Massachusetts Sick Leave Law Final Regulations (June 2015)

By now, most Massachusetts employers are aware that they must provide sick leave to all employees by July 1, 2015, unless they take advantage of the Safe Harbor to extend their compliance to January 1, 2016. In summary, the Sick Leave Law (the “Law”) requires all Massachusetts employers with at least 11 employees to give employees working in Massachusetts (even for part of their work time) at least 1 hour of paid sick time for every 30 hours they work, up to a total of 40 hours per year. Employers with fewer than 11 employees must grant the same sick time but it need not be paid.

Employees may use that time to care for the employee’s own medical condition or the medical condition of the employee’s child, spouse, parent or spouse’s parent, to attend a medical appointment for the employee or the employee’s child, spouse, parent or spouse’s parent, or address the effects of domestic violence (“Qualified Reasons”).

The Law directed the Attorney General to draft regulations interpreting the Law. On June 19, 2015, just 11 days before the law goes into effect, the Attorney General issued the long-awaited “Final Regulations” (“Regulations”). Below, we have summarized some of the most important issues addressed by the Regulations.

Because the following is a summary, we do not comprehensively describe all the subjects covered by the Regulations. Employers should consult the full text of the Regulations if they have specific questions.
Rate of Pay
Hourly employees must be paid sick time based on their regular hourly rate. Salaried employees accumulate and are paid sick time based on a 40 hour week, even if they typically work more than 40 hours each week. Sick time for part time salaried employees is based on their usual schedule.

Tipped employees receiving the standard service rate must be paid the applicable minimum wage rate for all employees ($9.00 per hour as of January 1, 2015).

Commissioned employees receive the greater of their base wage (if any) or the current minimum wage rate.
Accrual of Sick Time

As stated above, employees must earn at least 1 hour of sick time for every 30 hours they work, including overtime hours, up to 40 hours per Benefit Year. Employers may elect a fiscal, calendar or other 12 month period as their “Benefit Year”. After employees have accrued 40 hours in a Benefit Year, employers may stop the accrual of any further sick time. Employees may roll over up to 40 hours of unused earned sick time to the following Benefit Year.

However, employers are not required to grant, or allow employees to retain, any more than a total of 40 sick time hours per Benefit Year. Therefore, if an employer grants employees at least 40 hours of time they may use for a Qualified Reason as of the beginning of the Benefit Year, that employer is not required to allow those employees to carry over any accrued sick time.

New employees begin to accrue sick time immediately upon their hire but may not use the time for ninety calendar days.

Use of Sick Time
The smallest initial increment of sick time an employee can use is 1 hour. After an employee has been absent for an hour, however, employers must use the smallest increment of time the employer’s payroll system uses to track the additional time. For example, if an employer tracks employees time in 5 minute increments, an employee who is out sick for 45 minutes will be charged with one hour of sick time; an employee who is out for 1 hour and 10 minutes will be charged for 1 hour and 10 minutes of sick time.

The Regulations state that employees may not invoke sick time as an excuse to be late for work unless their lateness was due to Qualified Reason. Additionally, the Regulations state that employers may discipline employees who use sick time not for a Qualified Reason — for example as a vacation day. However, since the Law significantly restricts an employer’s ability to ask for medical documentation, this provision will be difficult to enforce.

If an employee has a clear pattern of taking leave just before or after a weekend, vacation or holiday, his/her employer may discipline the employee unless s/he provides verification that s/he was out for a Qualified Reason. The Regulations do not describe what constitutes a “clear pattern”. However the Regulations do permit an employer to demand documentation from an employee who has taken 4 unforeseeable and undocumented absences within a 3 month period.
Replacement Employees
One of the most important features of the Regulations addresses employers who must hire replacement employees. If an employer must hire a replacement for an employee who calls in sick, the employer may require the employee to use sick time for the number of hours the replacement works, up to a full shift. If the employee does not have enough sick time hours, the remainder of the time is unpaid but job-protected. Presumably, therefore, if a school had to hire a full-day substitute teacher for a faculty member who called in sick, the school could require the faculty member to take the entire day as sick time.

