Issue: # 123

June 1, 2015

Takes effect July 1st
Click on picture above to watch a video

Dear :

The new Massachusetts Sick Leave Law takes effect July 1st, 2015. Are you ready?

Employers have a few choices. They can reach out to their payroll companies which are equipped to track hours earned. Some companies charge a nominal fee, while some do not charge extra for this service.

Rather than go through the accruing and tracking of hours process, you can simply front load, or just provide the 5 days up front. We have been working on a Sick Leave Policy that is in compliance with the new law and does not require tracking hours!

The plan highlights are:

1) The Sick Pay Plan year runs from July 1st through June 30th.
2) Provides 40 hours of sick pay on July 1, which can be used after 90 days of employment.
3) There is no carryover of sick hours from one year to the next.
4) If employer has 11 or more employees, these sick hours must be paid. Employers with 10 or less employees are not required to pay for the sick leave taken.

If you would like have a copy of this Sick Leave Policy to adopt and be in compliance without having to track hours, please send us an e-mail , Remember this law applies to ALL employees, no matter the employee size.

If you currently have a Sick Leave Policy, you may qualify for the "Safe Harbor" this short plan year and then could adopt our plan January 1st, 2016. You would then have a calendar year plan year (read below).

Employers with no current Sick Leave Policy need to act now. You can adopt the plan we are suggesting, if not you will then have to follow the plan as laid out in the new law.

Please note that we will be sending more newsletters out weekly as we learn any new items!

Thanks

Bill Randell CLU ChFC
Vanessa Costa CLU ChFC

Importance of plan year being July through June

If you do not define your own 12 month period/plan year, you will follow the state law. Since this law goes into effect July of 2015, the first year (transition year) will be a short year plan (July - December). A full-time employee will earn almost 35 hours (26 weeks times 40 hours divided by 30 hours equals 34.667) under the new law.

When second plan year starts January 1st, 2016, begins, the employee starts accumulating hours again. That same employee would be able to earn another 34.667 hours next year between January and June. In total, an employer could end up paying out nearly 69 hours in sick pay between July of 2015 and June of 2016 following the Massachusetts Sick Leave Law.

By adopting our Sick Leave Policy:

1) The most an employee can accumulate between June through next July is 40 hours.

2) You not have track hours since we are provided the 5 sick days up front.

Vacation and other paid time off plans

Employers are revisiting any other Paid Time Off (PTO) policies currently in force. In essence this new law is giving 5 additional days with pay. SO, in some cases employers may want to make adjustments elsewhere. This would include changing the number of paid holidays, floating days, and even vacation formulas.

Bottom line- Review all PTO plans when you adopt or amend a Sick Leave Policy.

Click to watch video.

Do you have a lot of part time employees?

If you do then it may make sense to track hours, especially if you are a seasonal employer. Lets give the example of an ice cream stand that hires part-time help working 20 hours per week for 13 weeks.

First, they would not be able to use sick days until they have worked 90 days, but they do not have to be consecutive; for example, if the employee works 90 days this year, they do not have to work 90 days again next summer. They only need to meet the 90 days once and any unused hours carry forward for one year.

More importantly an employee working 20 hours for 13 weeks would only earn 8.67 hours (20 hours times 13 divided by 30) not the 40 hours we have under our sick pay plan. Although this may be more work for the employer, if you have alot of seasonal or part time workers, you may actually want to follow the Massachusetts Sick Leave Law and track the hours.

What do we mean by part-timer? Employees working 24 hours per week will max out (40 hours) under the Massachusetts Sick Leave Law. Only if you have alot of employees working under 24 hour per week, you may also want to consider tracking hours and not our Sick Pay Plan.

Safe Harbor for Existing Paid Time Off Plans

Link to press release from Attorney Generals Office. Since this is a short year (July-December) or transition year, the AG has ruled that if you have a current Sick Leave Policy which provides at least 30 hours, you do not have to do anything this year (2015).    Effective Janaury 1st, 2016, however, you need to be in compliance with the new State Sick Leave Law.

If you want help to determine if you meet Safe Harbor, we can review your current plans and make a determination. Send us an e-mail.