Publications

Paid Leave Wars: The Battles Intensify

June 23, 2017Alerts Labor & Employment Alert

Mandatory paid leave is making some employers sick. With no national standard, states and cities are rolling out paid leave mandates at a dizzying pace. This presents daunting compliance challenges for employers with employees in multiple jurisdictions.

Opponents of paid leave insist that these laws are “job-killers,” while advocates bemoan America’s dearth of paid leave compared with other developed nations. This has led to turf battles between municipalities and their states as to which jurisdiction has the authority to set employment standards. Now, there are rumblings at the federal level about setting a national standard.

But employers – especially those with operations in more than one state – need to be aware of the laws and ordinances cropping up at the state and local level, some of which take effect as soon as July 1.

Family and Medical Leave Act

For almost 25 years, larger employers have complied with the federal Family and Medical Leave Act (FMLA) which mandates up to 12 weeks of unpaid leave during a 12-month period to care for a newborn, adopted or foster child, or to care for a family member, or to attend to the employee’s own serious medical health condition. The law applies to private employers with 50 or more employees. An employer can choose to provide the leave as paid leave, but this is voluntary.

The FMLA also allows states to set standards that are more expansive than the federal law and many states have chosen to do so. States with their own family leave laws include California, Connecticut, Hawaii, Maine, Minnesota, New Jersey, Oregon, Rhode Island, Vermont, Washington and Wisconsin (plus Washington D.C.). Each has an array of different requirements to determine items such as eligibility, who is a covered employer and the amount of leave available. An employer must comply with all of the requirements of federal, state and local laws – the employee gets the benefit of all of the laws which apply.

Paid Family Leave

In the last several years, a handful of states have rolled out paid family leave programs funded through employee-paid payroll taxes. California, New Jersey and Rhode Island currently mandate paid family and medical leave.

Paid Sick Leave

Five states – Connecticut, California, Massachusetts, Oregon and Vermont – currently require private sector employers to provide paid sick leave to their employees, but several states have recently enacted new laws and many cities and counties have adopted their own requirements.

Here are some of the recent state and local legislative initiatives:

  • Arizona: Employers will be required to provide earned paid sick leave to employees starting July 1, 2017.
  • Chicago and Cook County: Cook County, Illinois, will mandate paid sick leave for employers, including Chicago employers, effective July 1, 2017. Employees will be eligible for paid sick time if they work 80 hours within 120 days. They will accrue one hour of paid sick leave for every 40 hours worked, up to 40 paid sick leave hours per year and up to 20 of those hours can be rolled over to the next year. Chicago’s sick leave ordinance covers all employers that maintain a business facility within city limits or are subject to one or more of the city’s licensing requirements. Several municipalities within Cook County, though, have opted out of the county’s ordinance, so the law will not apply in those jurisdictions. Complicated!
  • Georgia: Effective July 1, 2017, certain workers in Georgia who receive sick leave from their employers will be entitled to use up to five days of leave per year to care for family members. But the law does not require Georgia employers to provide sick leave at all.
  • Maryland: The governor vetoed a bill that would have required employers with 15 or more employees in the state to provide most employees with up to five days of paid sick leave per year, but a task force has been charged with making recommendations for new legislation.
  • Minneapolis and Saint Paul: The Minneapolis sick leave ordinance requires employers with at least six employees to provide paid sick and safe time leave to employees who work in the city. Employees accrue one hour of sick leave for every 30 hours worked, up to 48 hours of sick leave per year. The Saint Paul sick leave ordinance is similar, but applies to all employers regardless of size.
  • Nevada: Earlier this month, a bill requiring certain employers to offer paid sick leave was vetoed by the governor. The legislation would have required businesses with 25 or more employees to provide paid sick leave to full-time employees. Employers would have been required to award one hour of sick leave per 40 hours of work for a total of 40 hours per year.
  • New York: Paid family leave starts on January 1, 2018 with eight weeks of leave and with a four-year phase-in to 12 weeks of at least partially paid family leave when fully implemented.
  • Pittsburgh: Pittsburgh’s paid leave law was blocked by a court in 2015. An appellate court in May 2017 agreed that Pittsburgh was not vested with the authority from Pennsylvania to enact the legislation. The law would have required businesses with 15 or more employees to provide upward of 40 hours of paid time off to their workers per year. Employers with fewer than 15 employees would have had to provide upward of 24 hours annually under the measure.
  • Washington: A law pending in Washington State would require employers to offer workers at least one hour of paid sick leave for every 40 hours worked.

Some states are pushing back to bar cities from passing paid leave laws. For example, Minnesota and Pennsylvania are considering these types of laws.

Possible Federal Legislation

At the federal level, President Trump urged lawmakers in his February address to Congress to work to “ensure new parents have paid family leave.” This echoes Ivanka Trump’s speech during the Republican Convention last year and her visits to Capitol Hill on June 20 and 21 to talk with lawmakers about family tax credits, including those for family leave. The budget request presented in May by The White House included a paid parental leave concept that would involve the creation of a federal and state paid parental leave program to start in 2020. The proposed benefit would provide six weeks of paid leave for new parents.

According to Bloomberg BNA, there are rumors that House Republicans will introduce legislation shielding employers from state and local paid leave requirements if they offer workers a certain amount of paid time off for family and medical reasons. This would be a boon to multistate employers that would prefer not to deal with varying and constantly changing paid leave laws at the state and local levels. The anticipated federal legislation would amend the Employee Retirement Income Security Act (ERISA), which sets minimum requirements for pension and other benefits plans. ERISA bars – preempts -- state and local governments from implementing additional restrictions or requirements on employee benefit plans.

Other pending bills would establish a national paid family and medical leave insurance program funded by contributions from employers and workers or would offer tax incentives to employers that provide paid family and medical leave.

Vigilance

Employers need to keep pace with this tumultuous legislative landscape with a compliance program in place to keep pace with new legislative changes to ensure that the correct policies and tracking systems are in place to comply with these mandates.

For more information about this alert, please contact Steven K. Ludwig at 215.299.2164 or [email protected] or any member of the firm’s Labor & Employment Department.