Your Current PTO Policy…Gone

Under the dictates of the 7-page ordinance there is a statement that “An employer with a paid leave policy that meets or exceeds the requirements of this Ordinance is not required to provide additional paid sick leave or in any way reduce benefits provided to employees.” However…the devil is in the details…

Most employers’ existing paid time off policies will not be in compliance with the strict requirements of the Ordinance.

According to the Rodey Law Firm Employment Law Division, “One of the most misunderstood issues is whether employers with Paid Time Off (“PTO”) policies will have to change them to comply with the ordinance. Supporters of the ordinance contend that most employers will not have to change their PTO policies. That is highly misleading. Unless an employer’s current PTO policy complies in every respect with the ordinance, the policy will have to be changed.

For example, if an employer’s current policy requires an employee to work for 30, 60, or 90 days before he or she begins accruing leave, the policy will need to be changed to provide for immediate (“day one”) accrual of sick leave. If an employer’s current policy does not allow for leave to carry over from year to year, the policy will need to be changed. If an employer’s policy requires an employee to provide documentation of sick leave absences of fewer than three consecutive days, the policy will need to be changed. If an employer’s policy does not provide for the employer’s paying all “out of pocket” expenses for obtaining documentation of the employee’s reason for being absent for three or more consecutive days, the policy will need to be changed.

Finally, PTO policies that allow employees to determine for themselves whether to use time for sickness or vacation could put employers at risk. If employees exhaust PTO on vacation early in the year and do not have additional “sick leave” accrued and available in accordance with the ordinance when they become ill later in the year, it is likely that a court would determine that the employer did not comply with the ordinance. We have reviewed many leave policies over the years, and we expect that almost every policy will need to be modified to comply with the ordinance.”

They stress “Don’t assume your business is exempt — even if an employer has a paid time off policy, it almost certainly will be affected by the burdens and compliance costs of this ordinance.”

An analysis done by Alice Kilborn of Kilborn HR Consulting found the following:

Compliant paid time off policies would need to:

  • Track and report how each and every hour of paid leave was used (whether for sickness or another allowable reason under the proposed Ordinance, or whether the time off was used for a reason not covered by the Ordinance, such as vacation and family events). Employers would be required to maintain payroll records for each employee showing the weekly hours worked, wages paid, and the amount of paid sick time accrued and/or used each pay period;
  • Accrue paid leave beginning the first day of employment;
  • Allow employees to use accrued paid leave no later than 90 days after the start of employment;
  • Allow employees who leave the organization and are rehired within 12 months to access previously accrued and unused paid leave; and
  • Permit employees to carry over unused paid sick leave hours to the following year. There is no indication within the Ordinance that these rolled-over accruals cannot continue to build year-upon-year. As a result, employees who are rarely ill could end up carrying a large amount of accrued paid sick leave (which is often a logistical, accounting, and record keeping nightmare);
  • Provide to each and every eligible employee (including part-time, seasonal, and temporary employees who work at least 56 hours in the year within the City) at least one hour of paid sick leave accrual for every 30 hours worked.

If your PTO policy does not include these dictates then kiss it goodbye!