News & Publications

Seattle Paid Sick and Safe Leave Ordinance to Take Effect on September 1, 2012

Submitted By Firm: Miller Nash LLP

Contact(s): Michael Porter, Susan Stahlfeld

Author(s):

Ian Messerle

Date Published: 8/3/2012

Article Type: Legal Update

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The Seattle Sick and Safe Leave Ordinance affects every private sector1 employer with at least five full time equivalent employees (“FTEs”) if any one of those employees works within the Seattle city limits.

Affected employers must provide paid sick and safe leave to all eligible employees. The amount of annual paid sick and safe leave an employee may take depends on the employer’s size and the number of hours the employee works within the Seattle city limits.

This News You Can Use Miller Nash article contains a recommendation at the end that employers consider Personal Time Off policies to minimize the expense and administrative burdens the Ordinance imposes.

Which employers are covered by the Ordinance?

The Ordinance applies to all private sector employers with employees who work within the city limits of Seattle. Employees of federal, state, county, and other municipal governments—with the exception of the City of Seattle—are exempt. The employer itself need not be located within the city limits for the Ordinance to apply. The Ordinance applies if the employer is otherwise covered and has at least one employee who works 240 or more hours within the city limits in one year.

Employers with four or fewer FTEs are exempt.

Employers with 249 or fewer FTEs are exempt from the Ordinance until 24 months after the date of hire of their first employee.

What type of leave is provided?

The Ordinance provides for both paid “sick” and “safe” leave. Paid sick time is to be provided when an employee is absent because of a physical or mental illness, injury, or other health condition, or to allow the employee to seek diagnosis, care, or treatment of a physical or mental illness or other health condition, or to seek preventive medical care. The Ordinance does not further define these conditions. Also, the Ordinance provides paid sick leave for an employee to care for or arrange for the care or diagnosis of a family member with a mental or physical illness, injury, or other health condition. A “family member” is given the definition found in RCW 49.76.020 and includes domestic partners, former spouses, persons with a child in common, adult persons who have resided together in the past, adult persons related by blood or marriage, and stepparents and stepchildren, among others.

“Safe” time allows paid leave when the employee’s place of business or an employee’s child’s school or place of care has been closed by public officials “to limit exposure to an infectious agent, biological toxin or hazardous material.”  School or work closures for inclement weather are not otherwise covered by the Ordinance. Paid safe time is also allowed for reasons relating to domestic violence, sexual assault, or stalking, as set forth in RCW 49.76.030, such as enabling an employee to assist law enforcement or seek treatment, or enabling an employee to help a family member do the same.

How much leave does the Ordinance provide to an employee?

An employee’s leave entitlement depends on the employer’s size and the amount of hours worked within the City of Seattle by the employee. The Ordinance divides covered employers into three tiers. Tier One employers are those with more than 4 but fewer than 50 FTEs. Tier Two employers have at least 50 but fewer than 250 FTEs, and Tier Three employers have 250 or more FTEs.

The tiers have different rates of accrual and different annual maximums that restrict use and carryover. Employees of Tier One and Tier Two employers accrue 1 hour of paid leave for every 40 hours worked in Seattle. A Tier One employer may cap use of annual leave and carryover of unused annual leave at 40 hours. A Tier Two employer may cap use of annual leave and carryover of unused annual leave at 56 hours. Employees of Tier Three employers accrue 1 hour of paid leave for every 30 hours worked in Seattle. A Tier Three employer may cap use of annual leave and carryover of unused annual leave at 72 hours.2

 

 Tier Employer Size by FTE  Rate of Accrual Caps on Annual Use
and Carryover 
 One More than 4 FTEs but fewer than
50 FTEs
1 hour/40 hours worked 40 hours
 Two At least 50 FTEs but fewer than   250 FTEs 1 hour/40 hours worked 56 hours
 Three       250 or more FTEs 1 hour/30 hours worked 72 hours, or 108 hours for PTO plans

How is an employer’s size determined for tiering?

Size is determined by finding the average number of FTEs paid per calendar week for the preceding calendar year for any and all weeks in which at least one employee worked.

All compensated hours worked by employees should be counted in determining the number of FTEs. An FTE is “the number of hours worked for compensation that adds up to one full-time employee.”  “One full-time employee” is considered to work a 40 hour work week unless the employer determines that a full work week is less than 40 hours. The calculation includes work by all the employer’s employees, whether they performed that work in Seattle or not. The calculation also includes hours worked by temporary services or staffing agencies. Paid or unpaid leave taken is not included in hours worked for compensation. All hours worked by non exempt employees are included. Exempt employees are deemed to work 40 hours per week unless they work part-time, in which case they are deemed to work the number of hours that their normal part-time workweek entails.

So an employer with 100 FTEs is a Tier Two employer under the Ordinance even if 99 of those employees work outside of Seattle.

The regulations accompanying the Ordinance contain an “enterprise rule” that clarifies when separate but related organizations are considered to be one “employer” for tiering purposes. The test is the extent to which the larger entity has control over the smaller entity.

When does leave begin to accrue, and how soon may an employee take accrued leave?

Employees begin to accrue on the later of September 1, 2012, or the commencement of their employment.

Employees may begin using accrued leave on the 180th day after commencing employment. The 180 day look-back relates to the commencement of employment, not September 1, 2012. In the case of employees who only occasionally work in Seattle, these employees begin accruing leave only once they have worked more than 240 hours in Seattle.

Employers may front load the provision of leave to allow employees to take leave before they would have otherwise accrued it.

