Maryland Passes Paid Sick Leave Law

As the 2018 calendar year (and, by extension, flu season) are now upon us, so too is the
country’s ninth statewide paid sick leave law. On January 12, 2018, the Maryland Senate voted
to override Governor Larry Hogan’s 2017 veto of a paid sick leave bill that was passed by the
Maryland legislature during the 2017 legislative session. The Senate’s successful vote follows
the Maryland House of Delegates’ vote from January 11, 2018 to override the Governor’s paid
sick leave veto. The Maryland paid sick leave law, which is known as the Healthy Working
Families Act (“HWFA” or the “Act”) is scheduled to go into effect on February 11, 2018.

Here are some of the highlights of the HWFA:

Employee Eligibility: The HWFA excludes certain individuals from its definition of “employee.”
Specifically, the HWFA excludes individuals who (a) work under a contract for hire that is
determined not to be covered employment under Maryland law, (b) are certain licensed real
estate salespersons or brokers, (c) are under the age of 18 years old before the beginning of the
year, and (d) are employed in the agricultural sector on an agricultural operation.

Covered Employers: Employers with 15 or more employees must provide paid sick and safe
leave benefits to eligible employees, while employers with fewer than 15 employees must
provide their employees with unpaid sick and safe leave benefits. An employer’s number of
employees is determined by calculating the average monthly number of employees employed
during the immediately preceding year. The HWFA explains that each employee of an employer
is included in this calculation, regardless of whether the employee is a full-time, part-time,
temporary or seasonal employee or would be eligible for paid sick leave under the HWFA.

Start of Accrual: Employees begin to accrue sick and safe leave on the later of their date of hire
or, presumably due to the delay in overriding the vetoed sick leave bill, the HWFA’s February
11, 2018 effective date or other effective date that is set (see above for further discussion on the
HWFA’s effective date).

Accrual of Sick Leave: Eligible employees will accrue sick and safe leave at a rate of at least one
hour for every 30 hours worked. Unlike most paid sick leave laws and ordinances which contain
either an annual accrual cap or a “point in time” accrual cap, covered Maryland employers must
comply with both forms of accrual caps. The HWFA states that employees can accrue up to 40
hours of sick and safe leave per year. Further, the HWFA sets a 64 hour “point in time” accrual
cap, meaning that employers are only required to allow employees’ bank of accrued, unused sick
and safe leave to reach 64 hours at any one time.

Usage Cap: Employers must allow eligible employees to use at least 64 hours of sick and safe
leave in a year.

Year-End Carryover: Subject to the “frontloading” exception discussed below, employees must
be allowed to carry over up to 40 hours of earned, unused sick and safe leave at year-end.

Frontloading: The HWFA states that employers can award employees the full amount of sick and
safe leave that they would earn over the course of the year at the start of each year instead of

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following an accrual system. Moreover, adopting a frontloading system will absolve employers’
year-end carryover obligations under the Act.

Usage Waiting Period: Employers are not required to allow an eligible employee to begin using
earned sick and safe leave during the first 106 calendar days the employee works for the
employer.

Increments of Use: While an employer generally must allow employees to use sick and safe
leave in the smallest increment that the employer’s payroll system uses to account for absences
or use of the employee’s work time, the HWFA expressly states that an employer can require
employees to take the leave in an increment not exceeding four hours.

Protected Reasons for Use: Under the HWFA, employees can use sick and safe leave for the
following absences: (1) To care for or treat the employee’s own mental or physical illness, injury
or condition, or to obtain preventive medical care; (2) To care for a covered family member with
a mental or physical illness, injury or condition, or to obtain preventive medical care for the
family member; (3) For maternity or paternity leave; or (4) For certain absences from work that
are necessary due to domestic violence, sexual assault, or stalking committed against the
employee or the employee’s covered family member.

Covered Family Members: The HWFA defines covered family members to include children,
parents, spouses, grandparents, grandchildren, and siblings. “Child” includes a biological,
adopted, foster, or step child of the employee, a child for whom the employee has legal or
physical custody or guardianship, and a child for whom the employee stands in loco parentis,
regardless of the child’s age. “Parent” includes a biological, adoptive, foster or step parent of the
employee or the employee’s spouse, the legal guardian of the employee, and an individual who
acted as a parent or stood in loco parentis to the employee or the employee’s spouse when they
were a minor. The HWFA defines “grandparent,” “grandchild,” and “sibling” to include
biological, adoptive, foster and step relationships.

Payment of Leave: When employees use paid sick and safe leave under the HWFA, the leave
should be paid at the same wage rate as the employee normally earns. Employers are not
required to pay a tipped employee more than the applicable minimum wage for use of paid sick
and safe leave.

Notice of Available Leave: The HWFA mandates that employers provide employees with a
statement of their available sick and safe leave balance each time wages are paid. This
requirement can be met through the use of an online system.

Notice and Posting Requirement: The HWFA states that employers must notify employees of
their entitlement to sick and safe leave under the Act. The notice must include various topics,
including a statement about how sick and safe leave is accrued and the reasons for which the
leave can be used under the Act. While the Act does not state whether this notice requirement
includes a posting obligation and/or obligation to provide individual notice to employees upon
hire, it does state that the Maryland Commissioner of Labor and Industry must create and
distribute to employers a poster and model notice for compliance with this notice requirement.

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Recordkeeping: Employers must keep for at least three years a record of sick and safe leave
accrued and used by each employee.

No Payout on Termination: The HWFA does not require employers to compensate employees
for earned, unused paid sick and safe leave upon separation of employment. However, if an
employee is rehired by the employer with 37 weeks of separation, the employer must reinstate
any earned, unused sick leave to the employee. This reinstatement requirement does not apply if
the employer paid an employee for his/her unused sick and safe leave upon separation.

Employers should take steps now to comply with the requirements of HWFA before the
Act’s current February 11, 2018 effective date.

© 2017 by Karla Grossenbacher

Karla Grossenbacher is the Vice President for Legislative Affairs on the NOVA SHRM
Board, and chairs the labor and employment practice in the Washington, D.C. office of Seyfarth
Shaw LLP. Karla Grossenbacher appreciates the efforts of Joshua Seidman and Tracy Billows in
preparing this article. If you have any questions about the information in this article, you may e-
mail Karla at kgrossenbacher@seyfarth.com or call her at 202-828-3556.

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