Vermont Earned Sick Time Law: PSL-4Step Analysis

The Vermont Earned Sick Time law was enacted in March 2016. The Vermont Commissioner of Labor has issued “sick time rules” to “clarify practices and policies in the administration and enforcement” of the law. Here, I analyze the law and rules using the PSL-4Step framework.

Step 1: Does it apply?

Effective Date:  January 1, 2017, except that the law does not apply to an employer with five or fewer employees who are employed for an average of no less than 30 hours per week during the previous calendar year, i.e., a small employer, until January 1, 2018. A “new employer” is not subject to the law until one year after the employer hires its first employee. The effective date of the DOL’s rules is January 15, 2017.

Employer Definition: “Employer” includes every type of business entity and any common carrier by rail, motor, water, air or express company doing business or operating with Vermont.

Employee Definition: “Employee” means any person employed by an employer for an average of at least 18 hours per week during a year.  “Employee” does not include

federal employees;

state employees who are either exempt or excluded from the State classified service but not an individual that is employed by the State in a temporary capacity;

an individual under 18 years of age;

an individual employed for 20 weeks or fewer in a 12-month period in a job scheduled to last 20 weeks or fewer;

an employee who works on a per diem or intermittent basis, i.e., who  works only when he or she is available to work, is under no obligation to work for the employer offering the work, and  has no expectation of continuing employment with the employer;

an employee of a “health care facility” or “facility” if the employee only works on a per diem or intermittent basis;

a sole proprietor or partner owner of an unincorporated business who is excluded from the provisions of chapter 9 of this title  (employer’s liability and workers compensation); or an executive officer, manager, or member of a corporation or a limited liability company for whom the Commissioner has approved an exclusion from the provisions of chapter 9 of this title;

an employee of a school district, supervisory district, or supervisory union employed pursuant to a policy on substitute educators who is under no obligation to work a regular schedule and is not under contract or written agreement to provide at least one period of long-term substitute coverage, defined as 30 or more consecutive school days in the same assignment.

Primary Place of Work: An employee whose primary place of work is in Vermont is eligible to accrue and use earned sick time (PSL) under this law, regardless of the employer’s primary location. If an employee’s primary place of work is in Vermont, all of the employee’s hours of work are counted for accrual, regardless of where the work is performed.

 Step 2:  The Benefit

Accrual: One hour of leave for every 52 hours worked, including overtime hours, beginning the first day of employment. An employer may impose a waiting period of up to one year before an employee can use accrued leave (for those employed on January 1, 2017, an employer may require a waiting period that ends no later than December 31, 2017). Between January 1, 2017 and December 31, 2018, an employer may cap use at 24 hours per annual period; this minimum cap increases to 40 hours on January 1, 2019.

NOTE: for small employers, the waiting period must end no later than December 31, 2018.

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Timing of Accrual Calculation:  The amount of accrued sick time shall be calculated as it accrues during each pay period or quarterly, although an employee may use earned sick time as it accrues (assuming the employee is beyond the employer’s waiting period).

Annual Period: A continuous 12 month period beginning with an employee’s first day of work. For current employees, the annual period shall begin January 1. An employer with an existing paid leave year may use that as the annual period so long as any accrued time under this law is carried over into the employer’s fixed paid leave year.

Exempt Employees: Are assumed to work 40 hours weekly for accrual unless the job worked specifies a lower number of hours per week, in which case sick time accrues based upon the specified number of hours per week.

Adjunct Faculty: Those paid on a fee-for-service or per-course basis shall be deemed to work 3 hours for each classroom hour worked.

Rate of Pay: The normal hourly rate, paid on the same schedule and in the same paycheck as regular wages are paid. The normal hourly rate does not include commissions, drawing accounts, bonuses, or other incentive pay based on sales or production, overtime, other items excluded from the “regular hourly rate” under federal law, holiday pay or other premium rates (a differential rate is not a premium rate). The normal hourly rate is:

For hourly paid employees, their hourly rate.

For employees with more than one hourly rate, an employer shall have a “consistent method” to pay either the hourly rate the employee would have been paid during use of earned sick time or a blended rate based on the weighted average over an established period customarily used to make that determination.

For non-exempt salary employees, the normal hourly rate is obtained by dividing the total earnings by the total hours worked during the previous pay period.

For an employee paid on commission, the normal hourly rate is the greater of the base wage or the state minimum wage.

For employees paid the state tipped wage rate, the normal hourly rate is the non-tipped state minimum wage.

In all cases, an employee may not “interrupt insurance benefits” during the use of earned sick time.

 Unused Hours: Shall be carried over to the following annual period, subject to the use limitations described in “Accrual” section above, except that an employer may pay an employee for unused earned sick time at the end of the annual period, in which case, the unused hours do not carry over into the subsequent annual period.

Alternatives to Accrual: An employer may frontload leave hours at the beginning of each annual period. Carryover of unused hours does not apply where an employer frontloads leave hours.

Uses of PSL: An employee may use earned sick time for an absence from work for the following reasons although an employer may adopt a policy requiring an employee to use earned sick time for an absence from work for:

Employee’s or family member’s illness, injury or medical condition (including homecare, diagnosis, care or treatment) or preventative, routine or therapeutic health treatment, or to accompany the employee’s parent, grandparent, spouse, or parent-in-law to an appointment related to his or her long-term care. “Routine” treatment includes round trip travel to an appointment, a pharmacy, or other location related to the purpose for which the time was taken.

