depended on
the employers' policies before the ordinance. For example, several employers went from granting some or
none of their employees any paid vacation or sick leave to using PTO, thus increasing the overall amount
of paid leave. Others reclassified what had previously been only vacation leave
to
encompass the sick leave
requirement without providing any additional time off.
Employers switched to PTO for a range of reasons. Some employers believed PTO would be easier to
track than separately calculating vacation and sick leave accruals, and thus switched out of convenience.
Others didn't want to "police" their employees to ensure sick leave would be used for legitimate illnesses
in employees' families. \Vith PTO, the employee did not need to provide an explanation for taking the
time off. For example, one dry cleaner changed what was a vacation policy to PTO to avoid the paper-
work that would have been necessary for allowing workers to care for a "designated person" as specified
by the city's regulations.
Several other employers were motivated to use a PTO system because they believed it would reduce
unscheduled absences. For example, one small service-sector employee had a "historically bad pattern" of
employees calling in sick on weekends and holidays even though she had not previously granted most of
her employees any paid leave. She decided to implement a PTO policy because she preferred for her staff
to give advance notice when they wanted time off and to pay for the leave rather than deal with the chal-
lenges of finding coverage for staff who called in at the last minute. Another employer, an owner of a
medium-sized restaurant, described the switch to a PTO system as a way of providing a "disincentive" for
workers to call in sick, as he assumes his workers prefer to save their paid leave for vacation.
Replacing Other Benefits and/or Compensation
with
Sick Leave
Ten employers adjusted alternate aspects of their personnel policy to compensate for providing sick
leave. Common approaches included eliminating vacation time or other benefits or decreasing pay
raises or bonuses. For these firms, implementing the paid sick leave ordinance led them to trade off
previous benefits.
Three employers reclassified vacation time as sick leave to meet the new requirements. Sometimes the paid
sick leave ordinance was more generous than the employers' previous policies and provided more paid
6
EMPLOYERS
PEHSPECTfVES
ON
SAN rn.ANCJSCO'S PAfD SICK LEAVE POLICY
@)
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time off. This differs from PTO in that employees are typically not permitted to use their sick leave for
non-health or caring purposes.
Interestingly,
all
three employers who replaced vacation time with sick leave were in the restaurant indus-
try: two owned multiple restaurants or locations of the same restaurant and were classified as large employ-
ers, and one was a small restaurant. These employers explained that they could not afford to give their
workers both forms of leave.
Three other employers eliminated or decreased benefits that they had supplied, such as end-of-year bonuses.
Two small employers reported that they paid for sick leave with funds that had been allocated as bonus pay-
ments because no other funds coming into the business could be used to cover leave. Another medium-
sized retail employer used to give her employees their unused sick leave at the end of the year as a
time-and-a-half pay bonus; now, because paid sick leave can carry over to the next year, she does not pro-
vide the benefit as a bonus.
Three small retail and two restaurant employers felt they could no longer afford to maintain previous
rates of incentive-based wage growth. One explained that as paid sick leave added another component
to labor costs and each employee's net pay, he does not promote employees or provide wage raises as
quickly as he otherwise would.
In
his words,
"If
you're at $10, you're going to stay there chat much
longer to make up for [the additional expense]." Another employer reported that he had frozen wage
growth because of the ordinance, locking in wages at their pre-ordinance level rather than stepping
chem up over time.
Changing Accrual
Rates
and Probationary Periods
Most employers in our study granted at least some of their employees some form of paid leave before the
ordinance's passage, but they were required
to
change their policies to comply with the new regulations.
Most commonly (as reported by 11 employers), they increased the rate at which sick leave or PTO accrues
or shortened the probationary period before which new employees begin accruing leave.
Under the new law, employees accrue one hour of paid sick leave for every 30 hours worked. Eight inter-
viewed employers who previously provided sick leave had a different formula for accrual (Le.,
I
hour for
every 40 hours worked, etc.) or based the calculation on an alternative time unit such as calendar date rather
than gradual, hourly accrual (i.e., si.'I: hours a month, eight days a year, one week a year, etc.). The employ-
ees working for these employers had a net gain in amount of paid leave they had access to per year.
