All Maryland Employers: The New Healthy Working Families Act Applies to You
The Maryland legislature enacted a new bill that affects all businesses that employ workers in Maryland. On January 12, 2018, the Maryland General Assembly passed the Maryland Healthy Working Families Act (“MHWFA” or “the Act”). This new law requires all Maryland employers to provide sick and safe leave to employees. “Safe” leave is leave for employees exposed to domestic violence. The law is scheduled to take effect on February 11, 2018[1] and imposes many technical requirements upon all Maryland employers.
Covered Leave
The MHWFA requires Employers[2] with 15 or more employers to provide paid sick and safe leave. Employers with less than 15 employees must provide unpaid sick and safe leave. All employers must notify employees of their rights under the law.
Accrued “sick” leave under the Act may be used for: 1) care or treatment of an employee or family member’s mental or physical illness, injury or condition; or 2) preventative medical care for an employee or family member. Accrued “safe” leave must be provided to address domestic violence, sexual assault or stalking committed against an employee or his or her family member and may be used for: 1) medical or mental health attention; 2) obtaining services from a victim services organization; 3) legal services or proceedings; 3) time to temporarily relocate for safety reasons. Leave under the Act also may be used for maternity and paternity leave.
“Family members” are broadly defined under the MHWFA and include: 1) children (including biological, foster, adopted, step, those over whom the employee has physical custody or guardianship or stands in loco parentis); 2) the parent of an employee or employee’s spouse (including biological, foster, adopted, step, those who had physical custody or guardianship or stood in loco parentis); 3) the grandparent of the employee (including biological, foster, adopted or step grandparents); the grandchild of the employee (including biological, foster, adopted or step grandchildren); and the sibling of the employee (including biological, foster, adopted or step siblings).
Employer Coverage
Employer coverage is determined by calculating the average monthly number of employees employed during the immediately preceding year. The definition of “employer” includes “a person that acts directly or indirectly in the interest of another person with an employee,” which means that there may be individual owner or supervisor liability.
Employee Coverage
The Act does not apply to: 1) independent contractors; 2) real estate sales people or associate real estate brokers; 3) employees under 18 years of age at the beginning of the year; 4) agricultural employees; 5) temporary staffing agency employees, if the agency does not have daily control over their work assignments and supervision; 6) employment agency employees providing part-time or temporary services to another person; 7) employees who regularly work less than 12 hours per week; 8) construction employees who are covered by a collective bargaining agreement that expressly waives the right to MHWFA leave; and 9) workers who provide services on an as-needed basis in the health or human services industry and who meet certain other criteria.
Accrual, Carry-Over and Use of Leave
Under the Act, sick and safe leave must accrue at a rate of at least 1 hour for every 30 hours worked, up to 40 hours per year. Exempt employees accrue leave based on the lesser of a 40-hour workweek or the number of hours that they are regularly scheduled to work. Employers may cap leave at 40 hours per year and 64 hours at any time. Employees are entitled to carry over accrued leave of up to 40 hours per year, subject to the 64-hour cap, unless the employer permits the employee to use the full amount of required leave at the beginning of each year.
Leave is not required to be accrued during: 1) a 2-week period in which the employee worked less than 24 hours; 2) a 1-week period in which the employee worked less than 24 hours in the current and immediately preceding pay period; or 3) a semi-monthly pay period in which the employee works less than 26 hours.
The employer may choose a 12-month period during which the leave accrues. Accrual must begin upon hire, but the employer may prohibit use of the leave during the initial 106 calendar days of employment.
Employers with existing paid leave policies may continue those policies as long as: 1) the policy meets the minimum accrual requirements of the MHWFA; or 2) does not reduce pay due to absence for sick or safe leave reasons. Such paid leave policies may include vacation, sick, short-term disability, floating holidays, parental leave or any other paid time off that may be used for covered sick or safe leave.
The MHWFA permits employees to take leave in the smallest increment that the employer’s payroll system uses to track absences or use of school time. Employers, however, may require employees to take covered leave in increments of four hours or less. Employers must provide paid leave at the employee’s normal pay rate and tipped employees must be paid at the full state minimum wage.
Requesting MHWFA Leave
An employer may require that an employee request MHWFA leave in advance, if the leave is foreseeable (but not more than 7 days in advance). For unforeseeable MHWFA leave, the employee must provide notice as soon as practicable. An employer may deny MHWFA leave if the employee fails to provide required notice and the leave will cause disruption of service to a client.
An employer may require verification that leave was used for a covered purpose when the employee uses leave for more than 2 consecutive scheduled shifts. An employer also may require verification of leave usage if the leave is taken between the first 107 and 120 days of employment and the employee agreed to provide written verification at the time of hire.
Issues Relating to Termination of Employment
The Act does not require a payout of accrued MHWFA sick and safe leave upon termination of employment. Employers may advance unaccrued sick and safe leave, but are not required to do so. Employers who advance leave may deduct any unearned advanced leave from pay upon termination of employment, but only if the employee specifically authorized the deduction in writing at the time that the leave was advanced.
If an employee is rehired within 37 weeks after termination, the employer must reinstate the employee’s unused leave unless it was paid out upon termination.
Non-Retaliation and Enforcement Provisions
The Act specifically prohibits employers from taking adverse action against an employee who exercise his or her MHWFA rights in good faith. “Adverse action” includes discharge, demotion, threatening discharge or demotion or any other action that results in a change in the terms and conditions of employment.
The Act also prohibits an employer from interfering with, restraining or denying an employee’s rights under the Act.
Employees may file a written complaint of violation of the Act with the Commissioner of DLLR. DLLR must investigate the complaint within 90 days and may attempt to informally mediate any issues. If DLLR finds a violation and cannot resolve it informally, DLLR may issue an order directing that the employer pay the employee for the leave, any economic damages that arose, three times the value of the employee’s hourly wage and a civil penalty up to $1,000. If the employer does not comply with the order within 30 days, DLLR may file a civil action. The employee also may file a civil action to enforce DLLR’s order within 3 years of the date of the order. If the employee files a lawsuit to enforce the order, the court may award three times the value of unpaid leave, punitive damages, attorneys’ fees and costs and may issue an injunction.
Employer Notice and Documentation Requirements
Employers are required to provide notice to employees that they are entitled to MHWFA leave. The notice must include: 1) a statement of how leave is accrued; 2) permitted uses of leave; 3) a statement that the employer cannot take adverse action because the employee exercises rights under the Act and that employees may not in bad faith make a complaint, bring an action or testify in an action; and 4) information about the employee’s right to make a complaint to the Commissioner of Labor, Licensing and Regulation or file a lawsuit against the employer.
In addition, Employers are required to provide a written statement of available MHWFA leave, each time that wages are paid. This notice may be provided through an electronic program through which employees can access their balance.
Employers must maintain records of MHWFA leave for a minimum of three years. If they fail to do so, there is a rebuttable presumption that they violated the Act.
Conclusion
The highly technical aspects of the MHWFA create a minefield of compliance issues. Contact this office with questions or compliance assistance.
[1]A bill was introduced to extend the effective date until April, but that bill did not pass.
[2] Employers with employees in Montgomery County are still required to comply with Montgomery County’s sick and safe leave law in addition to the requirements of the MHWFA. The Prince George’s County sick and safe leave law, however, is pre-empted by the MHWFA.
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This Update is provided for informational purposes only. It is not intended as legal advice nor does it create an attorney/client relationship between the Moore Law Group LLC and any readers or recipients. Readers should consult counsel of their own choosing to discuss how these matters relate to their individual circumstances. Reproduction in whole or in part is prohibited without the express written consent of Moore Law Group LLC.
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