Photo: makelessnoise via Flickr (CC by 2.0)

Yesterday, President Trump unveiled his new budget plan.  Along with controversial plans to fund construction of a wall on the southern border and to cut funding for Medicare and Medicaid, the budget also includes a proposal for paid parental leave.

President Trump’s daughter Ivanka has been advocating for federal paid parental leave since the beginning of the administration in 2017.  And the president touted the idea during his State of the Union address in February.

President Trump’s plan would provide six weeks of paid leave to new mothers and fathers, including adoptive parents, to recover from childbirth and to bond with a new child.  The plan would be administered at the state level, and is anticipated to be offered through programs based on unemployment insurance.

Continue Reading President Trump’s Budget Includes a Proposal for Paid Parental Leave

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New York City Mayor Bill de Blasio is proposing a measure, which, if passed, would make the Big Apple the first place in the nation to require private-sector employers to provide paid vacation to employees.  The details of the plan have not yet been released, but the New York Times is reporting that the law would require private employers with five or more employees to provide at least two weeks of paid vacation.  City Hall officials have estimated that approximately half a million NYC workers would benefit from the new law.

Continue Reading NYC Mayor Proposes Mandatory Paid Vacation for Private-Sector Workers

On July 5, 2017 Washington became the latest state to enact some form of paid family and medical leave. The new law goes into effect in January 2020 and will provide employees with up to twelve (12) weeks per year of paid family leave for the following purposes:

• The employee’s own serious health condition;
• Care of a family member with a serious health condition;
• Care of a child new to the family following birth, adoption or placement in foster care; or
• For qualifying exigencies due to a family member’s deployment to active duty in the US Armed Forces. Continue Reading Washington State is Latest to Enact Paid Family Leave Legislation

When the ball drops on New Year’s Eve two important changes to Massachusetts wage and hour law will take place.

The first change is that the Massachusetts minimum wage will increase to $10.00 per hour effective January 1, 2016.  For tipped employees, the minimum wage is increasing to $3.35 per hour.  (The service rate is applicable for service employees who receive tips of more than $20 per month, and the average hourly tips when added to the service rate equals at least the minimum wage.)  The New Year’s increase to $10.00 is the second increase in a three-year legislative program that started with 2015’s increase in the minimum wage to $9.00 per hour.  The minimum wage will increase again on January 1, 2017 to $11.00 per hour ($3.75 for the service rate).  Currently, there are no further changes planned beyond 2017.

The second change is that the so-called “safe harbor” to the Massachusetts Earned Sick Time Law will close on January 1, 2016.  When the earned sick time law went into effect on July 1, 2015, the Attorney General announced a safe harbor, under which employers whose existing paid time off policies met certain minimum requirements would be deemed to be in compliance with the law for the remainder of 2015.  When the safe harbor closes on New Year’s Day, all employers must ensure that their policies and practices are fully compliant with all of the terms of the statue and accompanying regulations.  For more information, see my earlier blog posts about the Earned Sick Time Law, here and here, and the Attorney General’s excellent web page about the Earned Sick Time Law.

Photo: Jasmine Kaloudis via Flickr (CC by ND 2.0)
Photo: Jasmine Kaloudis via Flickr (CC by ND 2.0)

Employer-sponsored wellness programs are a popular tool to incentivize healthy living and maintain an active, engaged workforce.  But such programs can present legal risks to employers and must be specifically tailored to avoid running afoul of certain employment laws.  One such law is the Genetic Information Nondiscrimination Act of 2008 (GINA), a federal law enforced by the U.S. Equal Employment Opportunity Commission.

Among other restrictions, GINA prohibits employers from requesting, purchasing, or requiring disclosure of “genetic information” about job applicants, current and former employees, and trainees.  Genetic information is defined broadly in the statute and implementing regulations, and includes information about an employee’s spouse’s current or past health status.

One exception to GINA’s prohibition on requesting genetic information is when an employee voluntarily accepts health or genetic services from their employer, such as services offered through a wellness program.  Employers may provide financial or in-kind incentives to employees for voluntarily participating in wellness programs.  However, the incentives must be limited in way that does not make participation involuntary.

There is currently a gap in the law that prevents employers from offering incentives to employees for their spouses’ participation in the wellness program.  This is because in applying to participate in a wellness program, employees are often required to complete health risk assessments (HRAs).  Asking an employee’s spouse to complete an HRA could violate the statute because a spouse’s health status information is considered “genetic information” about an employee.  Thus, while an employee could receive incentives for his or her own participation in a wellness program, that same employee could not receive incentives for their spouses’ participation, even though the spouse is part of the employer’s health plan.

