United States: Attorney General Provides Final Regulations For MA Earned Sick Time Law
New Regulations Offer Guidance to Employers to Ensure Sick Time Policies Comply

Matthew Mitchell is a Partner and Ari Zivyon is an Associate in the Boston office

HIGHLIGHTS:

• The new Massachusetts Earned Sick Time Law goes into effect on July 1, 2015, and mandates that all employees in Massachusetts must be allowed to accrue and use up to 40 hours of earned sick time in a calendar year, subject to certain conditions.
• The final regulations address a number of issues regarding accrual, use and documentation of sick time, as well as the temporary safe harbor for employers with current paid time off policies.
• Employers with a paid time off policy in existence on May 1, 2015, are deemed in compliance with the law until Jan. 1, 2016, if they meet all of the specific criteria outlined in the law.

The Massachusetts Attorney General's Office released final regulations concerning the Massachusetts Earned Sick Time Law (M.G.L. c. 149, §148C). The Massachusetts Earned Sick Time Law goes into effect on July 1, 2015. The final regulations offer guidance to employers to ensure that their sick time policies meet the requirements of the law. The key provisions of the final regulations, which were released on June 19, 2015, are outlined below.

Applicability

• The law applies to any individual, corporation, partnership or other public entity that engages the services of an employee for wages, remuneration or other compensation. (However, certain governmental entities are specifically excluded from the law.)
• The law may apply to all employees whose primary place of work is in Massachusetts, including full-time employees, part-time employees, seasonal employees and temporary employees.
• The law allows employees in Massachusetts to earn and use up to 40 hours of sick time per year.
• For employers with 11 or more employees, sick time must be paid. For employers with one to 10 employees, sick time may be unpaid.

Accrual and Use of Earned Sick Time

• Employees accrue, or earn, one hour of sick time for every 30 hours worked, including overtime and hours worked outside of Massachusetts. Employees can earn and use up to 40 hours of earned sick time in a single calendar year (defined as any consecutive 12-month period of time as determined by an employer; e.g., tax year, fiscal year, contract year or year beginning on an employee's anniversary date of employment).
• Employees accrue earned sick time only on hours worked, not on hours paid while not working. Thus, employees do not earn sick time during vacation, paid time off and while using earned sick time.
• New employees begin accruing earned sick time on the first date of actual work. These employees may begin to use any accrued earned sick time 90 days following their first dates of actual work, regardless of the number of days worked during the 90-day period.
• Existing employees who have been employed for at least 90 days as of July 1, 2015 (on or before April 2, 2015), may use earned sick time, whether paid or unpaid, as it accrues.
• Once employees have accrued 40 hours of earned sick time during the calendar year, they do not continue to accrue more hours of sick time, regardless of additional hours worked.
• At the end of the calendar year, an employee may roll-over up to 40 hours of unused earned sick time to the next calendar year.
• By mutual agreement, employees may arrange to use earned sick time before accruing it and employers may count the use against future accrual.

Reasons for Using Earned Sick Time

Earned sick time may be used for the following reasons:

• to care for a physical or mental illness, injury or medical condition affecting the employee or the employee's child, spouse, parent or parent of a spouse
• to attend routine medical appointments of the employee or the employee's child, spouse, parent or parent of a spouse
• to address the effects of domestic violence on the employee or the employee's dependent child

Providing Notice of and Planning to Use Sick Time

• Employees must notify their employers before they use earned sick time, except in an emergency situation.
• For foreseeable or pre-scheduled use of earned sick time, employers may have a written policy requiring up to seven days' notice, recognizing that there are certain situations, such as accidents or sudden illness, for which advance notice might be infeasible.
• For multi-day absences, employers may require notification of the expected duration of the leave or, if unknown, then on a daily basis from the employee or the employee's surrogate (e.g., spouse, adult family member or other responsible party), unless the circumstances make such notice unreasonable.
• The smallest amount of earned sick time an employee can use is one hour. Employees may use earned sick time in hourly increments or in the smallest increment the employer's payroll system uses to account for absences or use of other time.
• An employee may not use earned sick time if the employee is not scheduled to be at work during the period of use.
• Employees cannot attempt to use earned sick time as an excuse to be late for work without an authorized purpose.
• If an employee's use of earned sick time requires an employer to hire a replacement or call in another employee, the employer may require the employee to use an equal number of hours as the replacement or call-in employee works, up to a full shift of earned sick time. If an employee lacks sufficient accrued earned sick time to cover such time away from work, the employer must provide sufficient job-protected unpaid leave to make up the difference in that shift.

