Final Regulations Detail Employers’ Obligations Under New Massachusetts Earned Sick Time Law
[June 24, 2015] Last Friday, the Massachusetts Attorney General’s Office issued its eagerly-anticipated final regulations under the new Massachusetts earned sick time law, which goes into effect on July 1, 2015. The final regulations, which significantly amend the proposed regulations issued earlier this year, can be found here.
While the final regulations do not address every potential issue under the new law, they provide useful guidance to employers on many important questions. The most significant provisions of the final regulations are detailed below, following a brief summary of the earned sick time law.
Earned Sick Time Law
Under the new earned sick time law, all Massachusetts employees must be allowed to accrue and use up to 40 hours of earned sick time per year, based on a minimum accrual formula of one hour of earned sick time for each 30 hours worked. For employers with at least eleven employees, sick time must be provided on a paid basis, whereas employers with fewer than eleven employees may provide unpaid sick time.
Employees must be allowed to begin accruing sick time immediately upon hire. However, employees are entitled to use accrued sick time only after 90 days of employment.
An employee may carry over up to 40 hours of accrued, unused sick time into the following year. Employees are not entitled to payment for accrued, unused sick time upon separation from employment.
The chief requirements of the earned sick time law are further detailed in an e-alert previously published by the Firm.
The final earned sick time regulations expand upon these requirements, including with regard to the following:
Employer Size. An employer must provide paid earned sick time if it maintained an average of eleven or more employees on its payroll during the preceding benefit year. This number is calculated by counting the number of employees – including full-time, part-time, seasonal, and temporary employees (whether paid directly by the employer or through a temporary agency) – on the payroll during each pay period and dividing by the number of pay periods. Before switching from paid to unpaid earned sick time (or vice versa) based on a change in its headcount, an employer must provide employees with at least 30 days’ written notice.
Employee Eligibility. An employee is entitled to accrue and use earned sick time if his or her primary place of work is in Massachusetts, regardless of the employer’s location. If an employee meets that requirement, the employee is eligible to accrue earned sick time on all of his or her work hours, including work outside of Massachusetts.
Benefit Years. An employee’s annual earned sick time entitlement may be determined on the basis of any 12-month time period chosen by the employer. For instance, earned sick time may be provided based on each employee’s anniversary date of employment. Alternatively, earned sick time may be tied to calendar or fiscal years.
Lump-Sum Accruals. If an employer provides employees, up front, with at least 40 hours of earned sick time at the start of each benefit year, the employer need not track accrual of earned sick time or allow unused accrued time to be carried over into the next benefit year.
PTO Policies. In lieu of a separate paid sick time policy, an employer may maintain an overall paid time off (“PTO”) policy, so long as the PTO policy allows employees to accrue and use PTO in the same manner as under the earned sick time law. Further, if an employee uses 40 hours or more in accrued PTO for other purposes (e.g., vacation), the employer need not provide additional earned sick time, so long as the employer’s policies make clear that such additional leave will not be given.
Notification. Except in the event of an unforeseeable absence, an employee must provide prior notification of his or her intention to use earned sick time. In the case of foreseeable or prescheduled use, an employer may require up to seven days’ advance notice. For unforeseeable absences, notice must be “reasonable.”
Increments Of Use. For an absence of up to one hour, an employer can require an employee to use a full hour of earned sick time. For absences greater than one hour, an employer must track the absence using the smallest increment the employer uses to track other types of absences.
Documentation. An employer may require written documentation when an employee uses earned sick time exceeding (i) 24 consecutively scheduled work hours or (ii) three consecutive days on which the employee was scheduled to work. In addition, documentation may be required where an employee takes sick time during his or her final two scheduled weeks of work or takes more than four unforeseeable, undocumented absences within a three-month period. The regulations specify that, in providing documentation, an employee cannot be required to explain the nature of his or her illness or the details of a domestic violence situation.
Failure To Provide Documentation. If an employee unreasonably fails to provide required documentation for paid earned sick time, the employer may recoup the amount paid from the employee’s future pay, so long as employees have been put on notice of such a practice. In the case of unpaid earned sick time, the employer may deny the employee future use of an equivalent amount of earned sick time until the documentation has been provided. The employer may not, however, take any further adverse action.
Use Restricted To Scheduled Work Time. An employee may use earned sick time only for scheduled work time, and may not accept a work assignment with the intention of calling out sick for some or all of the assignment.
Concurrent Use. Earned sick time taken under the statute may run concurrently with leave taken for similar purposes under other leave laws (e.g., the Family and Medical Leave Act).
Breaks In Service. The regulations prescribe the following rules for breaks in service: (i) following a break in service of up to four months, an employee must be allowed to retain all accrued earned sick time; (ii) following a break in service of between four and twelve months, an employee is entitled to retain all accrued earned sick time so long as he or she had at least ten hours of accrued time; (iii) after returning from a break in service of up to twelve months, an employee maintains his or her original vesting date and need not start a new 90-day period before using earned sick time.
Attendance/Holiday Incentives. The earned sick time law does not preclude employers from maintaining policies that reward employees for good attendance or for working immediately prior to or after holidays.
Fraud/Misuse. Employees may be disciplined for fraud or misuse of earned sick time. If an employee demonstrates a suspicious pattern of absences (e.g., regularly calling out sick prior to or after weekends or holidays), the employee may be required to provide verification of proper use of earned sick time, or face discipline.
Distribution Of Policy. In addition to displaying a required workplace notice issued by the Attorney General, Massachusetts employers must provide employees with written notice of their rights under the earned sick time law. An employer may satisfy this requirement by e-mailing the Attorney General’s notice to employees or by including an appropriate sick time policy in its employee handbook.
Massachusetts employers should carefully consider, in consultation with experienced employment counsel, how their sick time policies may need to be revised to comply with the new earned sick time law. In this regard, while the law goes into effect on July 1, 2015, the Attorney General recently announced a “safe harbor” under which employers with existing sick time (or PTO) policies meeting certain requirements may take until January 1, 2016, to come into full compliance with the law. The requirements for the safe harbor are incorporated in the final regulations.
In addition, employers should ensure that all managers, HR employees and benefits personnel receive appropriate training on the requirements of the new law. Schwartz Hannum is pleased to offer such training. We will be conducting two upcoming trainings on the earned sick time law in our Andover office, on July 8, and September 10, 2015. The trainings will also address the new Massachusetts domestic violence and parental leave laws, and the interaction among the three laws. Please see our Seminars & Programs page for registration information.
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Please don’t hesitate to contact us if you have any questions about your organization’s obligations under the new Massachusetts earned sick time law.