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Maryland Healthy Working Families Act (MHWFA)

Tina Bull • Feb 21st, 2018

Maryland Healthy Working Families Act (MHWFA)

On January 12, 2018, the Maryland legislature enacted the Maryland Healthy Working Families Act (MHWFA) by overriding Governor Hogan’s veto from the prior legislative session. The MHWFA requires all Maryland employers to provide sick and safe leave to eligible employees.  Legislative attempts to delay the effective date of the Act have been unsuccessful, so it is in force as of February 11, 2018.

Covered Employers and Employees

Employers with an average of 15 or more employees whose primary work location is in the State of Maryland are required to provide paid earned sick and safe leave.  Those with 14 or fewer employees working in Maryland are required to provide unpaid sick and safe leave.  This leave must be provided regardless of where the employer is located.

EB Affordable Care Act

The employer must calculate the average monthly number of employees during the immediately preceding year to determine whether 15 or more individuals were employed in Maryland.  All employees, including full time, part time, temporary and seasonal are included in the calculation.  Preliminary guidance from the Department of Labor, Licensing and Regulation (DLLR) indicates that officers of closely held corporations should be counted as employees if treated as employees for other legal purposes such as taxes, unemployment insurance and workers compensation.

In general, any employee that normally or customarily works 12 or more hours per week is entitled to accrue sick and safe leave.  However, the following are exempt from the requirements of the Act:

  • Certain independent contractors;
  • Certain associate real estate brokers/salespersons;
  • Employees under age 18 at the beginning of the year;
  • Certain agricultural operations employees;
  • Certain construction workers covered by a collective bargaining agreement;
  • Certain employees working on an as-needed basis in a health or human service industry; and
  • Certain employees of a temporary services agency.

Accrual of Sick and Safe Leave

Leave accrues at a rate of one hour for every 30 hours that an employee works (including hours worked outside of Maryland).  Accruals must begin as of February 11, 2018, the effective date of the MHWFA.  The maximum annual accrual of sick and safe leave is 40 hours.  An employee is entitled to carry over up to 40 hours of unused accrued sick and safe leave, but is not entitled to have an accrual of more than 64 hours at any time.  Employers that provide the full amount of sick and safe leave at the beginning of the year do not have to allow the carryover of unused leave.  In either case, the employer designates when the year begins and ends.

New employees begin accruing leave on date of hire, but an employer is not required to allow an employee to use accrued leave during the first 106 calendar days of employment.

An employee is not entitled to accrue leave during:

  • A two-week pay period in which the employee worked fewer than 24 hours;
  • A one-week pay period if the employee worked fewer than a combined total of 24 hours in the current and immediately preceding pay period; or
  • A semi-monthly pay period in which the employee worked fewer than 26 hours.

DLLR recommends that an employer develop a policy addressing the issue of whether an employee is entitled to accrue sick and safe leave during a period of paid leave, such as paid holiday hours.

Unused accrued sick and safe leave may be forfeited upon termination of employment; however, the MHWFA requires that any earned but unused leave be reinstated if the individual is rehired within 37 weeks of separation.

Permitted Uses of Sick and Safe Leave

Earned sick and safe leave may be used for the following:

  • To care for or treat an employee’s mental or physical illness, injury or condition;
  • To obtain preventive medical care for the employee or the employee’s family member;
  • To care for a family member with a mental or physical illness, injury or condition;
  • For maternity or paternity leave;
  • For absence due to domestic violence, sexual assault or stalking committed against the employee or a family member under certain circumstances.

The minimum increment for use of leave cannot exceed four hours.  Family members include a spouse, child, grandchild, parent, sibling, or grandparent of the employee whose relationship is based on biology, marriage, adoption, legal custody or standing in loco parentis.

An employee is required to provide reasonable advance notice (generally not more than 7 days) when the leave is foreseeable. Otherwise, notice must be provided as soon as practicable.  An employer may require verification for use of leave if the employee uses sick and safe leave for more than two consecutive shifts or uses leave during the period between the first 107 and 120 calendar days of employment when verification is agreed to at the time of hire.

Existing Leave Policies

If an employer does not track absences and does not reduce  pay for any reason which could qualify for sick or safe leave, or has an existing program providing leave that is at least equivalent to what must be provided under the MHWFA, there is no need to provide additional leave.  DLLR recommends that employers with such an existing program have a written policy that clearly states employees are permitted to take leave or use paid time off for any of the reasons and under the same conditions as set forth in the MHWFA.  DLLR also suggests that, in this case, employers advise employees that no additional leave will be provided pursuant to the Act.

Other Provisions

An employer is required to provide each employee a written statement of used and available paid and unpaid sick and safe leave with each pay period.  This requirement can be met with an online system which employees can access.

Employers must maintain records for three years to demonstrate hours worked, sick and safe leave accrued, and leave used for each employee.

The MHWFA preempts any local jurisdiction from enacting a sick and safe leave law after January 1, 2017.  The Montgomery County Earned Sick and Safe Leave law is not preempted.

Special provisions apply to commission-only employees and tipped restaurant employees.

DLLR has released a draft sample employee notice poster for display at the employer’s place of business.  It is available on the DLLR website.

About the Author: Tina Bull, VP of Compliance Services for the Employee Benefits practice, is responsible for managing and overseeing all activities of the Compliance Services Department. She advises and assists clients with respect to health/welfare plan design, administration and communication, with focus on current benefit laws and regulations. Tina’s areas of expertise include: Internal Revenue Code and ERISA requirements for health and welfare benefit plans; Internal Revenue Code Section 125 cafeteria plan implementation and administration; COBRA administrative requirements; HIPAA administrative simplification, privacy and security compliance and benefit taxation issues. In addition to conducting internal training for employee benefits staff, she has spoken at numerous seminars on regulatory compliance issues.