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Jul 7, 2016

Let’s face it: The national conversation on paid leave has changed. Looking back even one year ago, news outlets were mainly focused on decrying the state of the unpaid sick and parental leave protections offered in the U.S., as compared to other developed countries.

That reality is rapidly changing. A number of states – California, Connecticut, Massachusetts, Oregon and Vermont – have passed laws mandating paid sick leave in employment. In addition to California, a few other states – New Jersey, Rhode Island and, most recently, New York – have enacted paid parental leave protections. And dozens of cities around the country – the number presently nears 30, and is expected to continue to rise at a rapid pace – have passed ordinances mandating paid sick and/or parental time off for employees.

Rules vary greatly

The new laws vary in their complexity and requirements, depending on the locale. For example, Massachusetts’ paid sick leave statute extends broadly to cover most employees within that state, including full-time, part-time, seasonal and temporary workers. Head southwest, and you find a substantially more limited statute: Connecticut’s paid sick leave law applies only to workers in certain service occupations employed by businesses with 50 or more employees. Cross the country to California, and there the relevant statute applies to all employees so long as they work in the state for at least 30 or more days in a given year.

These kinds of laws can present some sticky applicability questions, particularly for employers with a multi-state presence. For example, if the employer is headquartered in the state or a city with a paid leave act, might the protections of that act extend to the employees who reside in other locations and travel to the home office from time to time?

Who is an employee?

The answers to these kinds of questions depend on the definition of “employee” as it is set forth in the relevant act(s) and interpreted by the relevant case law. Because most paid leave statutes are new and thus the courts have yet to really grapple with interpreting them, initial guidance will have to be gleaned from the case law looking at the definition of the term “employee” in other relevant acts, for example, the state’s wage payment statute.

The amount of the paid time off required under the new paid leave laws also varies location to location, ranging  from as little as just three days paid for sick time off (Vermont from 2017 through 2018) to up 12 weeks paid (in New York) for parental leave. How much paid time off must be provided depends on various factors spelled out in the statutes, including, for example, the number of hours worked by the eligible employee within the preceding year, the size of the employer and the specific type of paid leave requested.

And the penalties for non-compliance may be substantial. For example, Chicago’s proposed paid sick leave ordinance, which is expected to become law this summer, provides for a private right of action and damages equal to three times the full amount of leave denied or lost due to a violation, as well as for attorneys’ fees. Oregon’s paid sick leave statute also allows employees to file civil lawsuits for alleged violations, and provides for an award of the attorneys’ fees to the prevailing party.

Paid leave laws are rapidly increasing

The recent flurry of legislative initiatives and enactments in the paid leave area indicates that some type and amount of paid leave is likely to soon become a legal requirement for many employers. Many companies, with the tech industry leading the pack, already have begun adapting to this reality by implementing paid sick and parental leave benefits on their own volition. These kinds of companies, including Etsy, Google, Netflix and Microsoft, have enjoyed much good press as a result of these initiatives, a benefit that, undoubtedly, will positively impact their long-term recruitment and talent retention efforts, particularly with  younger workers. With mixed success, other companies have lobbied against paid leave, arguing it is neither relevant nor affordable for their workforce.

See Dr. John Sullivan’s discussion of potential, unintended consequences of unlimited parental leave benefits.

Wherever you might stand, HR leaders are best advised to learn about any actual and/or pending legislative developments applicable to their companies’ geographic footprint and operations, and to review and, if necessary, revise their policies to bring them into compliance while still meeting their business’ unique expectations and demands.