The Massachusetts Attorney General’s Office has issued proposed regulations to the Massachusetts Earned Sick Leave Law, which was approved by voters in November 2014 and goes into effect on July 1, 2015 – less than two months from now.   The proposed regulations address a number of key issues regarding when and how employees will accrue and may use sick leave under the law.  We briefly summarize them below.

Eligible Employees

Employees are eligible to accrue and use earned sick time if their primary place of work is in Massachusetts.  Employees do not need to spend more than 50% of their time working in Massachusetts, just more time in Massachusetts than at any other location.  All hours an eligible employee works regardless of location of the work count toward accrual of earned sick time.

Payment of the Sick Leave at the “Same Hourly Rate”

Employers must pay earned sick time at the “same hourly rate” as the employee earns at the time the paid sick is used.  For hourly employees, that means base rate wages plus any other benefits paid or accrued on an hourly basis.  Employees who receive different pay rates for hourly work must be paid at the weighted average of all such pay rates during the previous pay period.  For employees paid on a salary or fee basis, the same hourly rate is the employee’s total earnings in the previous pay period divided by the total hours worked during that period.  If salaried employees do not track time, employers should assume a 40-hour workweek.  For employees paid on commission, the same hourly rate means the greater of the base wage or the effective minimum wage.  The same hourly rate does not include commissions, draws, bonuses, or other incentive pay, sums excluded from the regular rate of pay under the Fair Labor Standards Act, or overtime, holiday pay, or other premium rates.

Breaks in Service

If an employee separates (whether voluntarily or involuntarily) and returns to work within one year, defined as a “break in service,” then the employee would maintain right to use any earned sick time that had accrued before the break in service.

Discipline for Fraud and Abuse

If an employee is committing fraud or abuse by using sick time in a manner that is not consistent with allowable purposes for leave (e.g. being sick, caring for an ill family member) or by exhibiting a clear pattern of taking leave on days when the employee is scheduled to perform duties perceived as undesirable, an employer may discipline the employee for misuse of sick leave.

Allowable Substitution of Employer’s Paid Leave Plans

Employers may deviate from the accrual rate of earned sick time if their sick leave (or other paid leave) policies are more generous than what is required under the Sick Leave Law.  In order for paid time off, vacation or other policies (PTO) to be substituted for the time off provided under the law, the time off under the PTO policy must:

• accrue at a rate of no less than 1 hour of PTO for every 30 hours of work;

• be paid at the employee’s same hourly rate, as defined in 940 CMR 33.02 above;

• be accessible for the authorized uses under the statute;

• come with the same notice requirements to employees; and

• be afforded the same job protections.

The guidance on the substitution of employer’s PTO policies is of particular importance to employers who already provide more than 40 hours of paid time off to employees.  Importantly, employers should note the following:

1. All employees are eligible to accrue sick leave (including temporary and part-time employees). If employers have more stringent requirements for their PTO policies, then they will need to expand eligibility or have a separate sick leave policy for non-PTO eligible employees.

2. PTO policies must comport with the “same hourly rate” payment requirements described above and should expressly state the same.

3. PTO policies should clarify that, in accordance with the Sick Leave Law, employees may use the PTO for the reasons allowed under the law.

4. Employers may not require advance notice of use of PTO when the need for such time is based on a reason allowed under the law and is unforeseeable.

5. PTO policies cannot require medical certification from an employee until the employee has taken more than 24 consecutive hours of earned time for a reason allowed under the law. For employees who work 8 hours per day (and exempt employees who are assumed to work 8 hours per day), this means that an employer cannot require certification until after the employee has used earned sick leave for 3 consecutive workdays.  For employees who are scheduled to work shorter shifts, though, 24 consecutive hours could equate to more than 3 consecutive workdays.  For example, if an employee regularly works 6 hours per day, the employer cannot require medical certification until after the employee has used earned sick leave for 4 consecutive workdays.

The Attorney General’s Office has invited comments on the proposed regulations and will hold public hearings before implementation of final regulations.  The final regulations may contain different or additional guidance, so employers should stay up-to-date with developments before the July 1^st effective date.