Now that Maryland has passed the Healthy Working Families Act (Act), Montgomery County employers may need to adjust their policies and practices to comply with both laws.

The following is a checklist of steps employers should take to update their leave policies and practices to comply with the Act.

1. Determine if the Employer’s Employees are Covered by the Law

The Act does not apply to independent contractors, as defined in Section 8-205 of the Labor and Employment Article of the Maryland Code, or employees who are:

• Under the age of 18 before the beginning of the year;
• Work fewer than 12 hours a week;
• (i) Licensed real estate salespersons or licensed associate real estate brokers, (ii) affiliated with licensed real estate brokers under a written agreement, (iii) compensated solely on a commission basis; and (iv) qualify as independent contractors for federal tax purposes;
• Employed in the agricultural sector on an agricultural operation;
• Employed by a temporary services agency to provide temporary staffing services if the temporary service agency does not have day-to-day control over the work assignments and supervision of the individual while the individual is providing the temporary staffing services;
• Directly employed by an employment agency to provide part-time or temporary services to another person;
• Employed in the construction industry if they are covered by a collective bargaining agreement (CBA) which expressly waives the Act’s requirements and are not employed as a janitor, building cleaner, building security officer, concierge, door person, handyperson or building superintendent; or
• (i) Called to work by the employer on an as-needed basis in a health or human services industry, (ii) able to reject or accept the shift offered, (iii) not guaranteed to be called on to work by the employer, and (iv) not employed by a temporary staffing agency.

Montgomery County employers should note that the Montgomery County Sick and Safe Leave law does not include many of these exceptions. The Montgomery County law covers all employees who are regularly working more than eight hours each week as compared to the state law which covers employees working twelve or more hours each week, though like the state law, the Montgomery County law also exempts independent contractors and workers who:

1. Do not have a regular work schedule with the employer;
2. Contact the employer for work assignments and are scheduled within 48 hours after contact;
3. Have no obligation to work for the employer unless they initiate contact; or
4. Are not employed by a temporary placement agency.

2. Provide Sick Leave to Part-Time and Temporary Employees

The Act applies without regard to whether an employee is full-time, part-time, temporary, or seasonal.

3. Allow for Accrual of Sick Leave During Initial Probationary Period

The Maryland Act requires that new employees be entitled to accrue earned sick and safe leave, however, employers are permitted to prohibit new employees from using earned sick and safe leave during their initial probationary period of up to 106 days.

Montgomery County employers should note that under the Montgomery County Sick and Safe Leave law, the probationary period during which an employer may prohibit use of earned sick and safe leave is only the first 90 days of employment.

4. Adjust Existing Accrual Rates and Cap Accrual

Employees who receive leave on an accrual basis rather than as a lump sum at the beginning of the year must accrue one hour of leave for every 30 hours worked up to 40 hours of leave in a year. The Maryland law provides that for purposes of sick and safe leave accrual, employees exempt from the overtime wage requirements of the federal Fair Labor Standards Act are considered to work 40 hours each week, unless the employee’s workweek is fewer than 40 hours, in which case the number of hours in the employee’s actual workweek should be used to calculate sick and safe leave accrual.

Under the Act, employers may cap the amount of sick or safe leave that an employee accrues and the amount of sick or safe leave the employee uses in a year up to 64 hours.

The Maryland law provides that an employer may stop accrual of sick and safe leave:

1. When an employee works less than 24 hours in a 2-week pay period;
2. Where the pay period is one week and the employee works fewer than 24 hours in the current and immediately preceding pay period combined; or
3. For a pay period in which the employee is paid twice a month regardless of the number of weeks in a pay period and the employee worked fewer than 26 hours in the pay period.

It is important to note that the Maryland law makes clear that employers with existing paid leave policies (e.g. annual leave, PTO, vacation, and sick leave) are not required to modify their existing policy if the policy permits an employee to accrue and use leave under terms and conditions that are at least equivalent to the earned sick and safe leave required by the law.

