Massachusetts Attorney General (AG) Healey recently published a safe harbor, titled “Transition Year: Safe Harbor for Employers with Existing Paid Time Off Policies,” which relates to the recently enacted Earned Sick Time (EST) law. The AG recently filed draft regulations on the EST law (see our article in the May 5, 2015, edition of Compliance Corner), which further detail the general requirement for employers to allow employees to earn and use up to 40 hours of paid sick leave per year. However, it’s not clear whether those draft regulations will be finalized prior to the EST law’s July 1, 2015, effective date. According to the safe harbor, for the period of July 1 to Dec. 31, 2015, any employer that has a paid time off (PTO) plan in place on May 1, 2015, that provides at least 30 hours of PTO during the 2015 calendar year will be considered as in compliance with the EST law with respect to those employees covered by the PTO plan (and to any other employees to whom the PTO plan is extended). Importantly, to remain in compliance, any PTO, including sick time, used by an employee during the safe harbor period must be job-protected leave subject to the EST law’s non-retaliation and non-interference provisions. The safe harbor extends only to Dec. 31, 2015, therefore employers relying on the safe harbor must adjust their PTO policies to comply with the EST law by Jan. 1, 2016.
The safe harbor comes as welcome news to many Massachusetts employers, particularly those with PTO plans currently in place that provide at least 30 hours of PTO per year. Employers should work closely with outside counsel in adjusting their PTO plans to comply with the EST law, particularly since the EST law implicates other non-benefit issues, such as labor and employment law.
Transition Year: Safe Harbor for Employers with Existing Paid Time Off Policies