Paid Sick Leave Ballot Proposal: What Employers Need to Know

Paid Sick Leave Citizens Initiative The “Time to Care Coalition” announced July 30 that it was launching a statewide petition drive on Paid Sick Leave –Goal: November 2016 ballot –If approved, Michigan would be one of only five states with a mandate (CT, CA, MA, OR)

Supporters Supported by the same groups that supported the minimum wage petition drive –Raise MI, Mothering Justice, SEIU, Economic Justice Alliance of MI, others Comes on heels of State of the Union address –Obama urges Congress, states to tackle Similar to federal E.O. –Expands requirements to federal contractors

Process July 13, 2015 Submit Proposal to Board of Canvasser s July 30, 2015 Petition approve d to form, triggerin g the collectio n gatherin g phase Aug May day window to collect 252,523 valid signatures June 1, 2016 Filing Deadlin e for any Initiated Law petitions June-July 2016 Board of Canvasser s meets to certify (or deny) petitions for Nov. General Election July-Aug 2016 If certified, Legislature has 40 days to adopt, reject or provide competing alternative Nov. 8, 2016 General Election

Time Off If 10+ employees: 1 hour of paid sick leave for every 30 hours worked –Employee can use 72 hours in a year –Employer may select a higher limit –Time would begin to accrue on 4/1/17 –All employees are counted (full-time, part-time, temp workers) –For employees hired after 4/1/17, employer may require the employee to wait 90 calendar days to use leave time

Time Off If less than 10 employees: 1 hour of paid sick leave for every 30 hours worked –Employees can use 40 hours in a year –If employee uses more than 40 hours, employee is entitled to use an additional 32 hours of unpaid sick leave –Employer may select a higher limit –All employees are counted (full-time, part-time, temp workers) Lose status if maintain more than 10 employees on payroll during 20+ calendar weeks/year

Carryover Carryover – Employees may carry over sick leave from year to year—but employer can limit to the prescribed limits –Employer determines how a “year” is calculated

Use of Time Time may be used in the “smaller of hourly increments” or the “smallest increment that the employer’s payroll system uses to account for absences or use of other time”  Depending on payroll system, time could be used in 10 th of an hour (6 min) increments

Paid Time Off (PTO) Paid Sick and Vacation Time – Businesses will be in compliance if they provide any paid leave that may be used for the same purposes and under the same conditions as required under the proposed act, so long as it accrues in total at a rate equal to or greater than the rate described  Language appears to allow one bank of paid time off (PTO)—but compliance will be an issue

Use of Time Acceptable uses for paid sick leave –Employee or family member’s mental/physical illness, injury, health condition, medical diagnosis, care/treatment –Issues related to domestic violence/sexual assault –Meetings at a child’s school or place of care related to child’s health or disability –Closure of employee’s place of business or child’s school or place of care because of a public health emergency  Allowable uses are broader than FMLA

Use of Time Language goes further than many employers’ policies, specifying that leave time can be used for family members, including any “individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship”  “Equivalent” concept removes any objective standard

Notification Advanced Notice – Employers cannot require unless the time off is “foreseeable” –Must give notice of the intention to use time off “as soon as practicable” –Does not allow an employer to require the employee to search for/secure a replacement  Language does not allow employees to meet employer call-in procedures in FMLA  Employees will be able to use time with no notice

Documentation Doctor’s Note – Employers cannot require until the employee has taken 3 consecutive days off –Employer must pay “all out-of-pocket expenses the employee incurs in obtaining the documentation” –No insurance = employer foots the entire bill –Can’t ask for detailed statement from the doctor  Doctor’s note is meaningless  Language ignores precertification procedures in FMLA

Litigation Judicial/Administrative Actions –Employer absence policies shall not treat paid sick leave as “an absence that may lead to or result in retaliatory personnel action” –Rebuttable presumption for adverse personnel actions  Rebuttable presumption is unprecedented

Litigation Allows for civil actions for relief: –Payment of sick time –Rehiring/reinstatement to previous job –Payment of back wages –Reestablishment of benefits –Liquidated damages with costs and reasonable attorneys fees –Civil fines of up to $1,000 for violations ($100 if fail to notify employees of rights/display poster) Can also file a complaint with the state

MI Proposal vs. Other States Michigan’s Initiative CaliforniaConnecticutMass.Oregon EnactedApril 1, 2017 January 1, 2015 January 1, 2012 July 1, 2015 January 1, 2016 Ratio Earned: Worked 1:30 1:301:401:30 Eligibility Timeline 90 days after employment Accrue after 30 days, use after 90 days Must work 680 hours for same employer 90 days after employment 90 days Small Employer Threshold < 10 Employees (including any independently contracted employees) No distinction made < 50 Employees < 10 Employees < 7 Employees

MI Proposal vs. Other States, cont’d Michigan Initiative CaliforniaConnecticut Massachusett s Oregon Cap on Annual Usage 72 Hours24 Hours40 Hours Carryover Yes, no hard cap on cumulative hours accrued. Employer decision. Carry over, but hard cap at 48 hours. Yes, but hard cap at 40 hours. Paid vs. Unpaid for Small Employers Sm. employers provide up to 32 hours unpaid time after 40 hours paid time is used. No distinction made. Small employers under 50 employees are exempt from any requirements. Small employers only required to provide 40 hours of unpaid leave time.

Tough to Beat Proponents’ polls suggest support in the 80% range –Polls better than minimum wage –Call it “earned sick time” versus “paid sick leave” for a reason –Passed by Mass. voters in 2014 by 60% –National issue intended to drive/take advantage of turnout in a presidential year –Will proponents have sufficient funds to get this passed?

Our Position MI Chamber opposes the ballot proposal –Likely to be many ballot issues we oppose in 2016 –Like 2012, may coordinate a comprehensive “NO” campaign Looking for members who are willing to engage in campaign activities, talk to the news media, etc.

Questions?

Wendy Block Director, Health Policy and Human Resources MI Chamber of Commerce 517/ (direct)