Picking up on issues raised in Part 1, Part 2 outlines proactive steps for employers as they consider the bewildering array of requirements around Mandatory Paid Leave in the United States.  

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Mandatory Paid Leave: Compliance Hodgepodge Part 2

Thu May 12, 2016

Part 1 of this blog outlined some basic questions employers need to ask about a wave of some thirty separate and often conflicting state and local paid leave mandates.

Notwithstanding this bewildering array of requirements, employers who have employees in these jurisdictions can take proactive steps to stay in compliance.

  1. Get up to speed on the latest developments in jurisdictions that have enacted or are considering paid leave legislation. With the help of legal counsel, the Society of Human Resource Management and the American Payroll Association make sure the organization understands the many variations in these paid time-off mandates. Effective dates vary from state to state and municipality to municipality, so employers have time to learn about new laws and come into compliance.
  2. Re-evaluate the organization’s time and attendance policy, particularly where it does not distinguish between sick leave and vacation leave. Personal time off (PTO) policies will no doubt run afoul of state and local laws that mandate paid sick leave per se. For multi-jurisdictional employers facing different paid sick leave mandates a “greatest common denominator” policy may make sense, i.e., organization-wide implementation of the local ordinance most generous to employees. To lessen administrative complexity, some employers are changing existing policy to “frontload” employee accounts at the beginning of the year with the maximum number of hours accruable annually and also allowing employees to draw down hours as soon as they become eligible.
  3. Take a hard look at the organization’s overall Human Capital Management (HCM) strategy and solutions. The latest HCM technologies can automate the administrative, payroll and recordkeeping functions necessary for compliance with disparate paid sick leave mandates. 

Looking back at the Part 1 questions, for example, a state-of-the-art HCM solution can track when employees become eligible to accrue and use paid leave, the rate at which they earn leave time, when they hit the annual limit on sick leave hours earned and the maximum they can carry-forward to the following year—differentiating among each and every state or local mandate.

And depending on whether the relevant state or local ordinance specifies the employee’s advance notice obligations and the minimum increments of time employees may take paid sick leave, employers may need to leverage HCM technology to create and manage a real-time scheduling system.

To be sure, HCM technology should also be scalable so as to seamlessly incorporate new mandatory paid sick leave idiosyncrasies as they are enacted.

As municipal paid sick and family leave mandates proliferate, employers may question whether a uniform national standard, i.e., a federal paid sick leave law, would untangle the knots. The answer is yes, but. In the case of the 1993 Family & Medical Leave Act, which mandated job-protected, though unpaid, leave, the federal statute failed to pre-empt state and local family and medical leave legislation. Employers must therefore comply with the federal FMLA as well as numerous state laws.

One can envision the same scenario unfolding on paid sick leave: a new federal law on top of a multiplicity of state and local mandates. In this case the federal statute would quickly devolve from being a compliance solution for employers to becoming part of the compliance problem. Faced with this dilemma most employers would take their chances with Justice Brandeis’ “laboratories of democracy.”