You have probably heard that effective July 1, 2015, Massachusetts enacted a new sick time law. There has been much discussion about its impact on companies located in Massachusetts. However, one aspect that has been overlooked is its impact on out-of-state businesses which have employees in Massachusetts. Any company with employees performing work in Massachusetts must consider this issue or face the consequences of non-compliance with the law.
The new law applies to businesses with employees whose “primary place of work” is Massachusetts. The final regulations of the Earned Sick Time Law, M.G.L. c. 149, § 148C, specify that an employee does not have to spend 50% of his/her work time in Massachusetts for it to be considered his/her primary place of work. Click here to read the final rule.
The regulations give the following example: A painter with a single employer works 40% of her hours in Massachusetts, 30% in New Hampshire and 30% in other states. Massachusetts is her primary place of work. In this example, all the hours the painter worked would be applied toward accrual of earned sick time, regardless of the location of the work or of the employer.
The first step in determining whether a company not located in Massachusetts is covered by the law is to review its total number of employees. Unpaid sick leave must be provided to employers with 11 or fewer employees, and paid sick leave must be provided to employers with more than 11 employees. The regulations state that in determining the number of employees for purposes of the sick leave law, “All of an employer’s employees, including full-time, part-time, seasonal, and temporary employees, whether working in or outside Massachusetts and regardless of their eligibility to accrue and use earned sick time, shall be counted for the purpose of determining employer size.”
Therefore, a New Hampshire (or any out-of-state) business that has employees who work primarily in Massachusetts must count all of its employees to determine whether it must offer paid or unpaid sick time to its Massachusetts employees.
For example, ACME manufacturing has its head office in New Hampshire where 20 people work, 5 employees in Connecticut and 2 salespeople in Massachusetts. The 2 salespeople in Massachusetts report to the New Hampshire head office, but primarily work in Massachusetts. What is ACME’s obligation under the Massachusetts sick leave law? Answer: ACME must count all employees to determine whether it must offer the 2 salespeople unpaid or paid leave. In this case, ACME has 27 employees and must offer paid sick leave to its 2 salespeople in Massachusetts and otherwise comply with that law as to those 2 employees.
My colleague Adam Hamel has written several blog posts (link #1, link #2) about compliance with the new law. However, businesses with questions about the new law are strongly encouraged to consult with legal counsel to determine what, if any changes, must be made to their existing sick leave or paid time off (PTO) policies and whether the safe harbor applies.