Effective Jan. 1, Vermont will become the latest jurisdiction to require employers to provide paid sick leave to their employees. Employees initially will be eligible to accrue and use up to 24 hours of paid sick leave annually, and that number will increase to 40 hours annually two years after the statute goes into effect.

Four other states (Connecticut, California, Massachusetts and Oregon) and numerous municipalities have adopted paid sick-leave laws in recent years, and similar measures have been proposed in many other jurisdictions.

Employers should monitor these developments closely and ensure that they are in compliance with all applicable paid sick-leave laws.

Vermont paid sick-leave law

The most significant provisions of the new Vermont statute are summarized below:

Employer coverage. All employers doing business in Vermont are covered by the law, regardless of size. However, employers with five or fewer employees working 30 hours or more a week will not be subject to the new mandate until Jan. 1, 2018. In addition, new businesses are exempt from the statute’s requirements for a period of one year after they have hired their first employee.

Employee eligibility. In general, employees are eligible to accrue and use paid sick time if they work an average of 18 hours or more a week. Certain categories of employees, however, are excluded from eligibility, including federal employees, some state employees, certain temporary and per diem employees, and employees under the age of 18.

Accrual and use of paid sick time. Eligible employees must be allowed to accrue one hour of paid sick time for every 52 hours worked. Between Jan. 1, 2017, and Dec. 31, 2018, employers may limit an employee’s accrual and use of paid sick time to 24 hours in a 12-month period. After Dec. 31, 2018, that annual cap will rise to 40 hours.

Waiting period. Employers may require newly hired employees to wait for up to one year before using accrued paid sick time. However, eligible employees are entitled to begin accruing paid sick time immediately upon commencing employment.

Use of paid sick time. An eligible employee may use accrued paid sick time for any of the following purposes:

to address the employee’s own illness, injury or other need for professional diagnostic, preventive, routine or therapeutic health care;
to assist a close relative in obtaining treatment from a health care provider, or to attend an appointment relating to the relative’s long-term care (the statute specifies which relatives are covered by each of these requirements);
to assist a parent, grandparent, spouse, child, brother, sister, parent-in-law, grandchild or foster child who is a victim of domestic violence, sexual assault or stalking, or who is relocating for one of those reasons;
to care for a parent, grandparent, spouse, child, brother, sister, parent-in-law, grandchild or foster child, if the school or business where the relative is normally located during the employee’s workday is closed for public health or safety reasons.

Increments of use. Employees generally must be allowed to use accrued sick time in the smallest increments that the employer’s payroll system uses to account for other absences. However, employees need not be permitted to use accrued sick time in increments shorter than one hour.

Notice. Employers may require employees to provide notice as soon as practicable of their intent to take sick time and the expected duration of their absence. In addition, employers may require employees to make “reasonable efforts” to avoid scheduling routine or preventative health care during regular work hours.

Carryover/payout. Employers may either pay out accrued, unused sick time to employees annually, or permit employees to carry over accrued, unused sick time from one year to the next. However, an employer need not permit employees to use more than 40 hours of accrued sick time in any 12-month period. Employers are not required to pay employees for accrued, unused sick time upon separation from employment.

Notice of rights. Employers will be required to post a notice summarizing the law’s requirements, in a form to be provided by the Vermont commissioner of labor. Employers also will be required to notify new employees of their sick-leave rights upon hire.

Paid time-off policies. Preexisting policies (e.g., sick time, vacation or similar paid time-off policies) may satisfy the new Vermont law, provided that such policies allow employees to accrue and use paid time off for sick-leave purposes to at least the same extent as under the new statute.

In light of the new Vermont statute and the continuing trend of similar laws elsewhere, employers should carefully review all applicable sick-leave laws and ensure that their operations and written policies are compliant.

Other state and local laws

In addition to Vermont, paid sick-leave laws have been enacted in Connecticut, Massachusetts, California and Oregon.

Connecticut. Employers with 50 or more employees in Connecticut must allow specified “service workers” to accrue and use up to 40 hours of paid sick time a year.

Massachusetts. Massachusetts employers with 11 or more employees are required to permit all employees to accrue and use up to 40 hours of paid sick time a year. Employees are entitled to accrue a minimum of one hour of paid sick time for each 30 hours worked. For employers with fewer than 11 employees, these same requirements apply, except that sick time may be unpaid.

California. California employers must permit employees who work at least 30 days within a year to accrue one hour of paid sick time for each 30 hours worked. An employer may cap an employee’s sick-time accrual at 48 hours, and limit the use of paid sick time in a year to 24 hours.

Oregon. Oregon requires employers to permit employees to accrue and use one hour of sick time for each 30 hours worked, up to 40 hours of sick time a year. For employers with 10 or more employees, sick time must be paid; smaller employers may provide unpaid sick time.

In addition, numerous localities across the United States have enacted paid sick-leave measures over the past several years. While this is not an exhaustive list, these include:

Montgomery County, Maryland. Beginning Oct. 1, most employers in Montgomery County (just outside Washington, D.C.) will be required to provide employees with one hour of paid sick time for every 30 hours worked, up to 56 hours in a calendar year.

Oakland, California. Oakland employers must provide employees with one hour of paid sick leave for every 30 hours worked. Businesses with fewer than 10 employees may cap accrued sick leave at 40 hours, while larger employers must allow employees to accrue up to 72 hours. Employers are not permitted to limit employees’ use of accrued sick time within a given year

New York City. Employers with five or more employees (or with one or more domestic workers) must provide up to 40 hours of paid sick time annually to employees who work in the city at least 80 hours in a year. Eligible employees must be allowed to accrue at least one hour of paid sick time for each 30 hours worked.

Portland, Oregon. Employers with six or more employees must provide up to 40 hours of paid sick leave annually to employees who work at least 240 hours in Portland in a year.

Washington, D.C. All employers located within the District of Columbia must provide employees with paid sick time ranging from three to seven days annually, depending on how many employees an employer has.

Seattle. Seattle employers with at least five full-time equivalent employees must offer paid sick and “safe time” to employees who work more than 240 hours within the city during a calendar year. (“Safe time” refers to leave related to domestic violence, stalking or sexual assault, or because of the closing of a workplace, school or day care facility due to a health hazard.) Depending on the size of an employer’s workforce, employees must be allowed to accrue up to 72 hours of paid sick and safe time annually.

Philadelphia. Under a Philadelphia ordinance, certain categories of employers must provide employees with up to 32 or 56 hours of paid sick leave a year, depending on how many employees they have.

San Francisco. A San Francisco ordinance requires all employers to provide employees with at least one hour of paid sick leave for each 30 hours worked within the city, up to a limit of either 40 or 72 hours annually, depending on an employer’s headcount.

Recommendations for employers

In light of the new Vermont paid sick-leave statute and the continuing trend of similar laws elsewhere, we recommend that employers carefully review all applicable sick-leave laws and ensure that their operations and written policies are compliant.

Employers also should provide appropriate training to managers, HR employees and payroll/benefits personnel.

Finally, employers should remain alert for similar legislative developments in the localities in which they operate.

Soyoung Yoon is an attorney at Schwartz Hannum, which represents management in labor and employment law matters.