According
to
the San Francisco ordinance, for employees hired after the implementation date, sick leave
accrual begins after 90 calendar days. Nine employern in our sample had
to
change previous probationary
policies to meet this regulation, resulting in newer employers having access to paid sick leave sooner than
they would have had under prior policies. For example, accrual for paid sick leave for one large human
services employer pre-implementation began after an employee had worked a
total
of 1,000 hours, which
is significantly longer than 90 days, especially for a part-time employee.
Employer Experiences Implementing the Paid Sick Leave Ordinance
Several findings regarding employers' experiences with the paid sick leave ordinance and issues they faced
in implementing the new law were identified through our interviews.
EP.WLOYERS' PERSPECTIVES ON SAN
FRANCISCO'S
PA.ID SICK LEAVE POLICY
7
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By
and large, most employers were able
to
implement the paid sick leave ordinance with minimal
to
moderate effects on their overall business and
their
bottom line.
Most respondents in our sample expe-
rienced some increased labor costs because of PSLO, either from expanding existing policy to cover all
employees or increasing benefits. A few also noted additional minor costs in terms of accounting or track-
ing systems used to help monitor leave accrued and taken by their employees. Most employers reported
they were able to absorb the cost of providing paid sick leave. Reasons for the minimal impact varied but
included being a smaller employer with few employees affected by the law or adjusting only slightly the
total number of paid days off (through substituting sick days for vacation days or making relatively minor
adjustments to accrual rates or probationary periods).
As
noted above, the paid sick leave ordinance was implemented at the same time
nvo
other employer man-
dates, a minimum wage increase and a health insurance mandate, were enacted. Many employers were
focused on the "package" of these new requirements and what they meant for their business. Most employ-
ers were quick to say that of the three, the PSLO was the least costly to their bottom line. However, in a
city
where labor cost increases were piling up, the PSLO did not help.
As
one dry cleaning store owner said,
"The paid sick leave, taken by
itself,
is not a big deal. But you get a triple whammy when you add that
to
the minimum wage increases and the health insurance."
About haJf of the employers interviewed tried to offset or minimize their recent increased labor costs.
Ten employers in our study reported that they passed on the costs of the PSLO to their workers through
changes in other benefits or delayed wage increases to help defray costs. Because of the minimum wage
requirement, employers were largely unable to significantly reduce wage rates. However, some delayed or
cancelled planned wage increases for staff as a result ofincreased labor costs in general and the PSLO specif-
ically. Some employers changed other benefit levels
to
help defray costs, such as eliminating end-of-year
payouts for unused sick days or cancelling a planned extra week of vacation. Seven employers raised the
prices or rates charged to their customers, but all noted that these increases were motivated by the impact
of the three employer mandates and other economic conditions on their business, not just the paid sick
leave ordinance. Rate increases were seen in restaurants, retail, and health care.
Among the busineSses included in our study, small or medium-sized employers were more
affected
by the paid sick leave law
than
larger employers.
Most medium-sized employers we interviewed had
to expand benefits to a significant portion of their workforce, and their ability to both absorb the labor
cost increases and to administer and track the leave was significantly affected. According to many own-
ers, profit margins were tight, and the increased labor costs required companies to look for ways of decreas-
ing costs in other areas of their business. Additionally, several companies lacked sophisticated payroll
systems and therefore bad trouble meeting the tracking requirements of the law.
In
our sample of busi-
nesses, small employers did not appear to be as significantly affected by the law in terms of increased labor
costs because some usually provided some type of paid sick leave informally. However, some small busi-
nesses eliminated vacation or bonuses to reduce costs, and several had difficulties implementing a track-
ing system.