On October 29, 2015, the EEOC announced a new proposed rule that would remedy this apparent contradiction in GINA.  Under the proposed rule, an employer will be allowed to request information about the current or past health status of an employee’s spouse who is covered by the employer’s group health plan and is completing an HRA for a wellness program on a voluntary basis.  The rule clarifies that an employer may offer incentives for a spouse’s participation in a wellness program, as long as the employer follows certain requirements in requesting the spouse’s health information.

These requirements include that the spouse provide prior, knowing, written, and voluntary authorization for the employer to collect genetic information.  The authorization form must describe the type of genetic information that will be obtained and the general purposes for which it will be used.

While the new rule provides some clarity to employers, it is important to note a key distinction in GINA’s definition of “genetic information.”  The limited permissible disclosure proposed by this rule applies only to current or past health status, but not other genetic information, such as results of genetic tests.  Employers should therefore be mindful that their HRAs and authorization forms cannot ask for information about the results of genetic tests.

Employers should also limit how they use the health information gleaned from HRAs and other forms associated with wellness programs.  GINA strictly prohibits any form of discrimination based on an employee’s genetic information or makeup, so employers must be sure to compartmentalize how they use the genetic information obtained as part of wellness programs, and not use this information to make job-related decisions.

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.

Late last week, Massachusetts Attorney General, Maura Healey, issued the long-awaited final regulations for the implementation of the Commonwealth’s Earned Sick Time Law.  The issuance of the final regulations follows a series of public hearings and information sessions, and comes just in advance of the law’s July 1 effective date.

In addition to providing general guidance for employers as to the application of the Sick Time Law, the final regulations include some important clarifications about accrual, breaks in service, and the conditions under which documentation can be required from employees.

The Sick Time Law provides that all employees—regardless of whether they are full-time, part-time, exempt, not-exempt, permanent or temporary—earn sick time at a rate of one hour for every thirty hours worked up to a maximum of forty hours.  In recognition of the administrative burden tracking this accrual may impose on some employers, the final regulations give employers the option of providing employees with a lump sum allocation of forty hours of sick time at the beginning of the year.  Employers choosing this option will not be required to keep track of employees’ accrual of sick time.

The final regulations also explain how sick time benefits are handled for employees with breaks in service, an issue that is of great importance to employers with temporary workers who may come on and off the employers’ payroll as business needs change.  Employees who have a break in service of up to four months will retain their rights to all unused sick time earned prior to the break in service.  Employees who have a break in service of more than four months, but less than a year, will retain their rights to unused sick time earned prior to the break, but only if their unused sick time bank exceeds ten hours.  Employees returning to work after a break in service of less than one year are not subject to the ninety-day vesting period, and may begin using earned sick time right away.  Employees with a break in service of more than twelve months do not retain any of their rights to unused sick time earned before the break in service.

The Sick Time Law provides that employers may only request documentation from an employee justifying the need for sick time when the employee has used sick time for twenty-four consecutively scheduled work hours.  In response to employers’ concerns about potential misuse of sick time, the final regulations also allow employers to request documentation under certain other circumstances: for an absence that exceeds three consecutive days; when an employee has four unforeseeable absences in a three-month period (for employees seventeen years old or younger, documentation can be requested after three unforeseeable absences in a three-month period); or for absences that occur within two weeks of a non-temporary employee’s final scheduled workday before termination.  The final regulations also make clear that earned sick time may not be used as an excuse for being late to work for a reason other than those for which sick time may be used.

All employers with workers in Massachusetts must bring their policies in compliance with the law by the July 1 effective date, unless they qualify for the “safe harbor” announced by Attorney General Healey earlier this spring, in which case, they will have until January 1, 2016 to modify their existing policies.

Last month, the United States Supreme Court ruled unanimously in Tibble v. Edison International that retirement plan fiduciaries have an ongoing duty to monitor plan investments.  The ruling came in a case involving challenges to plan investment decisions made more than six years before suit was filed. The lower courts had ruled some claims were barred by the statute of limitations.

In a 2007 lawsuit, participants in the Edison 401(k) Savings Plan sued various Edison International entities and the plan fiduciaries alleging numerous claims under ERISA.  The claims included that the plan fiduciaries should have offered identical lower-cost institutional shares instead of the more expensive investment options selected in 1999 and 2002.

