1. Massachusetts’ Sick Time Law
Orleans Chamber of Commerce
Brewster Chamber of Commerce
Eastham Chamber of Commerce
June 25, 2015
Presented by:

2. Steven M. Ellard, CPA Atlantic Payroll • Established in 1990
• Nationally recognized firm for providing CFO level services to small & mid-sized businesses

3. How did we get here? November 4, 2014 - Massachusetts’ voters
approved(59%-41%) ballot question 4
April 24, Attorney General’s office issues proposed
regulations
May 18, Attorney General’s office issues a
“safe harbor” delay for companies
with PTO policies in place on May 1, 2015
May 18 - June 5, Six public hearings on the
proposed regulations
June 10, Public comment period closes
June 22, Final Regs issued

4. Overview of the Law
Applies to every business with employees in Massachusetts
Employers with >10 employees are required to provide paid sick time
Employers with <11 employees are required to provide unpaid sick time
All employees are covered - full time, part time, seasonal, temp.
Employees accrue 1 hour for every 30 hours worked

5. Overview of the Law(cont.)
Applies to every business with employees in Massachusetts
Employees are entitled to accrue and use 40 hours of sick time per benefit year
Employees may carry- over up to 40 hours of sick time to the next benefit year
Employers are not required to pay employees for any accrued but unused sick time at the time of termination
Federal/city/state employers are exempt

6. Defining an Employee
Any person who performs services for an employer for wage, remuneration, or other compensation, as further defined by M.G.L. c & 148B.
Full time - part time - seasonal - temporary employees and intern
Employee’s primary place of work is in Massachusetts
Employees of cities and towns are not considered employees unless accepted by a vote or appropriation under Article CXV.
Definitions - page 2

7. Defining an Employer
Any individual, corporation, partnership or other private or public entity including any agent thereof, who engages the services of an employee for wages, remuneration or other compensation
Except the United States government shall not be considered an Employer and cities and towns shall only be considered Employers for the purposes of this law if this law is accepted by vote or by appropriation as provided in Article CXV
definitions - page 3
Two-way partnership – explain the the potential for cross referring clients.

8. Determining Employer Size
Paid Sick Time
An employer must provide earned PAID sick time to eligible employees if the employer maintained an average of 11 or more employees on the payroll during the preceding benefit year.
All of an employer’s employees, whether working in or outside of Massachusetts, and regardless of their eligibility to accrue and use earned sick time, shall be counted for the purposes of determining employer size.
Two-way partnership – explain the the potential for cross referring clients.

9. Determining Employer Size
Unpaid Sick Time
An employer must provide earned UNPAID sick time to eligible employees if the employer maintained an average of 10 or less employees on the payroll during the preceding benefit year.
All of an employer’s employees, whether working in or outside of Massachusetts shall be counted.
Two-way partnership – explain the the potential for cross referring clients.

10. Rate of Accrual
Employees accrue earned sick time at a rate of not less than one hour of earned sick time for every 30 hours of work, including overtime hours.
Exempt employees (salary) shall be assumed to work 40 hours in each work week for purposes of earned sick time accrual unless their job specifies a lower number of hours per week, such as a salaried part-time employee. In such a case, earned sick time shall accrue based on that specified number of hours per week
Two-way partnership – explain the the potential for cross referring clients.

11. Rate of Accrual - Cont.
Employees accrue earned sick time only on hours worked, not on hours paid when not working.
Vacation
Paid Time Off
Earned Sick Time
Question - Holidays?
Two-way partnership – explain the the potential for cross referring clients.

12. 90 Day Vesting Requirement
Employees begin accruing earned sick time on the first date of actual work and may begin to use any accrued sick time 90 calendar days after the first date of actual work, regardless of the number of days worked during the 90 calendar day period
Employees who have been employed by their employer for at least 90 calendar days as of July 1, 2015, begin accruing earned sick time as of July 1, 2015 and may use earned sick time as it accrues
Two-way partnership – explain the the potential for cross referring clients.

