Haven’t thought about compliance yet? Here are the basics of what you need to know.
(1) If your company does not provide time off, starting July 1st, it needs to do so. At minimum your company needs to provide 24 hours of time off in calendar year 2018, 32 hours in calendar year 2019, and 40 hours in calendar year 2020 and thereafter (the Total Yearly PTO Minimums). If you have 18 or more employees, the time must be paid; if you have less than 18 employees, the time can be unpaid. If you are on the 18 employee edge, the final regulations provide details as how to make the determination. Given the complexity of the determination, companies are encouraged to consult with an employment attorney to work through the details.
(2) If you have a paid time off (PTO) policy of any sort, such as a vacation policy, general PTO policy or sick time policy, there is still a good chance you are going to run afoul of the new law or have to provide additional time off if you did not revise your policies specifically to comply with the new law. Here are common ways PTO policies will not be compliant:
(b) For at least the portion of your PTO policy encompassing the Total Yearly PTO Minimums, the PTO policy should not restrict the way time is taken in a manner contrary to the statute or regulations. For example, under the regulations, the employee can take time off to care for an individual who lives with them, such as their roommate, and the employee cannot be required to provide a doctor’s note for absences that exceed three days (e.g., the absence must be for four or more days before asking for a note).
(c) The new law applies to all employees, including those commonly excluded by PTO policies -- temporary employees, part-time employees and other non-regular employees. Those employees might not ultimately reach the Total Yearly PTO Minimums as the regulations allow the employer to pro-rate the time and lengthen the waiting period before temporary and seasonal employees can take the time. However, exclusion of such employees violates the new law.
(d) The new law requires immediate accrual of the time (although the employee cannot take the time until at least ninety days after the start of employment). Many PTO policies currently start accrual (not just usage) after a probationary period.
(e) Employers should be cautious if they are providing the bare minimum Total Yearly PTO Minimums and are trying to prorate the accrual over the year. The final regulations appear to take an employer-favorable approach to the statute’s PTO exemption, rendering a good portion of the statute – the 1 hour for every 35 hour accrual requirement – void; however, a court may take a different view. Additionally, providing the bare minimum amount of total time on a pro-rata basis (with no carryover) may be considered impermissible because the employee would effectively not be able to use the time accrued towards the end of the year.