Mandatory Sick Leave for Maryland Employees

May 1, 2018

Effective on February 11, 2018, all Maryland employers must comply with the Maryland Healthy Working Families Act. Employers who employ 15 or more employees in Maryland must provide paid leave; employers with 14 or fewer employees in the state are required to provide unpaid leave. Only employees whose primary work location is in Maryland are entitled to receive the benefit under this new law, regardless of whether the employer is based in Maryland or not.

Here are some highlights of the law:

  • Leave accrues at the rate of one hour for every 30 hours that an employee works. Leave may be earned on an accrual basis for hours worked, or the employer can award the full amount on a lump sum basis at the beginning of each year.
  • Employees must be permitted to earn at least 40 hours of leave per year.
  • Leave accrues as of January 1, 2018, but we have not found any guidance to account for the fact that the law did not take effect until February 11, 2018.
  • Employers need not accrue any benefits during a bi-weekly or semi-monthly period during which the employee works fewer than 24 or 26 hours, respectively.
  • Exempt employees under Fair Labor Standards Act are presumed to work 40 hours per week.
  • Employees must be allowed to carry over at least 40 hours of unused leave to the following year.
  • Employers may limit leave used to no more than 64 hours per year. Employers may also prohibit leave from being used during the first 106 days of employment.
  • Unused leave does not have to be paid at termination; if the employer rehires the employee within 37 weeks after termination, the unused leave must be reinstated.
  • Employees who are not entitled to earn leave include:
    • Employees who work less than 12 hours per week;
    • Employees who are under age 18 as of January 1;
    • Certain construction workers covered under collective bargaining agreements;
    • Certain workers employed by temporary service agencies, health and human service employees working on an as-needed basis, certain agricultural workers, certain real estate salespersons and brokers, and certain independent contractors. Note that janitors, building cleaners, building security personnel, handypersons, and building superintendents are not considered to be construction industry employees.

For employers whose Maryland-based headcount is close to the 15 person threshold, the state of Maryland has issued extensive guidance and examples of how to calculate the threshold number of employees to determine whether they must be offered paid sick leave.

Contractors who meet the 15 person minimum and have employees covered under the Service Contract Act or the Davis-Bacon Act should carefully consider how this new law will impact their existing benefits and policies and how they interact with policies that cover those groups of employees working in Maryland or other states. The overlap of state and local benefits requirements, when overlaid with Federal requirements, is only getting more difficult for employers to navigate.

For any questions, feel free to contact one of our experienced GovCon professionals.