How to Apply Paid Leave Laws

Applying paid leave laws, generally, is more complex than other types of employment law compliance.

Minimum wage – make sure you’re paying the correct rates. Ban the box – don’t disqualify job applicants with certain criminal backgrounds. Job protections for off-duty marijuana use? Adjust your company’s internal policies.

But applying paid leave laws requires a second level of analysis.

Paid Leave Management. Simplified.

How to Apply Paid Leave Laws

From something as seemingly simple as rate accrual to the quirks of calculating average weekly wages, paid leave management could be considered the most challenging of all employment law management.

Let’s take a recent example to illustrate the point.

There’s a new Minnesota paid family and medical leave (PFML) law. How are benefits applied?

A PFML applicant’s weekly benefit is calculated by applying the following percentage to their average typical workweek and weekly wage during the high quarter of the base period and adding the sums together:

• 90 percent of wages that do not exceed 50 percent of the state’s average weekly wage;
• Plus 66 percent of wages that exceed 50 percent of the state’s average weekly wage but not 100 percent; plus
• 55 percent of wages that exceed 100 percent of the state’s average weekly wage

That make sense?

For those without an “esq.” or “J.D.” behind their name, it’s not easy. And those HR teams applying paid leave laws often aren’t attorneys. (Or they need to ask legal counsel for interpretation.)

So, how do you apply paid leave laws?

Paid Leave Glossary

Managing Paid Leave Laws

The first step toward breaking down paid leave laws is understanding the basics. There are many small parts of these laws that make up the whole.

Let’s examine some paid sick leave laws to see how they differ and what employers need to monitor in terms of their application.

As mentioned above, accrual rates are a good illustration of how large employers can go awry when applying paid leave laws across the U.S. As might be expected, accrual rates differ depending on the jurisdiction. A few examples include:

• Vermont – 1 hour for every 52 hours worked
• Connecticut, Washington – 1 hour for every 40 hours worked
• Michigan, Rhode Island – 1 hour for every 35 hours worked
• Arizona, California, Maryland, Massachusetts New Jersey – 1 hour for every 30 hours worked

So employers that operate in several states should have a handle on the requirements.

Guide: County and City Paid Sick Leave Laws

Other factors to consider for applying paid sick leave laws include:

Frontloading – Most jurisdictions allow it. Generally, carryover is not required when frontloading.

Waiting period before use – The most common delay before an employee can use paid sick leave is 90 days after employment. Some jurisdictions use calendar days, from 106 to 180 to a full year, while others use hourly requirements.

Carryover requirements – All paid sick leave laws allow employees to carry over accrued unused paid sick leave, though the amount can differ, with 40 hours being the most common.

Payment requirements – Typically, an employee using paid sick leave must be paid the same as his or her regular rate. Tips (for workers who receive them) do not need to be included in most jurisdictions; same for bonuses or incentive pay. For commissions, however, an employer must often give a reasonable estimate as part of the paid sick leave payout.

How to Manage Paid Leave for Remote and Hybrid Workers

How to Apply Paid Family and Medical Leave Laws

How to apply paid leave laws?

The real trouble can come with paid family and medical leave (PFML). These are less common than paid sick leave laws, but require more attention to detail to remain compliant.

That starts with how these programs are funded. Often, employers and workers will pay into a state program for months before benefits are available.

From there, it’s the calculation of benefits that gets tricky.

Take the PFML law in Connecticut.

• If an employee’s base weekly earnings are less than or equal to 40 times the state minimum wage, the weekly benefit will be 95 percent of his or her base weekly earnings, up to 60 times the Connecticut minimum wage
• If the worker’s base weekly wage is greater than 40 times the minimum wage, the benefit will be 60 percent of their base weekly earnings up to 60 times the state minimum wage

So, employers have to understand the benefits formula as well as keep up with any changes to minimum wage in Connecticut, which has been on an odd increase schedule in recent years. (In 2021, the state’s minimum wage increased on Sept. 1. In 2022 it went up on July 1. For 2023, Connecticut minimum wage increased June 1.)

Meanwhile, there is also the maximum length of leave. These, too, differ across jurisdictions.

Under Maryland’s PFML law, for example, employees are eligible for 12 weeks of benefits in an application year.

However, an additional 12 weeks of benefits may be available if the covered employee takes leave for birth, adoption or placement of a child and then needs to take time off for their own serious health condition that renders the employee unable to perform their job duties.

Lastly, employers need to ensure they are aware of any potential amendments to paid leave laws, recordkeeping requirements, potential guidance from departments of labor, and more.

Infographic: Family Matters

Final Tip

When possible, apply paid leave laws concurrently.

Conclusion

The process of applying paid leave statues is generally more difficult than other areas of employment law.

The examples above illustrate the challenges for large employers that have locations across the country. Even a minor misstep in one area can lead to a cascade of issues.

This Employment Law News blog is intended for market awareness only, it is not to be used for legal advice or counsel.