Written Documentation

An employer may require written documentation for an employee's use of earned sick time that:

• exceeds 24 consecutively scheduled work hours or three consecutively scheduled work days
• occurs within two weeks before an employee's final scheduled day of work before termination of employment (except as to temporary employees)
• occurs after four unforeseeable and undocumented absences within a three-month period

Under these circumstances, an employer may require an employee to submit written documentation signed by a healthcare provider indicating the need for the earned sick time taken. However, an employer may never require – as a condition of granting, using or verifying earned sick time – that an employee provide documentation to explain the nature of the illness or the details of domestic violence.

Employees must submit required written documentation within seven days after taking earned sick time, unless an employee has demonstrated good cause to require more time to provide such documentation.

If an employee fails to comply without reasonable justification with these documentation requirements, the employer may take the following measures: recoup the sum paid for earned sick time from future pay, as an overpayment; and deny the future use of an equivalent number of hours of accrued sick time until documentation is provided, but may not otherwise take adverse action.

Discipline for Fraud or Abuse

• If an employee commits fraud or abuse by engaging in an activity that is not consistent with allowable purposes for earned sick time, the employer may discipline the employee for misuse of sick time.
• If an employee exhibits a clear pattern of taking leave on days just before or after a weekend, vacation or holiday, the employer may discipline the employee for misuse of earned sick time, unless the employee provides verification of authorized use under the law.

Payment to Employees for Used Earned Sick Time

• Earned sick time is compensated at the employee's regular hourly rate that cannot be less than the effective minimum wage.
• For employees paid a salary, the regular hourly rate is the employee's total earnings in the previous pay period divided by the total hours worked during the previous pay period (employees exempt under the FLSA will be assumed to work 40 hours in each week, unless their normal work week is less than 40 hours).
• The "same hourly rate" does not include overtime, holiday pay or other premium rates. An employee who is paid a "differential rate" (such as a higher rate for working a night shift) is to be paid at that rate.
• Earned paid sick time must be paid on the same schedule as regular wages are paid.
• Employers are not required to pay out unused earned sick time at the end of the benefit year or upon an employee's separation from employment.

Transition Year – "Safe Harbor" – Provisions

Employers with a paid time off policy in existence on May 1, 2015, are deemed in compliance with the law until Jan. 1, 2016, if they meet all of the following criteria:

• Full-time employees under the policy have the right to earn and use at least 30 hours of paid time off/paid sick leave between Jan. 1, 2015, and Dec. 31, 2015
• On or after July 1, 2015, all employees (including part-time, seasonal, temporary and per diem) not previously covered by the policy (i) accrue paid time off at the same rate of accrual as full-time employees; or (ii) if the policy provides lump-sum allocations, covered full-time employees receive a prorated lump-sum allocation.
• The 30 hours of paid time off/paid sick leave (or lesser amounts earned) are (i) treated as job-protected leave subject to the law's anti-retaliation provisions; (ii) available for the allowed purposes under the law; and (iii) available to the employee after Jan. 1, 2016, if unused during the transition year, unless the policy provides lump sum allocations that make rollover unnecessary.

On or before Jan. 1, 2016, all employers operating under the Safe Harbor provision must adjust their policies providing paid time off/paid sick leave to conform to the law.

Concurrent Employer Paid Leave Policies

• Employers that provide 40 or more hours of paid time off or vacation to employees that also can be used as earned sick time are not required to provide additional sick leave to employees who use their earned time for other purposes (such as vacation) and have need of sick leave later in the year – as long as the employer's leave policies make clear that additional time will not be provided.
• Employers may provide different paid leave policies for different groups of employees, so long as all eligible employees are provided the minimum requirements under the law (for example, full-time employees can be allowed 80 hours of paid time off per benefit year while per diem works can receive earned sick time at the rate of accrual of one hour for every 30 hours worked, capped at 40 hours per year).  

Record-keeping

• Employers must maintain records of the accrual and use of earned sick time as required under the Minimum Fair Wages Act (M.G.L. c. 151, §15), unless the employer provides paid time off under a separate policy that complies with the law and such time is tracked under that policy. 
• All such records must be maintained for three years and be made available to an employee upon request within 10 business days.
• Employers must provide to all eligible employees a hard copy or electronic copy of the notice of the law prepared by the attorney general, or they must include the employer's policy on earned sick time or substitute paid leave policy in any employee manual or handbook.

What Employers Should Do Now to Be in Compliance

• Review existing paid time off policies (if any exist) to determine whether such policies currently comply with the law under the Safe Harbor provisions, and under the criteria required beginning on Jan. 1, 2016, and update all such policies as necessary.
• Pay particular attention to the sick time coverage afforded to part-time, seasonal or temporary workers, and update any paid time off policies to ensure that these class of employees (in addition to full-time employees) are properly covered under the law.
• Prepare a record-keeping system to monitor and track employees' accrual and use of earned sick time, and ensure that earned sick time records are maintained and not automatically deleted.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.