13. Break in Service
Voluntary or Involuntary
Following a break in service of up to four months, an employee shall maintain the right to use any unused earned sick time accrued before the break in service.
Following a break in service of between four and twelve months, an employee shall maintain the right to use earned sick time accrued before the break in service if the employee’s unused bank of earned sick time equals or exceeds 10 hours.
Two-way partnership – explain the the potential for cross referring clients.

14. Break in Service - Cont.
Following a break in service of up to twelve months, employees maintain their vesting days from the employer and do not need to restart the 90 day vesting period.
Two-way partnership – explain the the potential for cross referring clients.

15. Rate of Compensation “Same hourly Rate” Single rate of pay employees
Regular hourly rate
For employees who receive different pay rates for hourly work
the rate means the “blended” rate of the previous pay period or
the rate that would have been used if the employee had worked.
Whatever method the employer elects must be used consistently throughout benefit year
Two-way partnership – explain the the potential for cross referring clients.

16. Rate of Compensation(cont.)
“Same hourly Rate” standard
Employees paid a salary, the same hourly rate means the employee’s total earnings in the previous pay period divided by the total hours worked during the previous pay period
For employees paid on a piece work or a fee for service basis, the same hourly rate means a reasonable calculation of the wages or fees the employee would have received if the employee had worked.
Two-way partnership – explain the the potential for cross referring clients.

17. Rate of Compensation(cont.)
“Same hourly Rate” standard
For employees paid on commission, the same hourly rate means the greater of the base wage or the effective minimum wage.
For tipped employees, who ordinarily receive the service rate, the same hourly rate means the effective minimum wage.
Two-way partnership – explain the the potential for cross referring clients.

18. Rate of Compensation(cont.)
“Same hourly Rate” standard
The same hourly rate shall not include
Commission
Draw accounts
Bonuses
Other incentive pay
Overtime, holiday pay
Two-way partnership – explain the the potential for cross referring clients.

19. Use of Sick Time Allows employee to care for
Self, child, spouse, parent or parent of spouse
Individuals suffering from
Physical or mental illness
Injury
Medical condition
Address the psychological, physical or legal effects of domestic violence
Includes time to travel to and from appts.
Two-way partnership – explain the the potential for cross referring clients.

20. Use of Sick Time - Cont.
Employees have the right to use 40 hours of earned sick time per benefit year, if the employee works sufficient hours to earn the time.
An employee may not use earned sick time if the employee is not scheduled to be at work during the period of use.
Two-way partnership – explain the the potential for cross referring clients.

21. Use of Sick Time - Cont.
The smallest amount of sick time an employee can use is one hour. For uses beyond one hour, employees may use earned sick time in hourly increments or in the smallest increment the employer’s payroll system uses.
The law provides protection for both employees and employers.
The law provides options if mutually agreeable.
Two-way partnership – explain the the potential for cross referring clients.

22. Carry-over & Termination
Employees can carry-over up to 40 hours of unused earned sick time to the next benefit year.
Employers have the option(but are not required) to pay-out unused earned sick time at the end of the benefit year.
If paid out, employer must provide at least 16 hours of unpaid sick time at the beginning of the new benefit year.
Unused earned sick time is not required to be paid out upon separation.
Two-way partnership – explain the the potential for cross referring clients.

23. Transition Year
Employees shall begin to accrue earned sick time on July 1, 2015 and shall be eligible to use their earned sick time 90 days after their first date of actual work.
An employer shall not be required to provide more than 40 hours of earned paid sick time during the transition year, and any paid leave given in the benefit year prior to July 1, 2015 will be credited.
Two-way partnership – explain the the potential for cross referring clients.

