Paid leave: How to navigate the new paid time off landscape

Paid leave laws have emerged as one of the biggest human resource headaches of 2019. A just-released Littler employer survey found paid time off laws were a top concern for 69 percent of employers surveyed. Respondents cited new state and local paid leave laws as a compliance challenge given the patchwork nature of new rules. Many expressed concern that it was difficult or even impossible to develop universal time off policies. It’s easy to see why. Employers with multi-state operations have to track leave across multiple jurisdictions. Even single-state employers aren’t off the hook. Opening an office in a second city may trigger compliance with that city’s paid and unpaid leave rules.

Fortunately, you can develop a paid time off policy that complies with federal, state and local paid time off laws. The best approach is to start with a solid understanding of what’s required under federal law and build on that.

Federal unpaid leave mandates: The Family and Medical Leave Act (FMLA), the Americans with Disabilities Act (ADA) and the Uniformed Services Employment and Reemployment Rights Act (USERRA) mandate unpaid leave. The FMLA requires many employers to provide up to 12 weeks of unpaid medical and family leave. More time off is available for relatives when a family member deploys or is injured. In some cases, that additional unpaid leave may last 26 weeks. USERRA required unpaid leaves of absence for deployed military service members. Finally, the ADA requires that employers provide unpaid leave for disabled workers if doing so is a reasonable accommodation.

There is no general federal employment law requiring employers provide a paid leave of absence or other paid time off. Only federal contractors are required to provide any form of paid sick leave for their employees.

Of course, many employers do provide some paid time off for their workers. The FMLA allows employers to substitute paid leave for unpaid FMLA leave to satisfy their FMLA obligations. And employers are free to allow use of their paid time off for military service and disability related leave.

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There is also bipartisan momentum growing for some form of mandated paid sick and family leave in Congress. In fact, paid sick and family leave is listed as a White House priority in the latest proposed budget. Of the current proposals, most don’t require paid leave at the employer’s expense. Some bills call for a small tax on employee pay to fund an unemployment compensation type benefit. Another approach for paid family leave is to have workers draw against their social security retirement entitlement. This would mean retiring later.

New paid time off laws: To date, 32 state and local jurisdictions have passed laws mandating some form of paid time off for illness. In 11 states and the District of Columbia, paid sick leave is mandated statewide. Another 20 cities, municipalities and towns across the country also require some form of paid sick leave. The leave is for absences related to the employee’s personal illness. The states are:

  • Arizona
  • California
  • Connecticut
  • Maryland
  • Massachusetts
  • Michigan
  • New Jersey
  • Oregon
  • Rhode Island
  • Vermont
  • Washington State

Six states and the District of Columbia also mandate paid family leave when a dependent rather than the employee is ill or for other family-related reasons. The states are California, Massachusetts, New Jersey, New York, Rhode Island and Washington State. One city – San Francisco – also requires paid family leave. If the state and cities your business operate in are not on the list, they may be soon. According to a recent news report, 18 additional state legislatures are considering paid family leave bills in 2019.

Sick leave or FMLA leave? Employers need to differentiate between mandated paid sick leave and leave under the FMLA. Just being sick is not the same as having a “serious health condition.” An employee or family member must have a “serious health condition” to qualify for FMLA leave. An employee with a cold could take paid sick time under many state laws. Those hours would reduce the employee’s available paid sick time. Unless the condition also qualified as a “serious health condition” the hours would not count against the employee’s FMLA entitlement.

Paid leave of absence. No law mandates a paid leave of absence, but some employers offer the benefit in certain circumstances. Employers generally offer paid leaves of absence to highly skilled employees that the company wishes to retain. Although costly, the benefit is justified when the cost of replacing the employee is higher than providing the benefit. Paid time off policies should address paid leaves of absences and note the specific positions eligible. The policy should allow the employer flexibility and explain that each request is evaluated individually.

Integrating your paid time off policy with state and local leave laws: While FMLA and most other federally guaranteed time off is unpaid, many of the new leave laws require payment. Fortunately, your existing paid time off policies can be integrated with the new laws. Your human resource department should:

  • Prepare a complete list of all paid and unpaid leave laws that apply in each work location. Don’t forget to include information on employee eligibility based on hours worked and length of service.
  • Check each law to see whether it requires you to create a new, separate pot of leave entitlement.
  • Verify whether you are allowed to substitute paid leave you already provide such as sick, vacation or personal leave. Most state and local leave laws do.
  • Create a checklist allowing easy designation of time off under each applicable entitlement. In some cases, this may mean designating time off under multiple categories.

Some employers may want to consider developing one comprehensive paid and unpaid leave policy covering all employees across work locations. This may cost more as you expand coverage to some employees who otherwise would not be entitled to paid leave. However, it would simplify compliance and cut down on morale problems. Employees talk to each other. They will quickly share that some employees are receiving paid leave while others are not. Extending benefits eliminates that problem.

Many types of paid and unpaid leave: State and local laws guarantee paid or unpaid leave for employees for a wide variety of reasons. Those reasons may or may not be the same reasons permitted for leave under the federal FMLA. As a result, employers should track leave under each law separately.

Some types of leave are only found in state leave laws. Some examples include:

  • Eights states and the District of Columbia mandate employee time off to attend and participate in school activities with their child. This is unpaid leave though employers can allow workers to use employer provided paid leave.
  • Thirteen states offer safe leave for employees fleeing domestic violence. Several cities, including New York City, mandate safe leave as well. Safe leave often includes time off for counseling, moving to safe housing or attending court hearings. Ten jurisdictions require paid safe leave and the three others allow the employer to decide whether the employer may use accrued paid sick or other leave.
  • The vast majority of states (37) allow at least some workers to take leave for organ donation. For all federal workers and state workers in 27 states, organ donor leave is paid up to each state’s limit. Six states require private employers to provide paid organ donation leave. Several other states do not require paid organ donor leave but offer the employer tax credits for doing so. Most organ donations would constitute a serious health condition under the FMLA since surgery is involved. Employers therefore must track the time as FMLA leave too.
  • Some states also mandate first responder leave for employees who are also volunteer firefighters or emergency medical services (EMS) personnel. It is generally job-protected unpaid leave though some laws allow the employee to take accrued paid leave.
  • At least one city (Emeryville, California) mandates that an employee may take paid sick leave to care for a service dog.