Larger employers, on the other hand, seemed better able to handle the tracking requirements of the law
and to absorb the new labor costs into their business. Most had human resources departments and more
formalized policies in place for significant portions of their workforce before PSLO. Many large employ-
ers had to expand their policies to additional workers, usually part-time or temporary workers. While this
expansion was sometimes substantial-for example, one national retailer had to start providing paid sick
8
EMPLOYERS PEHSPECTfVES ON SAN Hl'\NCfSCO'S PAID
SlCh:
LEAVE POLICY
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leave benefits to almost a quarter of its San Francisco workforce, all of whom worked part rime-the over-
all increase to the business's labor costs were small because the firm was very large.
Some industries faced
more
challenges with providing paid sick leave than others.
In
general, restau-
rants were more likely than other industries to respond to the increased labor costs, with many enacting
some type of cost saving measure. Again, however, most restaurant owners said that these cost-cutting mea-
sures often were not related to PSLO itself but a combination of the PSLO and an increase in the mini-
mum wage. Restaurant owners noted in particular that, unlike the federal minimum wage, San Francisco's
minimum wage did not allow for a tip allowance, or a decreased minimum wage for workers who receive
tips. Paying this wage rate while staying competitive with restaurants outside the city and keeping prices
"affordable" was a challenge.
Even within this industry, restaurants responded in different ways to reduce their labor costs. Some own-
ers tightened shifts and schedules so they did not have to hire so many part-time employees. Others shifted
part-time workers to full-time positions, mostly through attrition but occasionally by letting staff go and
replacing them with full-time workers. Other restaurants found additional ways to cut labor needs. One
local restaurant chain with facilities outside the city decided to have all its vegetables and fruit prepared and
chopped in a nearby city and have the food driven to ics San Francisco restaurants to reduce the amount of
San Francisco-employee time preparing food. Another owner started purchasing precut pork chops and
preprepared vegetables to reduce his need for "back of the house" workers.
Some restaurant owners stressed thar the increased labor costs hit the medium-sized restaurants--those that
require a large number of wait-staff-the hardest.
As
one restaurant owner said, "The fine dining places
are being driven out. Now, the only w-ay to stay in business here is to open pizzerias, sandwich shops, taque-
rias ... out-the-door restaurants, with fewer than 15 staff. But these types of restaurants don't provide as
many jobs, and it cuts into our reputation as a food destination."
Other industries also faced challenges. The health care industry employs on-call staff; many of whom work
intermittently. Providing on-call staff paid sick leave
is
difficult, given that they are only called when needed
and often are not guaranteed a certain number of hours each week or even each month. The wages of these
workers, according to one health care employer, are typically higher given the nature of these positions
(often
at
rates negotiated through a collective bargaining agreement), so adding a benefit onto this cate-
gory of employee affects the employer's bottom line.
Similarly, a nonmedical home care agency expressed concerns about
its
"at-will" employees. When the
agency hires a caregiver, the employee agrees to take on a particular assignment, and he or she is expected
to stay with that client until the client no longer requires the employee's services. While the interviewed
agencies allowed their vvorkers to take unpaid leave before the ordinance
to
attend to their own or their
families' health needs, the employers were not able to guarantee caregivers their assignment upon their
remrn. Caregivers thus risked losing their jobs when taking time off: if a client preferred a particular care-
giver's replacement, the client could switch caregivers. In addition, as employees' hours were based on indi-
vidual clients' discretion and could be unpredictable, and as the work took place in clients' homes, the
employer faced challenges in implementing and tracking paid sick leave accrual.
Many businesses would prefer state or national
emplo~r
mandates rather than a
city
mandate.
For many employers, the fact that their competitors jusr over the city line were not subject to the city's
minimum wage, health insurance, or paid sick leave requirements made the cost of staying competitive
Ei'viPLOYERS' PERSPECTIVES ON SAN FRANCISCO'S PAID SICK LEAVE POLICY
9
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difficult. While six employers noted that they might consider relocating outside San Francisco in the fi.tture,
most reported that they did not have much of an option, given that their business relied on either local res-
idems (such as dry cleaners or pet care) or tourists (for restaurants and hotels) drawn to San Francisco.
