On January 12, 2018, Maryland passed the Healthy Working Families Act. This Act has an effective date of February 11, 2018 but due to the recent passage, final regulations have not yet been released. The following information is contained in the bill, but we expect additional regulations from the Maryland Department of Labor, Licensing, and Regulation.
Employees qualify for sick leave under the Act if they work regularly at least 12 hours a week for a covered business. Employers of all sizes must offer sick leave; those with 14 or fewer employers must provide unpaid earned sick leave, and those with 15 or more must offer paid sick leave.
The law creates an exception for collective bargaining agreements. For employers who have entered into a CBA prior to June 1, 2017, no requirements are imposed for the duration of the contract term. For those who are negotiating CBAs, the employer and the union may expressly waive the Act’s requirements.
Sick Leave Accrual and Entitlement
Qualifying employees begin to accrue paid sick leave on February 11, 2018, or the first day after they start employment, if hired after February 11. Employees accrue one hour of paid sick leave for every 30 hours worked or the employer may choose to frontload 40 hours at the beginning of each year.
The law permits businesses to cap the accrual paid sick leave at 40 hours per 12-month period based on employee anniversary. Employees can carry over up to 40 hours to the subsequent 12-month period, though carryover is not required if the employer uses the frontload method. Employers are permitted to cap the annual use of paid leave at 64 hours per employee.
Employers do not need to pay out any unused sick leave as cash upon termination. Employees must have their unused accrued hours reinstated if they are rehired within 37 weeks.
Employees must have the ability to begin using accrued paid sick leave no later than their 106th calendar day after their employment commences. Employees can use the leave for their own illness, injury, or medical care, or for that of covered family members. Employees may also use paid sick leave if the employee or a family member is a victim of domestic violence or a sex offense, for maternity or paternity leave, or if the employee’s place of business or child care facility has been closed due to a public health emergency.
Covered businesses may require employees to provide seven days of notice prior to taking paid sick leave, only if the need for the leave is foreseeable. Otherwise, employees may provide notice as soon as practicable. Businesses also may require the employee to certify that leave is for a qualifying purpose, but only if the employee requires more than three consecutive leave days. Businesses cannot require the certification to specify the nature of the medical issue necessitating the leave.
Existing PTO Policies
If an employer currently has a policy that grants employees paid time off in a manner consistent with the new requirements, it need not provide additional paid leave. It will, however, need to conform its policy to meet the requirements of this new law.
Starting on February 11, 2018, covered businesses must conspicuously post a notice describing employee rights under the Act. Businesses must post this notice in each facility where any eligible employee works. Employers must also provide, in writing, at each regular pay date, the amount of paid sick leave available.
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This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.