Break in Service
Employees with a break in service of up to 4 months must be credited with the full amount of unused sick time they had accrued before the service break.

Following a break in service of between 4 and 12 months, returning employees must be credited with the unused sick time they had accrued before the service break only if they had accrued at least 10 hours of sick time. Presumably that change was designed to address employers’ concerns about keeping track of small amounts of accrued sick time for former employees. However, employees working 40 hours per week will accrue 10 hours of sick time after 7 1/2 weeks’ (300 hours) of work. Therefore, employers will have to continue to keep track of accrued sick time for most former employees.

In addition, an employee who returns to work for the same employer within 12 months may begin to use their sick time immediately and need not wait 90 days.
Transition Year
The Regulations recognize that 2015 is a “Transition Year” and provide guidance for employers during the period from July 1 and December 31, 2015.

Employers will be deemed in compliance with the Law if they had a policy in effect as of May 1, 2015 that granted full time employees the right to earn and use at least 40 hours of paid time off that they could use for a Qualified Reason.

Employers who have already given employees paid time off that they could use for Qualified Reasons will be credited with that time in calculating if employees have received 30 hours of paid time off during the Transition Year. For example, if an employee has accrued 15 hours of Paid Time Off (“PTO”) that s/he may use for Qualified Reasons by July 1, the employer can credit the employee with 15 hours of accrued sick time and must allow the employee to accrue 25 hours of additional sick time by December 31.
Safe Harbor
The Regulations include the previously issued “Safe Harbor” guidelines. Employers who had a policy as of May 1, 2015 that met certain conditions will be considered in compliance with the Law until January 1, 2016. Those conditions are summarized below.

Under the policy, full time employees must earn at least 30 hours of paid time off in 2015 which they could use for Qualified Reasons.

Effective July 1, 2015, all employees who were not covered by the policy must begin to accrue paid time off at the same accrual rate as full time employees or, if full time employees receive the paid time off in a lump sum, receive a proportional lump sum award of time to use for Qualified Reasons.

To take advantage of the Safe Harbor, the sick time must be job protected and employers must follow the Law’s anti-retaliation provisions. Finally, employees must be permitted to carry over up to 40 hours of unused sick time to 2016. Note, as discussed above, if employees receive a lump sum grant of at least 40 hours of sick time on January 1, no carryover of unused, accrued sick time is necessary.
Calculation of Employees
Employers having an average of at least 11 employees during the prior benefit year must provide the sick time as paid leave. All employees must be included in the calculation, including temporary, seasonal, part time and employees provided by a temporary staffing firm. In addition, employees working outside Massachusetts must be included in the calculation, although they are not entitled to sick time under the Law.

Documentation
The Regulations provide that employers may not require employees to provide documentation about the nature of the illness or domestic violence as a condition of granting or allowing the employee to use sick leave. While employers may require written documentation signed by a health care provider indicating the need for sick time, they may only require such documentation if the employee’s use of sick time:

exceeds 24 consecutively scheduled work hours;
exceeds 3 consecutive days the employee was scheduled to work;
occurs during the 2 weeks prior to the employee’s final scheduled day of work, except for temporary employees; or
occurs after 4 unforeseeable and undocumented absences within a 3 month period.
Employees must submit the documentation within 7 days of taking the sick time unless the employee demonstrates that s/he needs more time.

If the employee fails to provide the required documentation, the employer may deduct the sick leave payment from the employee’s wages, provided employees are put on notice of that policy.

Employers may require employees to verify in writing that they have used sick time for a Qualified Reason, as long as they are not required to describe their illness.