24. Transition Year - Safe Harbor
Employers with a policy in existence on May 1, 2015 that provides paid time off or paid sick leave, shall be deemed in compliance with the Earned Sick Time Law until January 1, 2016.
See the Safe Harbor notice dated June 10, and the Transition year rules in the final regs for more details.
Two-way partnership – explain the the potential for cross referring clients.

25. Allowable Substitution of Employer’s Paid Leave Policies
Employers may have their own sick leave or paid time off policies, so long as all employees can use at least the same amount of time, for the same purposes, under the same conditions, and with the same job protections provided in M.G.L. c.149
Employers may have different paid leave policies for different groups of employees, so long as all employees can use at least the same amount of time, for the same purposes, under the same conditions and with the same job protections.
Two-way partnership – explain the the potential for cross referring clients.

26. Notice of Use of Earned Sick Time
Employees must notify their employers before they use earned sick time, except in an emergency.
For foreseeable or pre-scheduled use of earned sick time, the employer may have a written policy requiring up to seven days’ notice.
Unforeseeable absences require “reasonable” notice under the circumstances.
Two-way partnership – explain the the potential for cross referring clients.

27. Notice of Use of Earned Sick Time - Cont.
For multi-day absences, an employer may require notification of the expected duration of the leave or, if unknown, then on a daily basis from the employee or surrogate, unless the circumstances make such notice unreasonable.
An employer may require employees to use reasonable notification systems.
Employees are not required to reference the earned sick time law.
Two-way partnership – explain the the potential for cross referring clients.

28. Documentation of Use of Earned Sick Time
An employer may require written documentation for an employee’s use of earned sick time that:
Exceeds 24 consecutively scheduled hours
Exceeds 3 consecutive days on which the employee was scheduled to work
Occurs within the last 2 weeks of employment
Two-way partnership – explain the the potential for cross referring clients.

29. Documentation of Use of Earned Sick Time - Cont.
An employer may require written documentation for an employee’s use of earned sick time that:
Occurs after 4 unforeseeable and undocumented absences within a 3 month period; or
For employees aged 17 and under occurs after 3 unforeseeable and undocumented absences within a 3 month period.
Two-way partnership – explain the the potential for cross referring clients.

30. Documentation of Use of Earned Sick Time - Cont.
Employers cannot require information on the nature of the illness or domestic violence
Employers cannot disclose information on domestic violence without written consent of the employee
The Attorney General’s office will provide model forms for documenting the use of sick time.
Two-way partnership – explain the the potential for cross referring clients.

31. Documentation of Use of Earned Sick Time - Cont.
Employees must submit documentation within 7 days.
Employers may recoup sums paid for earned sick time from future pay, if documentation is not submitted.
Employers may deny future use of unpaid sick time, if documentation is not submitted.
Employers may require employees to personally verify in writing that they have used earned sick time for allowable purposes.
Two-way partnership – explain the the potential for cross referring clients.

32. Prohibition on Retaliation and Non-interference
It is unlawful for any employer to interfere with, restrain, or deny the exercise of or the attempt to exercise, any rights provided under or in connection with this law.
It is unlawful for any employer to take any adverse action against an employee, such as;
Denying use or delaying payment of earned sick time
Terminating an employee
Taking away work hours
Two-way partnership – explain the the potential for cross referring clients.

33. Recordkeeping & Disclosure
Employers shall keep true and accurate records of the accrual and use of earned sick time.
Employers shall maintain such records for a period of 3 years.
Employers must provide records to employees within ten business days and allow employees to inspect the original paper or electronic records at a reasonable time and place.
Two-way partnership – explain the the potential for cross referring clients.

34. Recordkeeping & Disclosure
Employers shall post the Earned Sick Time Notice of Employee Rights, prepared by the Attorney General, in a conspicuous place accessible to all employees in every location where eligible employees work.
Employers shall provide a hard copy or electronic copy of this notice to all eligible employees, or include the employer’s policy on earned sick time or substitute paid leave policy in any employee manual or handbook.
Two-way partnership – explain the the potential for cross referring clients.

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