Machinist Union District 160 Initiative 1433 Machinist Union District 160 Tuyen Manikhoth 360.280.6498 Tuyen.Manikhoth@lni.wa.gov

The intention of this presentation is to help provide the public with guidance to the application and enforcement of the Washington (WA) State paid sick leave law taking effect January 1, 2018. Please be aware that the rules are not yet finalized and are subject to change before the effective date listed above. For this reason, some of the answers provided within this presentation may be subject to change as well. Disclaimer

Initiative 1433 (I-1433) In November 2016, voters passed I-1433 Increases minimum wage over the next several years Ensures tips and service charges are given to the appropriate employee Requires employers to provide paid sick leave to most employees beginning January 1, 2018 Protects employees from retaliation for lawful use of paid sick leave set forth by the Minimum Wage and Labor Standards Act (chapter 49.46 RCW)

I-1433 Covered Employees I-1433 was written into the existing Minimum Wage Act As a result, workers that are exempt from the minimum wage are also exempt from the new paid sick leave requirements Examples of such workers include: Any individual paid a certain salaried amount and employed in a bona fide executive, administrative, or professional capacity. RCW 49.46.010(3)(c) Any individual whose duties require that he or she reside or sleep at the place of his or her employment. RCW 49.46.010(3)(j)

Minimum Wage Applies to workers in both agricultural and non-agricultural jobs Although there are some exemptions, most workers must be paid at least the minimum wage for all "hours worked" as required by state law Agreements may not be entered into, individually or collectively, between an employee and an employer that result in the employee being paid less than the minimum wage, overtime, or paid sick leave requirements set forth by the Minimum Wage and Labor Standards Act (chapter 49.46 RCW)

Future Minimum Wage Rates The minimum wage will increase annually over the next four years: Year Rate (per hour) 2017 $11.00 2018 $11.50 2019 $12.00 2020 $13.50 2021+ Established by L&I* *The minimum wage will be calculated by L&I each year in September and goes into effect on January 1st of the following year.

2017 Minimum Wage Employers must pay employees age 16 and older at least $11 per hour. Employers may pay employees under 16 years of age 85% of the minimum wage ($9.35 per hour in 2017)

Tips & Service Charges All tips and gratuities; and the customer. All service charges as defined under RCW 49.46.160, except those that are itemized as not being payable to the employee or employees servicing the customer. servicing the customer. Tips and service charges paid to an employee are in addition to, and may not count towards, the employee’s hourly minimum wage. servicing the customer.

Paid Sick Leave L&I’s #1 Goal is to make workplaces safe. The paid sick leave law supports that goal. By allowing workers to earn paid sick leave, we help prevent the spread of diseases and keep our workplaces, communities and our families safe.

Paid Sick Leave Accrual An employee shall accrue a minimum of one hour of paid sick leave for every 40 “hours worked”. Employees accrue paid sick leave for ALL hours worked. Hours worked is defined as all hours during which the employee is authorized or required by the employer to be on duty on the employer’s premises or at a prescribed workplace. 2nd bullet – hours worked does not differentiate between regularly assigned hours and overtime hours. So paid sick leave accrual will apply to overtime hours as well. For each hour of paid sick leave used, an employee shall be paid his or her normal hourly compensation

Paid Sick Leave - Rate of Pay For each hour of paid sick leave used, an employee must be paid their “normal hourly compensation”. Normal hourly compensation is defined as “the hourly rate that an employee would have earned for the time during which the employee used paid sick leave.” The Department offers examples as to how to calculate rate of pay for employees paid other than an hourly rate under draft rule language WAC 296-128-670 For employees paid other than an hourly rate, employers must use a reasonable calculation to determine the employees’ normal hourly compensation.

Paid Sick Leave - Rate of Pay For an employee whose hourly rate of pay fluctuates: If an employer can identify an employee’s hourly rate of pay for the time they were scheduled to work, then they would provide the employee with that rate of pay. If an employer cannot identify an employee’s hourly rate of pay for the time they were scheduled to work, the employer would need to calculate the employee’s average rate of pay for the current or past 30 days, and provide the rate of pay that is higher. This example would work for prevailing wage

Paid Sick Leave - Rate of Pay Frequently Asked Question regarding overtime: For employees who use paid sick leave for hours that would have been overtime hours if worked, employers are not required to apply overtime rates to an employee's normal hourly compensation. The overtime rate only must be paid for hours actually worked.