Given these realities, most employers explained that if the government was going to pass paid sick leave
mandates, it should be the state or national government. This was true regardless of the employer's personal
opinion of the law. For example one small employer said, "Philosophically, [PSLO] is a good thing. I just
wish ir were more spread out-and rhar all businesses had
to
comply-that way it would level the playing
field, so that we are not at a competitive disadvantage." Another, who did not support the law, noted,
"If
everyone in the state
was
doing it, then okay. ·who cares if taxes go up?
If
everyone else is paying, who cares?"
One hardware company owner suggested that the
city
could help San Francisco employers
by
giving them
preference in their contracting and bidding processes. "Right now, I'm competing against companies out-
side of San Francisco who don't have to comply with these city mandates. So, to win the city contract, you
either make less or you lose the bid because these other companies have lower costs. The city should take
the lead on business-friendly legislation to offer San Francisco businesses preference in bidding for city con-
tracts. It would make a statement from the city that they're a5king a tremendous amount from the busi-
nesses here, but that the city wants to help them however it can."
Larger employers did not worry as much about competitive disadvantages, since their operations and larger
business decisions were not typically driven by policy changes in San Francisco. But, for different reasons,
larger employers also said they would prefer a state or national law, if paid sick leave was going to be an
increasingly common requirement. These respondents were primarily concerned about administering dif-
ferent policies for employees in different cities and, for national companies, in different states. For these
larger national employers, mandates requiring nine days of paid sick leave in San Francisco, seven days in
Dayton, and five days in Washington would be difficult for human resource administrators.
k
one com-
pany representative noted,
"It
is a mess to try to have specific rules for each city. \Ve don't want a patch-
work solution and want to see laws at the federal level, whether we like the laws or not. A patchwork
just
causes confusion on top of administrative burdens."
Few employers reported any early benefits from reduced absenteeism, lower turnover, or improved
employee morale as a result of the paid sick leave ordinance.
Employers noted that turnover and
retention seem less relevant to a mandated benefit, since now the same sick leave benefits are available
across companies.
As
one small business owner observed, "The policies I had in place before were there
to
reduce turnover and get better employees-and they did have an effect. But now, since the new ordi-
nance, employees will have the same benefit no matter where rhey work. There's less of an incentive to
stay and work for me."
Some employers reported that the law limits their ability
to
reward full-time or longer-tenure workers with
higher benefits than part-time or new workers.
As
one small business owner said "Now my part-time
employees are getting to be equal
to
my full-timers, those full-timers are upset that they're getting the
same benefits-they feel mistreated. There needs to be some distinction for those that work full time
and have been working for me for a while. But, I don't have the ability to add additional benefits to full-
timers because all of my fixed com are up."
Policymakers need to engage employers to inform the details of a paid sick leave
law.
Employers
stressed the need for employers to be at the table
early
on when crafting a paid sick leave policy. Accord-
10
EMPtOYERS' PERSPECTfVES ON SAN FRA.NCISCO'S PAfD SlCK LEAVE POLICY
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ing
to
many employers in our study, the development of San Francisco's policy did not include the
employer perspective on critical issues, making implementation more difficult. As one employer noted,
"When I have a problem, I go to the people who are going to be affected and ask their opinion. Here is a
problem where they want to find a solution, and the stakeholders who should have been tapped weren't.
No matter how you slice it,
it
is a cost,
so
business will still be against it-but HR folks and other busi-
nesses could have at least weighed in on how to get
it
right." Many employers noted that, from their per-
spective, the process seemed to have assumed an adversarial relationship between employers and
employees. Employers stressed that this is not necessarily true and that involving employers in the con-
versation and viewing them as partners in crafting the policy would have been a better route to finding a
mutually agreeable policy.
Employers noted an important area for their input was setting the sick leave accrual rates. Many noted that
San Francisco's accrual rate of one hour of sick leave for every 30 hours worked was awkward to implement.
Most human resource systems already account for benefits in increments of 20 or 40 hours, so the 30-hour
accrual required additional calculations for most employers. In addition, the
way