The Supreme Court reversed the lower courts’ ruling that ERISA’s six-year limitations period barred plaintiff’s claims that the 1999 mutual fund investments were imprudent.  Although the Supreme Court stated that the lower court correctly asked whether the last action which constituted a part of the breach or violation of the duty of prudence occurred within the rele­vant 6-year period, the lower court was incorrect to focus on the act of designating an investment for plan inclusion to start the six ­year period. Instead, the lower courts should have recognized that a fiduciary is required to conduct a regular review of its investments with the nature and timing of the review contingent on the circumstances.  The case highlights the need for retirement plan fiduciaries to monitor plan investments pursuant to written procedures.

Photo: Courtney Carmody via Flickr (CC by 2.0).
Photo: Courtney Carmody via Flickr (CC by 2.0).

With the July 1 effective date for the new Massachusetts earned sick time law looming, the anxiety level of employers is on the rise.  Proposed regulations for implementing the law are yet to be finalized, and payroll providers are still working through how they will track earned time.  But, thanks to a temporary Safe Harbor announced by Attorney General Maura Healey today, some employers are breathing a sigh of relief … for the time being.

Under the new Safe Harbor, employers with a paid time off policy in place by May 1, 2015 that provides at least thirty hours of paid time off during the 2015 calendar year are deemed to be in compliance with the earned sick time law.  In order to remain in compliance, employers must observe the earned sick time law’s non-retaliation and non-interference provisions with respect to any paid time off taken by employers between July 1 and December 31.

The reprieve is only temporary, however.  Any employers operating under this Safe Harbor must adjust their paid time off policies to comply with the provisions of the earned sick time law.

Up until now, Attorney General Healey has denied business leaders’ requests to postpone the effective date of the earned sick time law.  As recently as May 5, Attorney General Healy reiterated her opposition to any delay in the implementation of the law.  As reported by the Boston Globe, the Attorney General’s reversal “is a reasonable step that gives all workers access to earned sick time by July 1 while giving businesses that have already been doing the right thing more time as they move into compliance with the new law.”

Photo: Boudewijn Berends via Flickr (CC by 2.0)
Photo: Boudewijn Berends via Flickr (CC by 2.0)

Has your company considered offering your employees unlimited Paid Time Off (“PTO”)?  Many businesses challenged with wanting to recruit and retain the best talent are experimenting with providing new and arguably better benefits to employees.  PTO combines an employee’s vacation time, sick days, and other leave into one discretionary plan.  Employers will typically not question the reason the employee is out of work as the employee has the flexibility to use the time granted for whatever purpose it is needed or wanted. Unlimited PTO takes it one step further. Employees can take as much time off as needed without repercussion as long as the work gets done. The motivation is clear: build employee loyalty and morale; recruit and retain great talent. The bottom line is sensible: treat the employees you hire like adults and hold them accountable for the outcomes they deliver rather than the time they spend in the office.

So, what issues should a company consider when implementing this benefit?

  • Some companies report having a hard time getting employees with unlimited PTO to actually go on vacation. People like to know what is expected of them so employers should offer some direction about what is acceptable.
  • Communication and coordination is critical to make sure that the company’s business needs are met.  For example, everyone can’t take time off at once, and appropriate notice should be expected for planned absences.
  • Some employers report that employees who are single and childless perceive inequity in use of the benefit.  Management needs to communicate that PTO should be used for whatever personal needs require people to be out of work: vacation, care of elderly parents, mental health days to recharge, personal doctors’ appointments, etc.
  • Companies need to be mindful of the interplay with state and federal laws which govern time off: state paid sick leave policies, FMLA, parental leave and FLSA.
  • The transition to unlimited PTO will require addressing what will happen to unused but accrued time off. Will it be paid out? Will employees need to use it within a period of time?
  • Management needs to determine whether the culture of a company will support such a benefit. Does the company currently do a good job of managing and evaluating employees based on outcomes? Are there clear goals set for workers? Will long term employees accept the fact that new employees will be on the same footing from day one?
  • It is critically important to have a clear written policy setting out the company’s expectations of both employees and those who supervise them so that people are treated fairly and act as part of a working team.
  • Performance issues and issues of abuse of this privilege should be addressed quickly and with transparency.  Company morale depends upon it.

Unlimited PTO does not mean  that there are no rules .  In exchange for this benefit, employees must take responsibility to meet the goals set for them.  If success in your business is measured by sales, profits, client encounters or even billable hours, that is the criteria by which performance will need to be evaluated, and employees should have clear notice of the expectations.