Paid Sick Leave Accrual Paid sick leave for employees who are employed on or before January 1, 2018, will accrue for all hours worked beginning on January 1, 2018 Employees hired after January 1, 2018, begin accruing paid sick leave upon the commencement of his or her employment

Paid Sick Leave Accrual Employers must allow employees to carry over at least forty hours of accrued, unused paid sick leave to the following year Employers may cap carryover of accrued, unused paid sick leave to the following year at 40 hours

Sick Leave – Authorized Usage Mental/physical illness, injury or condition Preventative medical care Diagnosis and/or treatment Care of family member Employee’s place of business closed for health related reasons Employee’s child’s school/ place of care closed for health related reasons Absences that qualify for leave under WA’s domestic violence leave act

Qualified Family Members Child * Parent * Spouse Registered Domestic Partner Grandparent Grandchild Sibling See RCW 49.46.210 for detailed definitions * Includes biological, adopted /adoptive, foster, step, legal guardian Paid sick leave can be taken to care for family members.

WAC 296-128-630 – Paid Sick Leave Usage An employee is entitled to use accrued, unused paid sick leave beginning on the 90th calendar day after the commencement of his or her employment Unless subject to a variance, employers must allow employees to use paid sick leave in increments consistent with the employer’s payroll system and practices, not to exceed one hour

WAC 296-128-650 – Reasonable Notice An employer may require employees to give reasonable notice of an absence from work for the use of paid sick leave for an authorized purpose. Foreseeable leave vs. unforeseeable leave Requirements for a written policy or collective bargaining agreement

WAC 296-128-660 – Verification for Absences Exceeding Three Days For absences exceeding three days, an employer may require verification that an employee's use of paid sick leave is for an authorized purpose. Requirements for a written policy or collective bargaining agreement. Employer-required verification may not result in an unreasonable burden or expense on the employee.

WAC 296-128-670 – Rate of Pay For Use of Paid Sick Leave For each hour of paid sick leave used, an employee must be paid their normal hourly compensation An employer must calculate an employee's normal hourly compensation using a reasonable calculation based on the hourly rate that an employee would have earned for the time during which the employee used paid sick leave. An employer must apply a consistent methodology when calculating the normal hourly compensation of similarly situated employees.

WAC 296-128-680 – Payment of Paid Sick Leave Unless verification for absences exceeding three days is required by an employer, the employer must pay paid sick leave to an employee no later than the payday for the pay period in which the paid sick leave was used by the employee. If verification is required by the employer, paid sick leave must be paid to the employee no later than the payday for the pay period during which verification is provided to the employer by the employee.

WAC 296-128-690 – Separation & Reinstatement of Accrued Paid Sick Leave upon Rehire When an employee separates from employment and is rehired within twelve months of separation by the same employer, previously accrued, unused paid sick leave shall be reinstated. The employer is not required to provide financial or other reimbursement to the employee for accrued, unused paid sick leave at the time of separation, but may choose to. Entitlement for employee use of paid sick leave upon rehire.

WAC 296-128-700 – Paid Time Off (PTO) Programs A PTO program (e.g., a program that combines vacation leave, sick leave, or other forms of leave into one pool), created by a written policy or a collective bargaining agreement, satisfies the requirement to provide paid sick leave if the PTO program meets or exceeds the provisions of I-1433 and all applicable rules.

WAC 296-128-710 – Shared Leave An employer may establish a shared paid sick leave program where an employee may choose to donate paid sick leave to a coworker. Requirements for a written policy or collective bargaining agreement.

Paid Sick Leave – Employer Rights Provide more generous paid sick leave accrual and reasons for use An employer may, but is not required to, frontload paid sick leave to an employee in advance of accrual. For absences exceeding 3 days, an employer may require verification that the use of paid sick leave is for an authorized purpose. An employer’s requirements for verification may not result in unreasonable burden or expense on the employee and may not exceed privacy or verification requirements otherwise established by law. Employers may contract with a third-party administrator in order to administer the paid sick leave requirements under I-1433 and all applicable rules.

WAC 296-128-010 - Recordkeeping To meet the requirements for recordkeeping, WAC 296-128-010 will be amended to include requirements for employers to track: Paid sick leave accruals each month, and any unused paid sick leave available for use by an employee; Paid sick leave reductions each month; and The date of commencement of employment for each employee.

WAC 296-128-610 – Requirements for a Written Policy Where these rules set forth requirements for an employer to have a written policy, the department shall develop sample policies which meet the department’s standard for compliance with these rules. The department shall make such sample policies available on the department’s website.

