At long last, the Massachusetts Attorney General has issued the eagerly-anticipated proposed regulations concerning the Earned Sick Time law that was passed by referendum on November 4, 2014 and goes into effect July 1, 2015. The law itself contains many ambiguities, and employers have been awaiting guidance from the Attorney General so that they can begin modifying their leave policies to come into compliance with the new law. While the proposed regulations do not resolve every ambiguity in the law, they do provide clarification on a number of areas, specifically:
Definition of Hourly Rate
The statute provides that paid sick time is to be paid “at the same hourly rate as the employee earns…at the time the employee uses the paid sick time,” but not less than minimum wage. The proposed regulations clarify that, for employees paid on an hourly basis, the “hourly rate” to be paid when an employee takes sick time includes base rate wages “and any other benefits paid or accrued on an hourly basis if the individual works.” This means that, unlike for most leaves, benefits accrue while an employee is using leave. In addition, the language suggests that employees will accrue additional sick leave while they are using their sick leave!
For employees who receive different rates of pay at different times, employers are to use a “blended rate” to determine the employee’s hourly rate – i.e., a weighted average of all rates earned during the previous pay period. However, overtime, holiday pay, or other premium rates are not included in this calculation.
For employees who are not paid hourly, such as employees paid on a salary, fee-for-service, or piece work basis, the hourly rate is determined by dividing the employee’s total earnings in the previous pay period by the total hours worked during that pay period.
Commissioned employees must receive their base wage, or minimum wage, whichever is greater. If an employee is paid only commission and does not have any base wage rate, then the employee must be paid minimum wage. The proposed regulations explicitly state that commissions are not to be included in an employee’s “hourly rate” for purposes of sick leave pay.
Breaks in Service and 90-day Vesting Period
One of the ambiguities in the initial statute was what would happen to an employee’s accrued sick leave if the employee left employment but then returned. This was of particular concern with respect to seasonal employees, who might accrue and carry over sick leave, but might never work 90 days in a given year (under the law, employees may use sick leave after they’ve been employed for 90 calendar days). The proposed regulations clarify that the 90 calendar days does not need to be consecutive, nor does an employee have to actually be working throughout that 90-day period. Specifically, the proposed regulations state that employees “may begin to use any accrued earned sick time 90 calendar days after the first date of actual work, regardless of the number of days worked during the 90 calendar day period.”
The proposed regulations also state that employees maintain the right to use any accrued sick time after a break in service of up to one year from the last date of actual work. This means that seasonal employees will be eligible to use accrued sick time from prior years, provided that they start work for the next season within one year of their last day of work from the previous season. It also means that employees who are terminated (whether voluntarily or involuntarily) and then rehired within a year are entitled to use any accrued sick leave they had left over from their previous period of employment.
Covered Employers and Employees
The proposed regulations clarify that the earned sick time law applies to any employer of Massachusetts employees (except the U.S. government and municipalities that have not voted to be subject to the law), regardless of where the employer is headquartered. An employee is eligible to accrue and use earned sick time if the employee’s primary place of work is Massachusetts. The proposed regulations suggest that Massachusetts will be considered the employee’s primary place of employment if the employee spends more time working in Massachusetts than in any other state, even if the employee spends less than half of her working time in Massachusetts. Moreover, all hours worked by an eligible employee, regardless of the state in which the work is performed, will count towards the accrual of sick leave.
In determining whether an employer has 11 or more employees and thus has to provide paid sick leave to its Massachusetts employees, all employees are counted, regardless of whether the employees work in Massachusetts. In other words, if an employer is headquartered in New York and has ten employees who work only in New York and one employee who works in Massachusetts, the employer would have to provide paid sick leave to its Massachusetts employee.
Moreover, an employer must provide paid sick leave if the employer had 11 or more employees on its payroll during at least 20 weeks during the current or preceding calendar year, or if it had 11 or more employees on its payroll during at least 16 consecutive weeks during the current or preceding calendar year. This means that if an employer had 20 employees for the first 16 weeks of 2015, but downsized to 5 employees in May 2015, the employer would have to provide paid sick leave for its employees for all of 2015 and 2016.
