As all employers and employees should know, both Vermont and federal law – in the form of the Parental and Family Leave Act, and the Family and Medical Leave Act – already require employers of a certain size to provide leave to employees who need to be absent for medical reasons or to care for family members. Efforts have been underway for years, though, to fill in some of the gaps left by these laws by mandating paid leave for employees.
This week, the Vermont legislature passed H.187, a bill first approved in the House in April 2015 that would mandate paid sick leave for Vermont employees. Again, the bill should not be completely unfamiliar to Vermont employers, as various advocacy groups have been campaigning for similar legislation for years. The stars aligned for passage this time around, though, as the Governor and other key legislative members – as well as a surprising number of small businesses and business coalitions – supported the bill.
Once the bill is signed by the Governor, Vermont will join a growing list of states and localities that have adopted paid sick leave laws since the City of San Francisco enacted the nation’s first paid leave ordinance in 2006. Presently, four states (Connecticut, California, Massachusetts and Oregon), 21 cities and one county have paid leave laws on the books and campaigns are underway to pass similar legislation in other jurisdictions.
The new law is set to take effect for most employers (those with more than five employees) on January 1, 2017 and for small employers (five or less employees) on January 1, 2018. Here are the nuts and bolts of the new law:
Does the law apply to all employers?
Almost. Or most, at least. “Employer” is defined very broadly, though certain “employees” are not entitled to the paid leave benefits created by the law. Examples expected to be of most interest include temporary and seasonal workers (those who work 20 weeks or fewer per year), certain per diem employees at hospitals, substitute teachers, “guest workers” exempt from federal visa requirements, and minors under the age of 18. Part-time employees who work fewer than 18 hours per week on average are also exempt.
What about small employers?
Importantly, unlike the Parental and Family Leave Act and the Family and Medical Leave Act, which both exempt employers with fewer than a set number of employees (10-15, depending on the type of leave for the PFLA, and 50 for the FMLA), the requirements in the new law apply to all sizes of employers, including “mom and pop” businesses that might have only a few employees, though the law contains several important provisions designed to ease its impact on small employers. For instance, as mentioned above, the law does not go into effect until 2018 for small employers, and includes a one-year exemption for “new employers,” defined as those employers for whom less than a year has passed since hiring their first employee. The law also directs the Department of Labor and the Agency of Commerce and Community Development to study the costs of the law’s requirements to employers with five or fewer employees and to develop a program to help smaller employers implement the law’s requirements.
How much leave do employees get?
Employees must accrue “not less than” one hour of paid sick leave for every 52 hours worked. The cap is set at 24 hours of total leave for the first year the law is in effect (i.e. from January 1, 2017 until December 31, 2018). After that first year, the cap is raised to 40 hours of total leave. Unused hours carry over from year to year, up to the cap, or the employer can pay employees for any unused sick leave at the end of the year.
Employers are not required to provide new employees with leave immediately, though. The law provides that employers may require a waiting period of up to one year before an employee may begin using paid leave (though leave must accrue during the waiting period).
Finally, employers are given the option of calculating accrued leave every pay period, or on a quarterly basis (provided employees can use sick time as they accrue it during the accrual period).
What does the paid leave cover?
Employees may use accrued sick time to:
- Cover their own injury or illness;
- Obtain health care for themselves;
- Care for a sick or injured family member or co-resident;
- Arrange for social or legal services or obtain medical care or counseling for a family member or co-resident who is a victim of domestic violence, sexual assault or stalking; or
- Care for a family member or person residing with the employee because that person’s school or business is closed for public health or safety reasons.
At what rate does sick leave need to be paid?
The law requires employers to pay accrued leave at the employee’s normal hourly rate or the minimum wage, whichever is greater.
As for benefits, the law requires that “Group insurance benefits” continue during the employee’s use of leave “at the same level and conditions that coverage would be provided as for normal work hours,” though employers may require employees to contribute to the cost of those benefits “at the existing rate of employee contribution.”
What if we already have a paid leave policy?
So long as the paid time off policy covers the minimum requirements of the law (as described here, for the most part), employers with such policies will be considered “in compliance” with the law.
Any posting requirements?
Of course! Get ready to add another poster to your break room bulletin boards. The Department of Labor will be tasked with producing a form.
What are the consequences of failing to comply?
In addition to any sick pay unlawfully withheld, an employer who violates the new law could be held liable for a $5,000 penalty per violation. Moreover, the law incorporates anti-retaliation provisions that make it unlawful to take adverse action against an employee for exercising his or her rights under the law.
Anything else I should know?
Interestingly, the new law will prohibit employers from engaging in what may be common practice in some businesses: requiring employees to find a replacement when going out on leave. Under the new law, employers may offer employees the opportunity to swap shifts in lieu of using paid sick time, but may not require them to do so.
The law also allows employers to require that employees “make reasonable efforts to avoid scheduling routine or preventative health care during regular work hours,” and to notify the employer “as soon as practicable” of the intent to take earned sick time.
Finally, it is worth noting that any willful failure to pay appropriate wages in Vermont, including the paid sick leave due under this new law, can result in personal liability to any corporate officer who has “control of the payment operations of the corporation.”
Disclaimer: This article is provided for general informational purposes only and is not intended to constitute legal advice or to substitute for the advice of an appropriately licensed attorney. If the reader requires legal advice, s/he should contact a competent attorney licensed to practice in the reader’s jurisdiction. This article is general in nature and may not apply to particular factual or legal circumstances. The information presented is not an invitation to, and does not form, explicitly or implicitly, an attorney-client relationship.
