Guest Column: A New Mandate to Hit Maryland Employers?

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By: Walt Townshend & Christine Walters

Legislation is once again being proposed in Maryland that will significantly impact many employers.  Entitled the Maryland Healthy Working Families Act, SB 40, the bill has been introduced in previous sessions of the Maryland General Assembly, and is part of a national wave, as alluded to by President Obama in his State of the Union address, when he asked Congress to “Send me a bill that gives every worker in America the opportunity to earn seven days of paid sick leave.”

Maryland’s proposal would require employers with more than nine employees to:

• provide up to  7 days (56 hours) of paid leave to employees working at least 8 hours per week (1 hour for every 30 hours worked). 

• Accrue the leave from an employee's first day of work

• Permit the employee to use the leave by at least the beginning of the 4th month of work

• Permit the employee to use the leave for personal, medical or a variety of other reasons (much like PTO rather than vacation or sick leave)

• Roll at least 56 hours of leave over from year to year

• Reinstate any accrued, unused leave at the time of termination to an employee who is rehired within 12 months

• Permit the employee to use this leave in the smallest increment that the employer's payroll system uses and not more than one hour increments

• Not count any leave used for a covered absence toward corrective action

In addition, if the employer employs nine or fewer employees, the employer must provide this leave as unpaid leave.

Perhaps most alarming is the definition of who is a family member.  Your brother’s wife—they’re family.  An individual who was the primary caregiver when you were a minor—they’re family.   Imagine your HR staffer—if you have one, keeping track of all this, but then the law states that “an employer may not require an employee to…disclose details of…the mental or physical illness, injury or condition of the employee or the employee’s family member.”

Even more perplexing is that there is no “nexus” required.  My grandfather’s spouse (she’s family!) who lives in Florida is sick.  I call the doctor on her behalf and make an appointment, so I meet the proposed law’s test “to care for a family member with a mental or physical illness, injury or condition.”  Perfectly legal to take paid (or unpaid) leave for this.

And what about those businesses who already have a PTO or sick leave program? Will their policies likely need to be significantly broadened to comply with this law, if passed?  The simple answer: YES!

Once again Maryland is proposing a one-size-fits-all mandate that will be very fiscally and operationally challenging, particularly for small businesses.  In fact, the fiscal notes associated with a similar law proposed last year references a report that it would cost Maryland employers “…$165 million to provide new earned sick days for employees, which is equivalent to a 24-cents-per-hour increase in wages for employees receiving new leave.”

And how would SB 40 impact state and local government?

Again, the fiscal notes indicate that the Maryland Department of Labor, Licensing and Regulation (DLLR) which would have to advise businesses AND enforce the law, if enacted, “… cannot absorb the additional workload within existing resources and requires additional staffing.”   How many new complaints does DLLR anticipate?   The fiscal notes state: “DLLR estimates it could receive as many as 100,000 additional inquiries each year and 5,000 complaints alleging violations.”  So how many new staff members are needed?  DLLR estimates 6 regular and 6 contractual positions, for added annual costs of more than $518,000.

But wait, the definition of family member as provided in SB 40 means that more leave will be granted to state employees, and the fiscal notes here aver, somewhat timidly, that “As a result of the expanded circumstances to use earned [leave] for all SPMS employees, the Department of Budget and Management (DBM) reports general fund expenditures may increase significantly.”  The report quickly relates: “Additionally, 14,000 contractual employees who currently do not receive any leave benefits would earn sick and safe leave.”  So how much will this cost the taxpayers of Maryland?  While there is no stated total, Maryland’s Judiciary estimates its “expenditures increase $900,000 annually.”  Yes, a cool 1 million dollars for compliance in just one division of state government.

And the local governments—how will they be impacted?

The fiscal notes again tell the story well: “Many local jurisdictions do not offer seasonal, part time, or contractual workers earned sick and safe leave, so many local jurisdictions incur significant increases in expenditures.”  The analysis further reveals: …most local jurisdictions do not define family members as broadly as the bill and may only allow a portion of earned sick days to be used to care for sick family members.”

Total fiscal impact on county government?  Again, nobody knows, but “Montgomery County estimates expenditures increase between $462,000 and $694,000.”  Let’s say it’s another half million dollars for just one of Maryland’s 24 major political jurisdictions.  Calculating the impact on the Free State’s 157 municipalities will add to the total—whatever it is.

The bill is scheduled to be heard before the Senate Finance Committee on February 3rd at 1 PM.  It is our hope that Maryland businesses will let elected officials know how the proposed legislation might impact their bottom line.

The recent election seems to indicate we cannot burden either business or government with more mandates that cost business—and all of Maryland’s taxpayers—more of their hard-earned money.

Walt Townshend is President/CEO of the Baltimore Washington Corridor Chamber (BWCC).

Christine V. Walters, JD, MAS, SHRM-SCP, SPHR is an Independent Consultant & Author and a member of the BWCC’s Legislative Committee

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