When employee’s workplace, or a family member’s school or business (including a care facility) where that individual is normally located during the employee’s workday is closed for public health or safety reasons.

Reasons relating to domestic violence, sexual assault or stalking, including arranging for social or legal services or obtaining medical care or counseling for employee or family member.

Minimum Increments of Use: Smallest time increments the employer’s payroll system uses or that the employer’s paid time off policy permits, except that employers may limit minimum use to one hour and “shall not be required to track accrual balances in increments of less than one hour.”

Step 3: Common Clauses

Family Member: Parent, grandparent, spouse, child, brother, sister, parent-in-law, grandchild or foster child.  A “child” includes a minor or adult son or daughter by birth or adoption. A “foster child” includes a foster child, a stepchild, a legal ward, or a child for whom an employee has assumed the responsibilities of parenthood, and a child of an employee standing in loco parentis.

Notice Requirements: An employer may require that an employee make “reasonable efforts” to schedule routine or preventive health care during non-work hours and to notify the employer as soon as practicable of the intent to take earned sick time and the expected duration of the employee’s absence.

Employee notice:

An employer may require an employee to provide reasonable notice before using earned sick time.

Notice for unforeseeable absences is what is reasonable under the circumstances, recognizing that advance notice might not be feasible in some circumstances.

For multi-day absences, an employer may require notice of the expected duration of the leave from the employee or employee’s surrogate, unless providing such notice is impracticable.

An employer may require an employee to give notice in a manner an employee customarily uses to communicate with the employer for reporting absences or requesting leave.

An employee required to give notice shall specify that he or she is using earned sick time.

Employer notice:

Post in a conspicuous place at the worksite notice of the law’s provisions in a form provided by the Commissioner of Labor (link is on resource page).

Notify a new employee of the provisions of the Act upon hire.

Documentation to Support Need for PSL: An employer may require an employee to provide “reasonable proof” that the use of earned sick time is for a purpose allowed by the law.

Ban on Replacement Requirement: An employer cannot require employee to find a replacement for the employee’s absence.

Shift-Swapping: An employer may allow shift-swapping during the same pay period.

Make up Time: An employee and employer may agree the employee will work additional hours during the same pay period to avoid use of earned sick time. An employer cannot require an employee to work make up time.

Termination of Employment: An employer may pay an employee for unused earned sick time when the employee leaves employment.

Rehire:

An employee who voluntarily separates from employment after completing the waiting period and is rehired within 12 months shall not be entitled to use previously accrued sick time and may be required to begin a new waiting period unless waived by the employer.

An employee discharged (a termination of employment initiated by the employer) prior to completing the waiting period and rehired within 12 months after the discharge shall have the same time remaining in the waiting period as on the date of discharge.

An employee discharged after completion of the waiting period and rehired within 12 months after discharge shall begin to accrue and may use earned sick time without a waiting period. However, the employee is not entitled to retain any earned sick time that accrued before the discharge unless agreed to by the employer.

An employee who voluntarily separates from employment without good cause attributable to the employer shall forfeit all accrued earned sick time and any accrued earned sick time shall not transfer if the employee is subsequently hired by another employer. (NOTE: this line comes from the rules. I am seeking clarification of its meaning.)

Relationship to Other Employer Sick Time Policies:  An employer that provides paid time off (whether vacation, personal, combined time off, annual leave, sick time or any similar type of leave) in amounts consistent with the law, for the same purposes, under the same conditions, and with the same job protections provided in the law, shall not be required to provide additional sick time to an employee. In other words, if an employer’s policies already provide everything required in the law, an employer need not provide a second helping of sick time.

More Generous Policies: The law does not prevent an employer from providing a paid time off policy within a labor contract or otherwise that provides a more generous paid time off policy than provided by this law.

Relationship to Other Laws/Agreements: Accrued time may be used at the same time as time off under the Vermont Parental and Family Leave Act. An employee may choose to use earned sick time to receive pay when taking leave under the VPFL that would otherwise be unpaid. The law does not diminish an employer’s obligation to comply with any labor contract or paid time off policy that provides greater earned sick time rights than the rights provided by the law. A collective bargaining agreement or paid time off policy may not diminish the rights provided by the law.

Employer Prohibitions: An employer may not discharge or otherwise retaliate against any employee because the employee “lodged a complaint” of a violation; cooperated with the Commissioner in an investigation of a violation; or because the employer believed that the employee may lodge a complaint or cooperate in an investigation of a violation of the law. An employer may not transfer an employee to a second related employer for the purpose of either employer claiming an exemption from this law.

Payroll Records: Employers must maintain records showing information relating to accrual and use of earned sick time for three years and shall provide copies within 10 days upon demand by the Commissioner. An employee who requests his or her records shall be provided with a copy within 5 days and shall be allowed to inspect the original paper or electronic records at a reasonable time and place.

Enforcement: The Vermont Commissioner of Labor shall investigate any complaints of and enforce this law. In addition to recovering the earned sick leave pay, the Commissioner may assess a civil penalty of up to $5,000 per violation.

 Step 4: Unique Provisions.

Requiring an employee to make “reasonable efforts” to schedule routine or preventive care during non-work time is unique and makes great sense. This is a concept borrowed from the federal FMLA.

Allowing an employer to require an employee to wait up to a year before using accrued PSL is much longer than any waiting period allowed by any other PSL law.

© Michael J. Soltis