ANOTHER POTENTIAL STRIKE AGAINST OHIO - COSE On Guard for Small Business
This may not seem to concern your business right now, but it could in the future. Legislation that impacts small businesses impacts all of us. The following information will explain.
Another Potential Strike Against Ohio Small Business for a Better Ohio Tucker Ellis & West LLP
NEW SO-CALLED HEALTHY FAMILIES ACT POSSIBLY EFFECTIVE IN DECEMBER 2008
A proposed new "paid sick leave" statute - deceptively entitled the "Healthy Families Act" will likely appear on the state-wide ballot in November 2008. If the ballot initiative passes, it would become effective 30 days later*. The language in the initiative is vague, leaving room for misinterpretations which will almost certainly result in costly litigation. Below are several things we think you need to know and be thinking about in the event the so-called Healthy Families Act becomes the law in Ohio. Please note, if you make any changes to your benefits package, we suggest contacting your legal counsel and sharing this document with them first.
KEY ASPECTS OF THE "HEALTHY FAMILIES ACT"
Ohio employers with 25 or more employees must provide at least 7 days of paid sick leave each year to employees who work 30 hours per week or more. Employees who work less than 30 hours per week are entitled to accrue sick leave on a pro rata basis. Employees are entitled to accrue sick leave at least monthly. Current employees can use sick leave as soon as they accrue it; new employees can be required to wait 90 days before they begin to use sick leave. Employees can use sick leave for any absence resulting from their own physical or mental illness, injury, or medical condition; obtaining a professional medical diagnosis or medical treatment; or to care for a child, parent, or spouse for one of those reasons.
Employers cannot require advance notice before employees use paid sick leave and cannot require medical certification until the absence covers more than 3 consecutive work days. Employers are not required to modify their leave policies to grant sick leave if they currently have a leave policy that would satisfy all of the requirements of the Act. Employers are prohibited from disciplining, discriminating, and/or retaliating against an employee for any use of sick leave taken pursuant to the Act. Employers cannot modify existing policies to reduce leave to comply with the Act once the Act is enacted.
WHAT CAN AN EMPLOYER DO BEFORE THE ACT BECOMES EFFECTIVE
Employers cannot modify existing policies to reduce leave to comply with the Act once the Act is enacted (30 days after passage of initiative) - changes to leave policies must be made before the Act is enacted or employers risk being prohibited from making the changes.
* Our interpretation is that the enactment date is 30 days after the Act is passed (December 2008). However, some interpretations suggest that the Act will become effective the day of passage (November 4, 2008). Therefore, we urge Employers to make changes prior to November 4, 2008. Employers with at least 25 employees (full-time and/or part-time) should examine leave policies to determine whether they would satisfy the requirements of the Act if it became effective immediately. Language excusing modification of existing leave policies that satisfy the requirements of the Act probably means leave under those policies must be equivalent in all respects (i.e. use and/or restrictions on use.)
Employers with policies that would not comply should modify current leave policies as necessary to achieve compliance with the Act and minimize the impact on the Employer:
%uFFFD Employers with no current paid leave policy (no vacation leave, sick leave, etc.) should create a policy that grants one type of leave - Paid Time Off ("PTO") - with use provisions that allow PTO to be used as sick leave would be used under the Act.
%uFFFD Employers with current paid leave policies that result in accrual of leave at rates that would not satisfy the accrual requirements of the Act should convert all guaranteed annual paid leave (vacation leave, sick leave, etc.) to PTO and modify the accrual provisions so employees who work at least 30 hours per week accrue at least 7 days of PTO per year. Use provisions should allow PTO to be used as sick leave as defined under the Act. Alternatively, an Employer may modify his/her policy to specify that only 7 days of the PTO can be used as sick leave - without advance notice; however, this could create administrative and tracking difficulties for the employer.
%uFFFD Employers with current paid leave policies that result in accrual of leave at rates that will satisfy the accrual requirements of the Act, but that may not satisfy the use requirements of the Act, should convert all guaranteed annual paid leave (vacation leave, sick leave, etc.) to PTO and modify the use provisions so that PTO (or at least 7 days of PTO) can be used as sick leave would be used under the Act.
ONCE THE ACT IS EFFECTIVE HOW MUST AN EMPLOYER TRACK TIME?
- Sick leave would have to accumulate at least monthly and begin accruing upon hire, but employers would not be required to allow use of sick leave during the first 90 days of employment.
- If employees currently begin accruing sick leave only after a probationary period, the employer will need to change its policy so that employees accrue leave sooner.
- Accrual rate must result in accrual of at least 7 days of leave per year. Carry over of unused days from one year to the next must be permitted, although it is probably permissible to limit carry over to 7 days of leave per year if more than 7 days of leave is granted under the policy, and it may be permissible to cap accrual at 7 days of leave if the policy grants only 7 days per year and some leave is carried over.
- Employees must be permitted to use leave in increments of the smallest unit of time tracked bythe employer's payroll system for purposes of tracking absence or in one hour increments whichever is smaller.
Leave must be granted on a verbal request, with no advance notice, and medical certification cannot be required until the leave period exceeds at least 3 consecutive work days. Attendance policies (no-fault or otherwise) must be modified so that time off for paid sick leave under the Act is not counted under the policy. Employers must establish a record keeping mechanism that satisfies the 3 year records retention requirements of the Act.
OTHER LIKELY QUESTIONS:
- What if my company is headquartered in another state?
As long as a company employs at least 25 people in Ohio, the law will apply to the employees
who work in Ohio. Thus, companies might not have consistent leave policies from state to state.
- What if an employee's schedule varies?
If an employee's schedule varies on a weekly basis, a weekly average of hours worked over a 12-week period must be used to calculate the amount of sick leave the employee is entitled to accrue. This means additional paperwork and staff time to track and administer sick leave.
- What is the potential cost to my company?
Calculate for your company 56 hours/year x $____(hourly wae and benefits) x ____(number of employees) Plus worker replacement costsPlus lost productivity.y A 25 employee company with an average wage of $18.98 would be $26,572 per year - every year going forward.
This covers wages only, and does not include benefits, FICA, the costs of replacing workers, or the cost of lost economic output due to workers absence.
For more information please contact Joe Bauer at 216.592.2317 or jbauer@cose.org.
To make a financial contribution to oppose the mandated sick leave initiative, please send a check
or credit card information to:
Small Business for a Better Ohio
c/o Claire Walker, Treasurer
100 Public Square, Suite 210
Cleveland, OH 44113
Individual and Corporate Checks accepted. Contributions or gifts to Small Business for a Better
Ohio are not tax deductible.
