Guest Post: Maryland’s New Healthy Working Families Act-What Employers Need to Know

February 5, 2018

Christine V. Walters, JD, MAS, SHRM-SCP, SPHR has more than 25 years’ combined experience in human resources administration, management, employment law practice and teaching. Ms. Walters is a human resources and employment law consultant d.b.a. FiveL Company, “Helping Leaders Limit Their Liability by Learning the Law.” Her volunteer leadership roles include and are not limited to Immediate Past Director of Gov’t Affairs for the MD SHRM State Council, Inc., and current member of the Maryland Chamber of Commerce’s Employment Relations Committee and the Central Maryland Chamber’s Legislative Committee. Ms. Walters is licensed to practice law in the State of Maryland.

Maryland’s New Healthy Working Families Act: What Employers Need to Know

For the last five consecutive years, Maryland business owners, managers, proponents, opponents and advocates all along the continuum have talked with elected officials about whether and/or how to craft a paid leave law that would balance employers and employees needs.  On January 12, 2018, the Maryland General Assembly enacted House Bill 01, the Healthy Working Families Act, overriding Governor Hogan’s veto of the bill in 2017. As of this writing, effective February 11, 2018 nearly all Maryland employers will be covered under this new law.  Those that employ 15 or more employees, must provide paid Sick and Safe Leave (SSL) for their employees who regularly work at least 12 hours per week.  Employers that employ fewer than 15 employees must provide the same leave, in the same manner with the exception that the leave may be unpaid. Employers on the cusp of the 15-employee threshold (at, above or below) may be wise to adhere to the formula in the law for determining on which side they fall.  So, what does the law require?  Here are some highlights:

1. If the employer uses a leave accrual system, SSL must begin to accrue from an employee’s first day of work at a rate of not less than one hour of leave for every 30 hours worked.
2. Eligible employees are those who regularly work at least 12 hours per week, including temporary employees.
3. An employer is not required to permit an employee to accrue more than 40 hours of SSL in a year.
4. An employee must be permitted to use his or her accrued SSL by not later than the employee’s 107^th day of employment.
5. At least 40 hours of accrued SSL must roll over from year to year, unless the employer front-end loads at least 40 hours at the start of each year.
6. An employee must be permitted to use at least 64 hours of accrued SSL in a year.
7. If an employee separates from employment and is rehired within 37 weeks, the balance of the accrued, unused SSL that was not paid out, if any must be reinstated.
8. An employer may not require an employee to search for or find a replacement for any shift or time missed from work while using SSL.
9. With some exceptions, an employer may not require an employee to provide medical certification of a covered absence of fewer than three consecutive work days.
10. An employer may not retaliate against an employee for using SSL or take any adverse employment action that would dissuade a reasonable employee from taking SSL.
11. …to name a few.

It appears the HWFA does pre-empt the Earned Sick and Safe Leave law passed by the Prince George’s County Council; it does not pre-empt Montgomery County’s Earned Sick and Safe Leave law.  But wait. Even if you are an employer whose business operations are outside of Montgomery County, you may still have one or more employees covered by Montgomery County’s law.  Take one employer in Anne Arundel county that offers work-flex options for its employees, including telecommuting or working from home.  The employer has one employee that telecommutes from the employee’s home in Montgomery County. That one employee may be covered under the County’s law. That law requires that leave be provided at the rate of at least one hour for every 30 hours an eligible employee works “in the County.” This may be an unintended consequence but, today that is the interpretation by some.

Prepare now. Ensure your current leave policies and payroll practices will comply with all the requirements of Maryland’s new law.  If not, ensure they are updated and will comply by February 11, 2018.

Stay tuned. On January 22, 2018, SB 304 was introduced to defer the enforcement of Maryland’s HWFA by 60 days. On Friday, February 2^nd the bill was unanimously passed by the Senate Finance Committee with amendments deferring the effective date to July 1, 2018.  The bill must still go to a vote in the Senate and then be considered by the House. We also anticipate implementing regulations will be issued by Maryland’s Department of Labor, Licensing and Regulation (DLLR) to guide us in how we are supposed to implement and administer this new law. As of this writing, we expect the preliminary regulations may not be published for notice and comment until after the close of this 438^th session of the Maryland General Assembly is adjourned on April 9, 2018.

Have Questions?  If so, you’re not alone.  Shortly after the law was passed, the Governor announced the creation of a new Office of Small Business Regulatory Assistance and named Randall Nixon as Executive Director. The Office will be working in conjunction with DLLR to shape the regulations, reference above.  The Office encourages business owners and others to submit to them any questions about how the law should be interpreted or administered.  This author has sent a list of at least eight questions to that office. Here are just a few:

• How is an employer to determine whether an employee “regularly” at least 12 hours per week? Assuming it will require a retrospective analysis and calculation of the average hours worked, over what period of time should that analysis be conducted?
• If it is then determined that an employee has retrospectively worked at least 12 hours per week will the requirement to provide paid leave begin as of the date of that calculation and moving forward or must it also then be calculated and provided retrospectively? If the latter, then over what period of time?
• Many employers offer one bank of paid time off, commonly known as “PTO,” rather than separate sick and vacation paid leave banks. PTO gives employees the flexibility to use paid leave for an absence for any reason: medical, personal or other. For reinstatement purposes upon rehire, how would an employer that offers PTO determine which portion of PTO was considered sick leave versus vacation or personal leave and must be reinstated?
• …and more.

You can submit your questions to the Office at [email protected]. In the interim, practice patience and be prepared as the interpretations unfold.

This article does not constitute the rendering of legal advice.
You should consult with your company’s employment counsel for guidance on any matter.

For more information on Christine Walters, visit her company website.

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