For purposes of determining employer size, as stated above, the calendar year runs from January 1 to December 31 (i.e., an actual calendar year). For all other purposes of the statute, the term “calendar year” is defined as “any consecutive 12-month period of time as determined by an employer.” (i.e., not necessarily the calendar year) In other words, employers do not need to calculate sick leave accruals based on a calendar year; they can accrue by fiscal year, or by employees’ anniversary dates, or by any other 12-month period they choose. Employers are required to provide written notice to employees at the beginning of their employment informing them of which 12-month period the employer uses for purposes of sick leave accrual and use.
Certification and Definition of Health Care Provider
The earned sick leave law enables employers to obtain certification for an employee’s need for leave if the employee has been absent for more than 24 consecutively-scheduled work hours. The proposed regulations specify that the certification is only to verify the need for leave and that employers may never require documentation to explain the nature of any illness or the details of any domestic violence. The regulations also state that employers must accept submission of the certification via “any customarily used method for the employee and employer to communicate, including e-mail, mail, text message, or facsimile.” If an employee does not submit documentation within 30 days of taking the leave and has no reasonable justification for failing to submit the documentation, the employer may delay or deny the future use of earned sick time until the documentation is provided.
With respect to certification from a health care provider, employers must accept documentation from any of the following: 1) podiatrists, dentists, clinical psychologists, optometrists and chiropractors; 2) nurse practitioners, nurse-midwives, clinical social workers and physician assistants; 3) Christian Science Practitioners listed with the First Church of Christ, Scientist in Boston, Massachusetts; 4) any health care provider from whom an employer or the employer’s health benefits manager will accept certification of a serious health condition to substantiate a claim for benefits; and 5) a health care provider that practices in a country other than the U.S.
Employees who do not have a health care provider must be allowed to provide a signed written statement stating the need for the use of earned sick time.
Interaction with Other Leave Policies
The proposed regulations state that, if an employee earns unpaid sick time, then the employee must be allowed to use other paid time off (such as vacation or personal time) to get paid for any absences due to the use of sick time. However, the regulations also state that earned sick leave is in addition to time off provided by the FMLA, the Massachusetts Parental Leave Act, the Massachusetts Domestic Violence Leave Act, the Small Necessities Leave Act, “and the like,” which suggests that earned sick leave may not be used concurrently with any of these other types of leave.
“Transition Year” (2015)
The proposed regulations address concerns by many employers about whether, if they already provided sick leave to employees in the first half of 2015, they would have to provide an additional 40 hours of paid leave after the law went into effect on July 1, 2015. The proposed regulations provide that paid sick leave provided to employees prior to July 1, 2015 will count for all of 2015, such that the employer will not be required to provide more than 40 hours of paid leave in 2015. However, if an employer with 11 or more employees allowed employees to take unpaid leave in the first half of 2015 but did not provide any paid leave benefits, the employer must allow employees to accrue and use up to 40 hours of earned paid sick time in addition to the unpaid sick time already used.
- An employee took 15 hours of paid leave prior to July 1, 2015. The employee would be entitled to accrue an additional 40 hours of paid sick time for the remainder of 2015, but would only be eligible to use up to 25 additional hours in the second half of 2015. Any remaining accrued paid sick leave would be carried over into 2016.
- An employee took 80 hours of unpaid leave prior to July 1, 2015. The employee would be entitled to accrue and earn up to 40 hours of paid sick leave in the second half of 2015 in addition to the 80 hours of unpaid leave taken in the first half of the year.
Employer’s Existing Paid Leave Plans
The earned sick leave law states that employers may set their own sick leave or paid leave policies, as long as the such policies are more generous than what the law requires. The proposed regulations provide the following examples of policies that are considered to be more generous than what the law requires (as long as they meet all other requirements of the law):
- A policy that provides more than 40 hours of earned sick time per year;
- A policy that provides at least 40 hours of earned sick time per year and accrues sick time faster than the rate of one hour for every thirty hours worked;
- A policy that provides a lump sum of at least 40 hours of earned sick time at the beginning of employment and at the beginning of each calendar year rather than accruing over the course of the year;
- A policy that provides at least 40 hours of PTO per year that can be used without restriction and that accrues at a rate of at least one hour for every 30 hours worked; or
- A policy that allows employees to use sick time before it has been accrued and provides at least 40 hours of earned sick time per calendar year.
