In mid-June 2015, the Montgomery County Council unanimously voted to enact a law that mandates paid leave be provided to persons working in the county, including those working in the private sector. The Earned Sick Leave and Safe Leave Bill, which will go into effect in October 2016, affects businesses of all sizes by requiring employers to provide a minimum of one-hour paid time off for every thirty (30) hours worked by an employee. As the only requirement to accrue this leave is the number of hours worked, this law applies equally to all businesses and to full-time and part-time workers alike. For persons working at businesses that employ at least five (5) or more employees, workers will be able to earn up to seven (7) days (i.e., 56 hours) of paid leave per year. Workers employed by businesses with fewer than five (5) employees will be able to earn up to four (4) days (i.e., 32 hours) of paid leave and 24 hours of unpaid (but protected) leave per year. Unlike the paid leave law in the District of Columbia—D.C. Sick and Safe Leave Law, which does not allow an employee to start using the accrued leave until having worked at least 90 days for the employer—the Montgomery County law appears to have no “probationary period,” letting employees use this leave as they accrue it.
As the name reflects, this leave is not just for use as “sick leave,” but also for “safe time,” meaning leave that an employee may need to obtain medical attention, victims services, counseling, relocation, or legal services as a result of sexual assault, stalking, or domestic violence. Lawmakers estimate that the enactment of this law will expand paid leave to approximately 100,000 persons working or residing in the county. For those employers who already provide for paid leave, pre-existing policies may stay in place so long as they meet the minimum number of hours required and employees are allowed to use the leave as allowed by the law; meaning that employers who do not yet allow the use of paid time off for “safe time” purposes must begin doing so.
Although the County Council delayed enactment of this law for over a year, it’s implementation and compliance is not to be taken lightly as the bill allows for employees whose leave has been denied or interfered with, or who have been retaliated against for taking or attempting to take this leave, to file a complaint with the Montgomery County Office of Human Rights, which will then investigate and adjudicate the matter.
In mid-June 2015, in addition to passing The Earned Sick and Safe Leave Bill, the Montgomery County Council also passed legislation dictating minimum wage requirements for tipped workers. Joining its neighbor, Prince George’s County, the Council decided to freeze the minimum base wage for tipped workers (such as bartenders and waiters) at $4.00 per hour, making the wage the same between the two counties. This figure was reached using Maryland’s statewide minimum wage ($8.00) rather than Montgomery County’s higher minimum wage of $8.40, the latter of which only applies to non-tipped hourly workers. Even though the County Council used the state minimum wage to determine the base wage, nonetheless, tipped workers must earn at least $4.40 in tips per hour to make up the difference between the base wage and Montgomery County’s minimum hourly wage (i.e., $8.40 – $4.00 – $4.40). If the employee does not earn sufficient tips, the employer is responsible for making up the difference.
As Montgomery County has already passed legislation that causes the minimum wage to increase over time, the amount that an employee must earn in tips (or that an employer must make up in pay) will change over time. A similar law is in place in The District of Columbia, which sets the minimum hourly rate for tipped workers at a rate of $2.77 an hour, but must make the going minimum wage of $9.50 with tips included. Employers have to make up the difference if they do not.
Last week, the U.S. Department of Labor (“DOL”) announced its proposal to increase the salary requirement that governs which employees are entitled to the Fair Labor Standard Act’s (“FLSA”) minimum wage and overtime laws. The FLSA has carved out several exemptions to the minimum wage and overtime laws for workers that fall into categories such as “executive,” “administrative,” or “professional” employees. If a worker meets the job duty qualifications to fall into one of these categories and receives the required minimum salary threshold, then that employee is not entitled to receive overtime pay of 1.5 times the hourly rate even if they work more than forty hours per week. Up until now, an employer met the salary threshold by paying the equivalent of $455 per week, or $23,660 per year. The DOL’s Proposed Rule Making aims to radically change this salary threshold by more than double – to require payment of at least $970 per week, or $50,440 per year starting in 2016.
While this change is not yet final, employers should begin thinking about the employees it currently classifies as not eligible for overtime pay under the executive, administrative, and professional exemptions. Stay tuned for more information on this subject in the future.
In March 2015, the Supreme Court in Young v. UPS ruled that an employee may be able to demonstrate pregnancy discrimination by her employer if the employer provided accommodations for some workers but not pregnant workers. Since then, the exact steps employers must take when a pregnant employee requests accommodations has been vague and murky. On June 25, 2015, the EEOC issued new enforcement guidance regarding pregnancy discrimination, which is available here. The new guidance does not affect most of the guidance issued on the same topic by the EEOC in July 2014, but instead is intended to further elaborate on the subject.
Friday’s historic ruling by the Supreme Court of the United States in Obergefell v. Hodges legalizing same-sex marriage in all 50 states might not have changed much for employers in Maryland, Virginia, and The District of Columbia, all of which recognized the legality of same-sex marriages prior to the Court’s ruling. The High Court’s ruling, however, is an excellent reminder of what this opinion—as well as local laws—means for your business:
Family and Medical Leave Act: The FMLA allows eligible employees to take up to twelve weeks of protected unpaid leave during any 12-month period to accommodate various medical and personal needs, such as caring for a family member, such as a spouse, with a serious health condition. Since the DOL’s issuance of guidance in 2013 defining “spouse” as including same-sex spouses, employers must provide FMLA-protected leave for an eligible employee to care for his or her same-sex spouse with a serious health condition. Maryland and Virginia do not have state counterparts to the federal FMLA law, but the District of Columbia does and allows eligible employees to take up to sixteen weeks of unpaid leave during any 24-month period to care for a family member (and an additional 16 weeks of medical leave for the employee’s own serious health conditions).
ERISA: Similar to the DOL, in 2013 the Employee Benefits Security Administration released guidance that defined a “spouse” as any individual who are lawfully married under any state law, including same-sex couples legally married in a state that recognizes such marriages but who live in a state that does not. For employers in Maryland, the District, and Virginia (as of October 2014), this means that this expanded definition of “spouse” must be taken into consideration when administering such plans.
Anti-Discrimination Laws: While federal law and many state laws do not yet bestow protected class status on employees based on gender identity and/or sexual orientation, there are some that do. Such prohibitions exist in Montgomery County (gender identity and sexual orientation), Prince George’s County (sexual orientation and “familial status”), and the District of Columbia (sexual orientation and gender identity/expression), all of which have private causes of action for employees. Arlington County, Virginia prohibits discrimination on the basis of gender orientation, but all complaints must be brought by the County’s Human Rights Commission, as a private cause of action by the employee against the employer is not permitted by the County Code.
Employer-Provided Health Plans: The effect of Obergefell on employer-provided insurance policies (e.g., health insurance and life insurance) in the private sector is an area to watch. As the Supreme Court’s opinion was limited only to determining the right of same-sex couples to marry and did not extend into the realm of private-sector employment benefits. As this is an area of the law that will undoubtedly develop in the coming months and years, stay tuned for more updates on the matter.
The contents of this Alert are for informational purposes only, and do not constitute legal advice. If you have any questions about this Alert, please contact a member of the Shulman Rogers Employment and Labor Law Group or the Shulman Rogers attorney with whom you regularly work.
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