State Law Round-Up: Paid Leave Proliferation (CT, ME, MA, NV, DC) and Minimum Wage Update! (US)
July 1 Minimum Wage Increases
A number of jurisdictions will see a minimum wage increase effective July 1, 2019; please find our updated minimum wage chart here. In addition to those listed, Nevada just (on June 12, 2019) passed a law to raise the minimum wage to $12/hour by 2024.
Maine Earned Paid Leave
On May 28, 2019, Maine became the first state to pass a universal paid leave law (meaning the leave can be used for any reason, not just illness or family-related reasons). The law applies to employers with 11 or more employees. Under the law, employees earn one hour of paid leave for every 40 hours worked, and can earn up to 40 hours of paid leave per year. While accrual begins upon hire, employers may prohibit use of accrued paid leave until after the employee has been employed for at least 120 days. Except where an emergency, illness or other sudden necessity for taking the leave prevents it, employees must give reasonable notice of their intent to use paid leave, and such leave must be scheduled to prevent undue hardship on the employer, as reasonably determined by the employer. The Maine Department of Labor is charged with developing rules to implement and enforce the paid leave law, which is scheduled to go into effect on January 1, 2021.
Nevada Paid Leave
Not to be outdone, on June 12, 2019, Nevada passed a universal paid leave law (again, meaning the leave can be used for any reason). The law applies to employers with 50 or more employees in Nevada. Under the law, employees earn 0.01923 hours of paid leave for every hour worked, up to a maximum of 40 hours each year. Up to 40 hours of unused leave may be carried over to the next year, however, employers may limit employee use of leave to 40 hours per year. Employees may use leave in increments not to exceed 4 hours. Accrued leave may be used beginning on the 90thcalendar day after hire. Employees must provide notice of intent to use the leave as soon as practicable. Employers must also provide to employees on each payday an accounting of hours of paid leave available for use by the employee. Employers are not required to pay out unused leave upon termination of employment. As with various sick leave laws, the law contains recordkeeping requirements for employers and prohibits retaliation against employees who request or use leave. Note that while the law states that it does not apply to temporary, seasonal or on-call employees, it does not define these categories. Presumably, the state will provide interpretive guidance or rules prior to the law taking effect on January 1, 2020.
Washington, D.C. Paid Family Leave
Employers with workers in Washington, D.C. should note that beginning July 1, 2019, the District will begin collecting payroll taxes to fund the Universal Paid Leave Amendment Act of 2016 (the “Act”). Pursuant to the Act, beginning on July 1, 2020, covered employees will be eligible for paid family leave (“PFL”) of up to 8 weeks per year to bond with a new child, up to 6 weeks per year to care for a family member with a serious health condition, and up to 2 weeks per year to care for the employee’s own serious health condition. An employee is a covered employee if (a) they spend more than 50% of their work time for an employer working in D.C. or (b) their employment is based in D.C. and they spend a substantial amount of time in D.C. and no more than 50% of their time working in another jurisdiction. Benefit determinations and payments are issued to eligible individuals directly from the Department of Employment Services (“DOES”). Employers are prohibited from retaliating against employees for request or use of PFL, including by transferring them to a lesser position or reducing pay or hours.
PFL benefits are funded by a quarterly employer payroll tax of 0.62% of their covered employee’s total wages. Employers are required to submit the same wage information for their employees that they currently submit for unemployment insurance purposes, using the same reporting schedule and online portal as they currently do for UI. Employers should update their Employer Self-Service Portal accounts before that date. If an employer pays UI tax on an employee for a quarter, then the employee will automatically be presumed to be a covered employee for paid family leave, although the presumption can be rebutted by submitting documentation that the employee does not meet the criteria to be a covered employee for that quarter.
Beginning January 1, 2020, employers will be required to provide the PFL notice to employees. Employers are required to post the notice in any worksite in the District, provide a copy to employees upon hire and annually thereafter, and provide a copy to employees anytime the employee requests PFL or the employer learns of information that the employee might be eligible for PFL. In addition to maintaining payroll records for three years (as already required for UI purposes) employers must maintain records related to employee leave requests and information related to the employers existing leave programs for three years. Employers covered by the FMLA should already be keeping these records.
Massachusetts Paid Family and Medical Leave
While the Massachusetts Paid Family and Medical Leave law (“PFML”) is not fully effective until 2021 (that is when employees may take leave), employers should be aware of several current action items related to the law, including a recent decision to delay employer deductions and submission of contributions used to fund the program by three months to allow employers more time to prepare for implementation of the PFML.
Employers must display this poster and must distribute this notice to all employees and independent contractors by June 30, 2019. Notices should also be given to new employees/contractors within 30 days of the first day of employment/new contract period. Employers can use the template notices or develop their own so long as they comply with certain requirements. Notices may be distributed electronically but the recipient must be allowed to acknowledge receipt or decline acknowledgment of receipt. Employers should collect/store signed acknowledgments of receipt of the notice (and declinations) from all Massachusetts employees and 1099 contractors.
Additionally, while employers were supposed to begin wage deductions and submit taxes on July 1, 2019, that date has been delayed by three months. Employers now have until October 1, 2019 to begin making deductions from wages or payments for services; such deductions will fund quarterly contributions to the Department of Family and Medical Leave (DFML), which are to be submitted through the Department of Revenue’s MassTaxConnect system beginning in October 2019. To make up for the delay, the amount of the tax has been increased from 0.63% of wages to 0.75% of wages. Employers should continue preparations for making deductions and contributions and should prepare for quarterly reporting of gross wages or other payments to all Massachusetts W2 employees and Massachusetts 1099-MISC contract workers.
Further details and information are available from the state website.
Connecticut Paid Family and Medical Leave
Last, but not least, Connecticut is poised to have the nation’s most generous paid family and medical leave law; the bill, which has passed the legislature, is expected to be signed into law by Governor Lamont. Under the law, beginning in January 2022, employees will be entitled to up to twelve weeks of paid family and/or medical leave in any twelve-month period, as well as two additional weeks of paid leave for a serious health condition resulting in incapacitation that occurs during a pregnancy. The leave program will be funded through a payroll tax of 0.5%; payroll deductions are set to begin on January 1, 2021.