In contrast, Montgomery County employers must provide more sick and safe leave. Montgomery County employers with five or more employees, must provide a minimum of 56 hours of paid leave each year and employers of fewer than five employees must provide a minimum of 32 hours of paid sick and safe leave and 24 hours of unpaid earned sick and safe leave in a calendar year. Like the Maryland law, this leave may be provided in a lump sum at the beginning of the year or on an accrual basis of one hour of leave for every 30 hours worked.

The Montgomery County law does not cap accrual but it does cap the amount of leave that can be used at 80 hours per year. The Montgomery County law does not contain the exemptions to accrual for times when an employee works less hours in a workweek like the Maryland law.

5. Adjust the Smallest Increment of Time for which Employees May Use Sick and Safe Leave

Under the Act, employers must permit employees to use leave in four hour increments or  the increment that the employer uses for payroll purposes either to account for employee absences or the use of employees’ work time, whichever is smaller.

6. Allow Employees Who Accrue Leave to Carry it Over

Employers must allow their employees to carry over up to 40 hours of unused sick leave from one year into the next year. Employers providing all 40 hours of leave in a lump sum at the beginning of the year are not required to permit leave carryover.

In addition, as previously stated employers may cap sick and safe leave accrual under the Act at 64 hours such that if an employee carries over 40 hours of leave, he or she will continue to accrue sick and safe leave until he or she reaches the 64 hour cap, at which time the employee will not accrue any additional sick and safe leave until he or she uses some of this leave.

Montgomery County employers providing leave on an accrual basis must permit employees to carry over more leave — up to 56 hours of unused sick and safe leave to the following year. The Montgomery County law, however, does not have an accrual cap.

7. Inform Employees of the Permitted Uses of Paid Leave

Employees must be permitted to use Maryland sick and safe leave for any of the following purposes:

1. Care for or treat the employee’s mental or physical illness, injury, or condition;
2. Obtain preventive medical care for the employee or employee’s family member;
3. Care for a family member with a mental or physical illness, injury, or condition;
4. Maternity or paternity leave; and
5. If the absence from work is necessary due to domestic violence, sexual assault, or stalking committed against the employee or the employee’s family member and the leave is being used by the employee to obtain relief or services for the employee or the employee’s family member. This would include medical or mental health attention that is related to the domestic violence, sexual assault, or stalking; services from a victim services organization related to the domestic violence, sexual assault or stalking; or legal services or proceedings related to or resulting from the domestic violence, sexual assault, or stalking. Leave may also be used during the time that the employee has temporarily relocated due to the domestic violence, sexual assault, or stalking.

In addition to the purposes listed above, the Montgomery County law provides greater protection by also providing leave when there is a closing of the employer’s place of business or an employee’s covered family member’s school or child care center due to a public health emergency.

The Montgomery County law also provides that sick and safe leave may be used for the birth of a child, or the placement of a child with the employee for adoption or foster care, and to care for a newborn, newly adopted, or newly placed child within one year of birth, adoption, or placement. The Maryland Act, however, does not define “maternity or paternity leave.”

8. Revise the Definition of Family Member

The Act defines a “family member” to include a:

• Child: biological child, adopted child, foster child, stepchild, child for whom the employee has legal or physical custody or guardianship, or child for whom the employee stands in loco parentis regardless of the child’s age;
• Parent: biological, adoptive, foster, stepparent, of the employee or of the employee’s spouse, legal guardian of the employee, or personwho acted as a parent or stood in loco parentis when the employee was a minor;
• Spouse;
• Spouse’s parent: biological, adoptive, foster, stepparent, or person who acted as a parent or stood in loco parentis when the employee’s spouse was a minor
• Grandparent: biological, adopted, foster, or step-grandparent of the employee;
• Grandchild: biological, adopted, foster, or step-grandchild of the employee; and
• Sibling: biological, adopted, foster, or stepsibling of the employee.