Employers may require a fitness for duty certification or similar documentation from a medical provider before an employee returns from using sick time if such certification is usual and consistent with industry practice or safety requirements and the employer has a reasonable belief of significant risk of harm to the employee or others.
Allowable Employer Policies
Employers may adopt their own policies, and can have different paid leave policies for different groups of employees, provided they give employees the same amount of time to use for Qualified Reasons under the same conditions as required by the Law. Employers may substitute a PTO, vacation or other policy for the earned sick leave requirement provided at least 40 hours of time off under that policy may be used for Qualified Reasons and employees accrue at least 40 hours of that time at the rate of no less than one hour for every 30 hours of work.

An employer who adopts a policy that meets the above requirements need not give employees additional time for a Qualified Reason if the employee has used all their time for another reason provided the employer’s leave policy makes it clear that employees will not receive any additional time. Such employers need not separately tract the employees use of sick time under that policy.

Employers that give employees a lump sum of at least 40 hours at the beginning of a benefit year that may be used for a Qualified Reason need not track accrual or allow any rollover of unused time from one year to the next. However, note that paid time off that may be used for a vacation as well as sick time must be paid to employees upon their separation from employment.

Employers may adopt a separate use policy for any paid time off in excess of 40 hours. However, in that case, the employer must track the use of sick time separately.

If an employer does not wish to track employees’ accrual of sick time, the Regulations provide a schedule employers may use to grant employees sick time on a monthly basis.
Prohibition on Retaliation and Interference
Employers may not discipline employees for using earned sick time or consider the use of accrued sick time as a negative factor in any employment action. Employers may not take any adverse action against an employee who opposes any perceived violation of the Law or supports employees’ rights under the Law.

However, the Regulations state (somewhat ambiguously) that employers may adopt policies rewarding employees for good attendance and may deny employees “a holiday pay incentive” if they fail to report to work on the day immediately before and after a holiday. Presumably that means that employers may continue to enforce policies denying holiday pay to employees who do not work the day before or after a holiday, but the language of the regulations is somewhat unclear.
Notice
The Attorney General has issued a Notice describing employees’ rights under the Law. That notice must be posted in a conspicuous place accessible to employees in every location where eligible employees work.

Employers must also provide a hard or electronic copy of that Notice to all eligible employees or include a description of the employer’s allowable substitute policy on earned sick, PTO or vacation time in the employer’s Employee Handbook.

TO DO

1. Determine if you qualify for, and wish to take advantage of, the Safe Harbor, delaying implementation of many facets of the Law until January 1, 2016.

2. Establish your Benefit Year.

3. Review your time off policies to ensure that all employees, including part-time, temporary and seasonal employees, accrue at least 1 hour of paid time off they can use for a Qualified Reason for every 30 hours they work.

4. If you have a paid PTO or vacation policy that permits employees to use that time for a Qualified Reason, ensure that all employees receive that time either as a lump sum at the beginning of a Benefit Year or accrue it at a rate at least as fast as 1 hour for every 30 hours worked.

5. Consult your payroll provider to determine the smallest amount they track.

6. Ensure that your payroll service will record and track accrual of sick time for all employees as required by the Law and will keep a record of accrued sick time for departing employees for one year.

7. Discontinue any practice of automatically disciplining employees for absences and replace it with a system that does not discipline employees for using accrued sick time. However, you may continue to discipline employees who take time off in excess of their earned sick time.

8. If necessary, change your practice of requiring medical documentation of all sick leave absences to conform to the Law.

9. Put employees on notice, either in the Employee Handbook or other communication, that you will deduct any sick leave payment from an employee’s future wages if s/he does not provide required medical documentation supporting a sick leave absence.

10. Notify employees, either in the Employee Handbook or other communication, that if you have a vacation or other PTO policy that allows employees to use the time for a Qualified Reason, and the employee has used all that time for any purpose, they will not receive any additional time if they or a family member is sick or the victim of domestic violence.

11. Post the Attorney General’s Sick Leave Notice in a conspicuous place and incorporate your sick leave policy in a written communication to employees, such as an Employee Handbook.

If you have any questions about the Law or the Regulations, please contact us.