Employer’s Attendance Policies and Notice Requirements
Another area of concern for employers was the sick leave law’s provision that employees needed only “make a good faith effort” to notify the employer “in advance” of taking leave, and only then if the need for earned sick time is foreseeable, leading employers to wonder whether they would be able to enforce any attendance or notice policies with respect to the use of earned sick leave. The proposed regulations provide additional guidance in these areas.
With respect to foreseeable leave, the proposed regulations state that an employer may require up to seven days advance notice for the need for leave (examples of foreseeable leave would include a pre-scheduled doctor’s appointment or a scheduled court date to testify regarding domestic violence). Any employer requiring such notice must provide a written policy setting forth its notice requirements. If an employee anticipates being absent for multiple days, the employer may require the employee to provide notification each day the employee is absent.
Regarding unforeseeable leave, the regulations state that the employee must notify the employer of the need for leave “as soon as practicable” and must comply with the employer’s normal policies and call-out procedures with respect to notifications of unforeseeable absences, “provided that such requirements do not interfere with the purposes for which the earned sick time is needed.” If an employer does not have existing call-out policies or procedures, the employer must establish such policies or procedures, “preferably in writing.” The regulations also state that there may be some situations (“such as accidents or sudden illnesses”) for which such requirements may not be feasible. The regulations also state that if an employee is unable to provide notice personally, the employee can have someone else provide notice on his or her behalf.
Notably, the proposed regulations explicitly address the issue of misuse or abuse, stating:
If an employee is committing fraud or abuse by engaging in an activity that is not consistent with allowable purposes for leave (e.g., being sick, caring for an ill family member) or by exhibiting a clear pattern of taking leave on days when the employee is scheduled to perform duties perceived as undesirable, an employer may discipline the employee for misuse of sick leave.
Unfortunately, the regulations do not provide any guidance as to what would constitute a “clear pattern”, and it is not clear whether such instances of misuse or abuse could also extend to, for example, a pattern of arriving late on Mondays and leaving early on Fridays.
The proposed regulations explicitly state that employers may take the use of earned sick leave into consideration when determining eligibility for good attendance awards or bonuses and that an employee’s failure to qualify for an attendance bonus or reward based on use of earned sick leave does not constitute interference with the employee’s rights under the sick leave law.
Tracking Sick Leave
The earned sick leave law requires employers to track sick leave in the smallest increment that the employer’s pay roll system uses to account for absences or use of other time. This means that if an employer’s payroll system tracks time down to the minute, the employer will have to track sick leave by the minute. The one exception to this rule is where an employee’s absence from work for even a small block of time requires the employer to hire a replacement for the employee’s shift. In that instance, the employer may require the employee to use up to a full shift of earned sick time.
Payout of Unused Sick Time
Another open question regarding the sick leave law was whether it allowed employers to pay employees for accrued, unused sick leave at the end of the year in lieu of carrying it over to the next year. Under the proposed regulations, employers may offer an employee a payout of up to 40 hours of unused sick time at the end of the year, only if the employer makes available to the employee at least 16 hours of sick time at the beginning of the new calendar year. Employers are not permitted to pay out sick time as it accrues.
Employers are not required to pay out accrued, unused sick leave upon an employee’s termination from employment.
Employers must keep documentation of employees’ accrual and use of earned sick time and must maintain such records for three years. Employers also are required to provide a copy of the records to the Attorney General’s office at its request.
The proposed regulations answer some questions surrounding the earned sick leave law, but they leave others open for debate. For example, one question not explicitly addressed by the proposed regulations is whether employers can deny holiday pay to employees who use earned sick leave the day before or the day after a holiday. However, it is important to note that these regulations are merely the proposed regulations. The regulations are currently open for public comment, until 5:00 p.m. on June 10, 2015. If there are concerns you have about the new law that are not addressed in the proposed regulations, we encourage you to contact the Office of the Attorney General.
You may submit comments to the Attorney General’s office by the following methods:
- By e-mail to firstname.lastname@example.org, with “Earned Sick Time” in the subject line
- By traditional mail to: Mike Firestone, Assistant Attorney General, Attorney General’s Office, 1 Ashburton Place, 20th Floor, Boston, MA 02108
In addition, the Office of the Attorney General will be conducting six public hearings throughout the state. The dates, times and locations of the public hearings can be found here.