Must employers cash out unused leave upon termination of employment?

The Ordinance does not require employers to compensate employees for accrued but unused leave. But those employers that already have policies to cash out employees for unused leave should be aware that the Ordinance may result in employees’ accruing and carrying over greater amounts of leave. Employers can avoid cash out liability by carefully revising their policies. Legal advice is recommended when making these revisions.

Do employees accrue leave for work not performed in Seattle?

Employees accrue leave only for work performed in Seattle. Employees who work some of the time in Seattle and some of the time outside Seattle accrue leave only for the hours worked in Seattle.

How does the Ordinance apply to employees who telecommute?

If the employee is telecommuting from a location outside Seattle, the employee does not accrue leave for those hours, even if the employer is located in Seattle. If the employee is telecommuting from Seattle, the employee accrues leave for the hours spent telecommuting.

How does the Ordinance apply to employees who typically work outside of Seattle but perform occasional work in Seattle?

Employees who work occasionally in Seattle but typically work outside of Seattle are covered by the Ordinance once they have worked more than 240 hours in Seattle in a calendar year. As soon as the employee works more than 240 hours, that employee begins to accrue leave. The employee is then covered for the remainder of that calendar year as well as the following calendar year.

For these purposes, traveling through Seattle and making incidental stops—such as stopping for gas—is not considered “work in Seattle” that would count toward the 240 hour threshold or accrue leave. But when an employee travels to Seattle and makes a stop for work purposes—such as a delivery or a sales call—the employee’s travel time within Seattle is counted. Time spent traveling through the city without stopping is not covered.

How does the Ordinance treat temporary (“leased”) employees?

Except for purposes of determining an employer’s tier, leased employees are considered employees of the staffing agency. The leased employee is considered an employee of both the contracting employer and the staffing agency for determining their respective tiers.

May employers comply with the Ordinance by using PTO plans?

As long as a PTO plan ensures that an employee can take, accrue, and carry over the leave required by the Ordinance, the plan will comply with the Ordinance. But in the case of Tier Three employers, the PTO plan must allow employees to accrue and carry over at least 108 hours (instead of 72) of leave. The Ordinance still only requires that employees be able to take a minimum of 72 hours of leave in a year.

If an employee uses all of her or his PTO for vacation, the employer need not provide the employee with additional paid days off if the employee takes leave that would otherwise qualify as sick and safe leave. The employer may, however, provide unpaid leave.

At what rate are employees paid for sick and safe leave?

The general rule is that employees using accrued sick and safe leave are to be paid the same hourly rate as they would have earned during the time the paid leave is taken. The employer is not obligated by the Ordinance to compensate employees for lost tips or commissions. In the case of commission-only or piece-rate employees, the hourly rate of pay is their base wage or the minimum wage, whichever is higher.

May employees waive the Ordinance provisions through the collective bargaining process?

Employees covered by a collective bargaining agreement may waive the Ordinance provisions only by an express waiver that is “clear and unambiguous” and explicitly refers to the Ordinance. The waiver must be included in the collective bargaining agreement itself as a provision within the agreement or as a separate addendum to the agreement. Employees may not waive the Ordinance provisions individually.

What are an employer’s notification responsibilities?

Employers have two basic notification obligations:  they must notify employees about the Ordinance generally and they must provide employees with the employees’ updated leave balances whenever wages are paid.

Employers must notify employees of their entitlement to paid sick and safe leave, of the amount of the entitlement and terms of its use, that retaliation against employees who request sick and safe leave is prohibited, and that an employee has legal recourse if the employer unlawfully denies sick and safe leave or retaliates against the employee. There are a number of ways to comply with this:  by posting a notification poster (to be made available by the City of Seattle) in conspicuous places in the workplace or by including the notification in employee handbooks or similar written guidance, whether in paper or electronic form.

Whenever the employer pays wages, the employer must notify each employee of her or his updated available amount of sick and safe leave.

What documentation may an employer require of an employee?

If an employee uses sick leave of more than three consecutive days, the employer may request written documentation from a health care provider that the sick leave was necessary. The employer may not request that the documentation explain the nature of the illness or condition, unless necessary to comply with applicable law (for example, if leave is also being taken under FMLA). The employer may require similar documentation for safe leave usage exceeding three consecutive days.

How much notification must an employee taking leave provide to an employer?

An employer may require “reasonable” written notice of up to ten days in advance of foreseeable leave. In the case of unforeseeable leave, the employer may require the employee to provide notice as soon as is practicable.

The notification need not explicitly refer to the Ordinance or use the words “safe time” or “sick time.” 

What records must an employer maintain?

Employers must retain records for two years that indicate employee hours worked, accrued leave, and used leave.

How is the Ordinance enforced?

The Seattle Office for Civil Rights investigates and enforces alleged violations of the Ordinance. Charges must be filed with the office within 180 days of the alleged violation. Additionally, the City has taken the position that employees can bring their own civil action in court.

Conclusion

The Ordinance imposes a number of obligations on employers, but these impositions may be mitigated by implementing PTO policies. In the case of Tier One and Tier Two employers, using PTO policies means that employers can comply with the Ordinance by allowing employees 5 and 7 days, respectively, of annual leave. There are additional requirements for Tier Three employers, but they may also benefit from a PTO policy if they already have policies allowing for paid vacation and/or sick time.

____________________________________________

1 City of Seattle employees are covered by the Ordinance as well.

2 But if the leave is part of a Personal Time Off (“PTO”) plan, Tier Three employers may cap annual use and carryover at 108 hours.

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