ELA member attorneys Anne M. Carroll of Michael Best & Friedrich LLP and Mary Ellen Simonson of Lewis Roca Rothgerber LLP explored the issue of sick leave laws on InsideCounsel, delving into their respective home states of Wisconsin and Arizona and offering some thoughts on this national trend and what employers might see in the future. The full article can be accessed on InsideCounel's website by clicking here. Text is below.

Sick Leave Law: The View from Wisconsin and Arizona

The result of this local concentration on the issue of paid sick leave is a diverse patchwork of rules

Whether employers should be required to provide paid sick leave to their employees has been a highly publicized, and polarizing, issue in recent years. While proponents of mandatory paid sick leave focus on the benefit to employees of not losing pay due to illness, many employers argue that the costs of such measures are simply too high. Currently, there is no federal law mandating paid sick leave time for workers. Although employers subject to the Family and Medical Leave Act (FMLA) must provide eligible employees with leave for certain medical situations, FMLA leave is unpaid, and employees are not eligible unless they work for an employer with at least 50 employees; have worked for this employer for one year; and have satisfied an hours-worked requirement.

In the absence of any federal law, recent efforts to pass legislation obligating employers to provide paid sick leave have been concentrated at the local level. In 2007, San Francisco became the first city to mandate paid sick leave, followed thereafter by 10 others, including Washington, D.C.; Seattle; Portland, Ore.; New York City; San Diego; and Jersey City, N.J. In 2011, Connecticut became the first state to enact paid sick leave legislation, and in 2014, California became the second state to pass a mandatory, statewide paid sick leave law. Although California employers are required to provide a minimum amount of paid sick leave, the law does not require them to allow employees to cash out unused sick leave upon resignation or termination. Additional states could soon join the ranks. New Jersey’s assembly is considering a paid sick leave law, and voters in Massachusetts will weigh in on the matter in a November referendum.   

The result of this local concentration on the issue of paid sick leave is a diverse patchwork of rules. This article focuses specifically on the status of paid sick leave laws statewide in Arizona and Wisconsin, as well as efforts at the state level in these jurisdictions to preempt local municipalities from obligating employers to provide their employees with paid sick leave.

Sick leave in Wisconsin and Arizona

There is no Wisconsin law that requires employers to provide employees with paid sick leave. However, Wisconsin’s response to recent local efforts to enact mandatory paid sick leave ordinances provides a good case study of activities in other states.  

In a November 2008 referendum, voters in Milwaukee approved a mandatory paid sick leave law which would have required businesses in the city with at least 10 employees to allow workers to accrue up to nine days of paid sick leave per year. Employers with fewer than 10 employees would have been required to provide employees with at least five paid sick days. The law attracted immediate opposition from employers and business groups and was challenged in the courts. Subsequently, in May 2011 the Wisconsin legislature passed a law which nullified the Milwaukee ordinance and prohibited future local ordinances requiring businesses to provide paid sick leave to employees.

Wisconsin’s law forbidding local jurisdictions from enacting paid sick leave ordinances is hardly unique. Similar preemption laws depriving local municipalities of the authority to pass paid sick leave laws have been passed in a number of other states in recent years, including Georgia, Louisiana, North Carolina, Tennessee, Mississippi, Kansas, Indiana, Florida and Arizona. As the topic of paid sick leave continues to take center stage in municipalities across the country, preemptive measures are also on the legislative agenda in several other states. 

Similar to Wisconsin, Arizona does not require employers to provide employees with paid sick leave. However, there has been some movement toward creating a statewide paid sick leave law.

In 2014, Arizona’s Sick and Safe Time Act, H.B. 2585, was introduced in the Arizona house. As proposed, the bill would have required private Arizona employers to allow employees to accrue one hour of paid sick leave for every 30 hours worked, up to 72 hours in a calendar year. Although held in committees, the bill reflects a trend toward establishing many of the same protections contained in laws proposed or enacted in other states and municipalities.

Patchwork of ordinances

Many of the states that have passed laws preempting mandatory paid sick leave have been persuaded by the argument made by businesses that patchwork legislation stifles job creation and economic opportunity by placing extra administrative burdens on employers doing business in municipalities with paid sick leave laws. Employers operating in jurisdictions where paid sick leave laws have been enacted will need to revise their existing sick leave policies to conform with these new laws. This may make it impossible – if not impractical – for some employers to have a single sick leave policy that applies to all employees.  Further, many of the laws will require employers to track hours of paid sick leave taken by employees, rather than permit employers to measure sick time in days.  

Opponents of paid sick leave also point out that it is not clear how the emerging laws will interact with other leave and attendance laws. For example, it is not clear whether time off under local paid sick leave laws run concurrently with time off under other leave laws, and many of the local ordinances do not address this important integration issue. Further, in many of the municipalities that have passed paid sick leave ordinances, enforcement has been assigned to local agencies that do not have prior experience dealing with employer-employee relations. This could be a prescription for new headaches for employers when responding to inevitable complaints over enforcement of laws. 

Update and tips for in-house counsel

Although much of the dispute surrounding sick leave laws centers around their potential impact on business bottom lines, preliminary research tends to show that these laws have had a less-than-expected financial impact. However, the financial ramifications and trends are still mixed. Some employers, for example in New York, have simply reduced paid vacation time to compensate. Others have combined personal, sick, and vacation time into one personal time off (PTO) package with the effect that employees actually get less leave overall than they had before the law.

Aside from their financial impact, these laws have presented or presumably will present other issues. For example, some employers have found it difficult to calculate sick leave hours for employees who split time between locations. To address this concern, some employers have adopted software that specifically tracks sick time employees accrue and use.

As these issues evolve, it is important for employers and in-house counsel to track piecemeal legislation, especially if the employer has multiple offices/locations so that policies can be timely updated.  The more traditional ways are to track legal developments themselves or watch for client alerts from outside counsel, but these options can be costly, time-consuming, and hit-and-miss. A speedier, cost-effective option is to set up online news alerts, such as Google Alerts, targeting keywords such as “paid sick leave law.”  

The patchwork of laws both on a state and local level presents real challenges to businesses and may be a precursor to future local level efforts to create new areas of employee rights and potential causes of action.