WAC 296-128-720 – Shift Swapping Upon mutual agreement by the employer and employee(s) involved, an employee may work additional hours or shifts, or trade shifts with another employee, in lieu of using available paid sick leave for missed hours or shifts that qualify for the use of paid sick leave An employer may not require that an employee search for or find a replacement worker to cover the hours during which the employee is using paid sick leave.

WAC 296-128-750 – Employee Use of Paid Sick Leave for Unauthorized Purposes If an employer can demonstrate that an employee's use of paid sick leave was for an unauthorized purpose, the employer may withhold payment for such hours, but may not subsequently deduct those hours from an employee's paid sick leave bank. If an employee maintains that the use of paid sick leave was for an authorized purpose, the employee may file a complaint with the department.

WAC 296-128-760 – Employer Notification and Reporting to Employees Employer must notify their employees: their entitlement to paid sick leave; the rate at which the employee will accrue paid sick leave; the authorized purposes under which paid sick leave may be used; and For absences exceeding 3 days, an employer may require verification that the use of paid sick leave is for an authorized purpose. An employer’s requirements for verification may not result in unreasonable burden or expense on the employee and may not exceed privacy or verification requirements otherwise established by law. that retaliation by the employer is unlawful.

WAC 296-128-760 – Employer Notification and Reporting to Employee Not less than monthly, employers must provide employees with notification detailing the amount of paid sick leave accrued and reduced since the last notification, and any unused paid sick leave available for use by the employee. Notification can be made in writing or electronically. Employers may satisfy the notification requirements by providing this information in regular payroll statements.

Employers May Not: Require an employee to search for or find a replacement worker to cover the hours during which the employee is on paid sick leave Adopt or enforce any policy that counts the use of paid sick leave time as an absence that may lead to or result in discipline against an employee

Anti-Retaliation It is unlawful for an employer to take any adverse action against an employee because the employee has exercised their rights provided under chapter 49.46 RCW It is unlawful for an employer to adopt or enforce any policy that counts the use of paid sick leave for an authorized purposed under RCW as an absence that may lead to or result in discipline by the employer against the employee. It is unlawful for an employer to retaliate, discriminate, or discipline an employee who uses accrued paid sick leave for authorized purposes.

Paid Sick Leave – Employee Rights Use accrued paid sick leave beginning on the 90th calendar day after commencement of employment Use paid sick leave without being required to find a replacement for their shift Carryover of up to 40 hours of unused paid sick leave to the following year Employers can be more generous with their accrual and carryover amounts. When there is a separation from employment and the employee is rehired within twelve months of separation by the same employer, whether at the same or a different business location of the employer, previously accrued unused paid sick leave shall be reinstated and the previous period of employment shall be counted for purposes of determining the employee's eligibility to use paid sick leave under I-1433. Have unused paid sick leave reinstated if rehired by the same employer within 12 months

These rules will include: Rules Development I-1433 requires the Department of Labor & Industries (L&I) to administer and enforce these new provisions In 2017, L&I will develop rules to explain and enforce the new requirements These rules will include: Procedures for employers to notify their employee(s) Recordkeeping & reporting requirements regarding paid sick leave Protecting employees from retaliation for the lawful use of paid sick leave These rules are being developed in two rule making processes. Primary focus was to get the rules completed that will provide employers with an understanding of what they need to be in compliance prior to January 1st.

Enforcement Rule Development Hearing November 8, 2017 10am Spokane Center Place Auditorium 2426 N Discovery Pl Spokane Valley, WA 99216 November 9, 2017 10am L&I Tumwater Auditorium 7273 Linderson Way SW Tumwater, WA 98501 These rule hearings for the first rule making process. This process includes opportunities for public comment, including these scheduled public hearings on the first set of rules:

Paid Sick Leave Law Webinars November 16, 2017 9:30am - 11:00am 12:00pm - 1:30pm 2:30pm - 4:00pm November 20, 2017 9:30am - 11:00am 12:00pm - 1:30pm 2:30pm - 4:00pm November 29, 2017 9:30am - 11:00am 12:00pm - 1:30pm 2:30pm - 4:00pm Sign up on line at: http://www.lni.wa.gov/Main/WorkshopsTraining/Registration.asp

Employer Resource Center www.Lni.wa.gov Workplace Rights Coming Soon

Questions Where to Direct Questions For more information, go to www.Lni.wa.gov/sickleave. Contact the Employment Standards Program at L&I by phone (1-866-219-7321) or email (esgeneral@Lni.wa.gov).