Starting January 1, 2018, all Washington State employers must provide paid sick leave to all covered employees. Initiative 1443, which was voter-approved in the fall of 2016, requires employers to provide 1 hour of sick leave for every 40 hours worked. The potential ramifications of non-compliance include:
· Fines and legal expenses associated with an administrative investigation/action by regulators
· Civil action from departing employees, or the threat of action used to negotiate a separation settlement
· Negatively impacting the value of your company in a sale transaction if the buyer determines that you haven’t appropriately accrued for PTO
Who is an Employee?
· This law only applies to non-exempt employees, including part-time, full-time, seasonal and temporary non-exempt employees
· Some workers are not considered employees for purposes of 1443 including:
o White-collar exempt (salaried) employees
o Hand harvest laborers paid on a piece rate basis
o Outside salespersons
· For a full list of excluded workers or questions about interpretations, please contact us.
How does Sick Leave Accrue?
· Employers must accrue their qualifying employees’ sick leave at a rate of at least 1 hour for every 40 hours worked.
· Current employees begin to accrue sick leave hours starting January 1, 2018.
· New Employees begin accruing hours upon commencement of employment.
· Sick leave should accrue and be tracked in increments consistent with the Employees’ time tracking for compensation purposes.
· There is no maximum accrual or cap on the amount of sick leave hours that an employee can accrue, so if for example, an employee worked 2,000 hours in 2018, the employer must have accrued 50 hours of leave for them.
· At the end of the year, Employees must be allowed to carry-over up to 40 hours of their accrued, unused sick leave. Said another way, the employer can “cap” carry-over at 40 hours, though an employer may allow the employee to carry over more than 40 hours.
· Sick leave must be paid to Employees at their normal hourly compensation rate.
Sick Leave Use
· “Sick” leave doesn’t just mean sick-leave; Employees may use sick leave for:
o Their own illness or medical appointment
o Care of a family member
o Closure of an employee’s workplace or child’s school for health-related reasons
o Domestic violence leave
· An Employee must be allowed to use as much sick leave as they have accrued.
· Employers may impose a 90-day waiting period before new employees can use accrued sick leave, however, they still have to accrue hours during this wait period.
· Employers may require verification of the need for leave (such as a doctor’s note) only after an employee is absent for three consecutive days that the employee was required to work. The employer must have a written policy outlining the verification requirements. The drafting and implementation of any such a policy is something that should be carefully considered with input from your legal counsel.
· Obtaining verification cannot be an unreasonable burden to the employee. If the employee believes that obtaining verification would result in an unreasonable burden or expense, the employee must be allowed to provide a written or verbal justification explaining why the employee cannot comply with the verification request. The employer must then make a reasonable effort to identify alternative ways for the employee to meet the verification requirement.
· If an employee is re-hired by the same employer within twelve months after the date the employee separates from employment, the employer must reinstate the employee’s accrued, unused, paid sick-leave.
· Frontloading: Employers may choose to frontload sick leave by offering employees a set amount of sick hours at the beginning of each year. However, accrual and use must still be tracked. Employers must provide additional sick leave to employees who work more hours than expected and accrue more sick leave than was frontloaded.
What if I already offer Paid Time Off (“PTO”)?
· A PTO program will meet the requirement to offer paid sick leave as long as the PTO policy meets or exceeds all requirements of the law, including the rate of accrual and the carryover requirement. If the program complies with the law, employers are not required to offer additional sick leave on top of PTO, even if the employee uses all PTO for non-sick leave purposes. It is critical, however, that you clearly communicate to employees what the employer’s policy is, how it works, and, for example, that paid PTO leave already provided by the company is inclusive of any statutorily-required leave.
· Employers who offer more PTO than is required by the sick leave law may choose to designate a portion of PTO for use under the state sick leave law. The employer must track the accrual and usage of this designated portion of PTO separately. If the employer does not do so, the entire PTO leave balance must comply with the law, including the rules regarding verification of absences only after three days, increments of use, and retaliation.
Seattle City Ordinance
· The City of Seattle’s Paid Sick and Safe Time Ordinance has additional requirements for paid sick leave. Visit the City of Seattle Office of Labor Standards webpage for more information about Seattle’s Ordinance and any proposed changes to the Seattle law or contact us for a more detailed examination of your current workplace circumstances as they apply to the law.