The definition of “family member” is similar to that of the Montgomery County sick and safe law. However, there are a few differences. The Montgomery County law does not include adopted, foster, and step grandparents and grandchildren of the employee as a covered family member. The Montgomery County law does include, however, a grandparent’s spouse and a sibling’s spouse, while the Maryland Act does not. Another difference is that the Maryland Act covers a child for whom the employee stands in loco parentis. The Montgomery County law does not; but, it does cover a child for whom the employee is the primary caregiver. Similarly, the Maryland act also covers a person who acted as a parent or stood in loco parentis when the employee or employee’s spouse was a minor; the Montgomery County Act does not have the in loco parentis language, but does cover a person who served as the primary caregiver of the employee.”

9. Update Requirements for an Employee’s Advance Notice of Need for Leave

Under the Act, if an employee’s need to use paid sick and safe leave is foreseeable, the employer may require the employee to provide reasonable advance notice of no more than seven days prior to the date on which the leave would begin. If the need to use sick and safe leave is not foreseeable then the employee must provide notice as soon as practicable.

Under the Montgomery County law, the employee is only required to request leave from the employer as soon as practicable after the employee determines that the employee needs to take leave.

10. Update Requirements on Required Documentation for Leave

An employer may not require documentation to support sick and safe leave under the Act unless the leave is for three or more consecutive days, or if the employee used leave during the time period between the first 107 and 120 calendar days the employee was employed and the employee agreed to provide any documentation when the employee was hired.

Under the Montgomery County sick and safe leave law, the only time an employer may request documentation is when the employee uses sick and safe leave for more than three consecutive days.

11. Provide Required Notice and Paycheck Documentation of Leave Balance

The Maryland Act requires the employer to notify its employees that the employees are entitled to earned sick and safe leave under the Act and the amount of leave they have available to use. At the time wages are paid, the employer must provide each employee with notice of the amount of earned sick and safe leave available for that employee’s use. The law specifically states that this may be done through an online system.

In addition, Maryland employers must notify employees of:

1. How earned sick and safe leave is accrued;
2. The purposes for which an employee may use earned sick and safe leave under the Act;
3. A statement that the employer will not retaliate against an employee by taking an adverse action against an employee who exercises his or her right to use sick and safe leave, or who makes a complaint, brings an action, or testifies in an action regarding a violation of the Act; and
4. A statement that the employee has the right to report an alleged violation of the Act by the employer to the Commissioner of Labor and Industry or to bring a civil action against the employer as permitted by the Act.

Under the Act, the Commissioner of Labor and Industry is required to prepare a poster and a model notice for employers to use to comply with this notice requirement. In addition, the Commissioner is required to develop a model sick and safe leave policy for employers to use in their handbooks. This notice and policy are to be posted in a downloadable format on the Department’s website. We will update you when these documents become available.

Montgomery County has similar notice requirements. Accordingly, Montgomery County employers should provide both posters and handbook notifications that encompass the requirements of both laws.

12. Adjust Practices for Record Keeping of Employee Sick and Safe Leave Accrual and Use

Employers are required to keep, for at least 3 years, a record of:

1. Earned sick and safe leave accrued by each employee; and
2. Earned sick and safe leave used by each employee.

The Commissioner of Labor and Industry is required to inspect these records for compliance.

13. Adjust Leave Cash Out Requirements

The Act specifically states that employers are not required to “pay out” accrued and unused sick and safe leave at the time the employee separates employment. However, employers should keep in mind that Maryland law requires accrued unused leave to be paid out unless the employer has a written policy that limits the compensation of accrued leave to employees and the employer notified the employee of this policy at the time of hire.

A Final Note

Maryland Sick and Safe Leave Law’s impact on acquisitions of Maryland Companies: companies acquiring Maryland companies should note that the law requires an employer who acquires, by sale or otherwise, a Maryland employer shall allow all employees of the original Maryland employer who remain employed by the successor employer to retain all unused earned sick and safe leave accrued during employment with the original Maryland employer.

Julie Reddig is an employment attorney who represents management in workplace employment matters. For more information on the Maryland Healthy Working Families Act, contact Julie at [email protected].