Complying with New Paid Sick Leave Laws

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Managing the Risk

Philippe Boucher is one example of a new generation of worker activists. A longtime contingent worker at Microsoft’s Redmond, Washington headquarters, he joined with 33 other contractors to create a union called the Temporary Workers of America. But perhaps more importantly, he launched a blog, wrote a self-published book, and engaged in other social media activities to highlight differences in how that company’s contingent workers were treated compared with employees.

Not long after Boucher’s social media posts garnered national attention, Microsoft announced in March that all suppliers with more than 50 employees would be required to provide workers with 15 days of paid leave per year. “We concluded that this is the right step for our business,” blogged Greg Smith, Microsoft’s general counsel.

It’s a large-scale example of something that is happening across corporate America. Companies are beginning to see connections between paid leave for contingent workers and improved workforce productivity. At the same time, activists are pushing for paid sick leave, and voters and legislators in local jurisdictions are passing laws requiring it. These converging trends mean that more contingent workers now enjoy a significant amount of paid time off.

New state and local requirements

On the regulatory front, California, Massachusetts, and Philadelphia recently passed new laws mandating paid sick leave for most employees, joining the state of Connecticut and 15 cities that have enacted such laws in recent years. Now that two large states with technology-heavy economies have joined the list of jurisdictions with such laws, more employers and suppliers across the country are impacted in a big way.

For the first time, many contingent workers now enjoy a significant amount of paid time off—especially sick leave.

The various state and local laws differ in the ways employers are affected, how much sick leave is required, and how it accrues for the employee. With this patchwork of requirements, the challenge for employers is to figure out what is required—and where. This complexity will remain unless and until Congress passes a single national standard.

Finding the best way to comply

In the meantime, companies need to assess compliance and change corporate policies as needed. They will need to update their processes to avoid accidental noncompliance, while deploying technology that enables sick leave to be tracked—something that is not yet included in many vendor management systems (VMS). This tracking needs to extend across all employers of record—the supplier, the managed service provider (MSP), and the buyer.

With this patchwork of requirements, the challenge for employers is to figure out what is required—and where.

Even if they already offer a paid sick leave benefit for employees, companies will likely need to make adjustments to that policy to align with these new state and local laws. Some companies may decide to apply the most stringent of the local standards to employees across the board, simplifying policies and potentially generating positive media coverage for the brand. Others will opt to minimize costs by having different standards at different locations.

Firms that depend on contingent labor will need to take extra care to ensure compliance for those workers, working with suppliers and/or their managed services provider (MSP) to make sure correct standards are in place. As always, the PRO Unlimited team has done extensive analysis on these new requirements and is ready to help you with both strategy and execution.

For more details on new state and local paid sick leave laws—and their implications on your business—read our Fact Sheet, “Mandatory Paid Sick Leave Spreads to California, Massachusetts, and Philadelphia.”

James Cahalan is the director of Global Compliance at PRO Unlimited and has written extensively on the topic of employment law.

The content in this blog post is for informational purposes only and cannot be construed as specific legal advice or as a substitute for legal advice. The blog post reflects the opinion of PRO Unlimited and is not to be construed as legal solutions and positions. Contact an attorney for specific advice and guidance for specific issues or questions.

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