In November 2016, Washington voters approved Initiative 1433, raising the state’s minimum wage over the next four years starting Jan. 1, 2017.

Initiative 1433’s other major component requires employers statewide to provide employees paid sick and safe leave by Jan. 1, 2018.

Even for employers familiar with similar local paid leave laws, the state leave mandate imposes differing and often more stringent restrictions. Employers must act quickly to ensure their policies and practices comply by the start of the new year.

Initiative 1433 and its PSSL provisions amend the existing Washington Minimum Wage Act, including incorporating the act’s definitions of employer and employee.

As a result, the state leave mandate applies broadly to nearly all employers as well as employees entitled to receive minimum wages under the act.

Notably, employees properly classified as exempt from the act’s minimum wage requirements, such as so-called white-collar exempt employees, aren’t covered by I-1433’s leave provisions. Otherwise, hourly or other nonexempt employees are covered and entitled to sick and safe leave, with few limited exceptions that won’t apply to most employees.

Under the new state law, employees are entitled to accrue at least one hour of PSSL leave for every 40 hours worked. An employee is considered “working,” and therefore accruing PSSL, by using existing wage and hour standards.

For example, employees accrue leave while working overtime hours, but an employer isn’t required to accrue PSSL while an employee is on vacation or using leave. Current employees must begin accruing PSSL leave beginning Jan. 1, 2018; new employees hired after that date must begin accruing leave the first day of employment. Though accrual starts immediately, employers can require new employees to wait 90 days after employment starts to use accrued leave. 

Unlike many similar laws, Washington’s PSSL law doesn’t allow employers to cap accrual or use of leave, meaning an employee can essentially use as much leave as he or she earns. Employers must also carryover an employee’s earned but unused PSSL into the following year, but may cap the carryover amount to 40 unused hours. An employee would then begin accruing additional PSSL on top of any carried-over amount.

Employers may advance or “frontload” PSSL leave based on an estimate of leave the employee would accrue hourly.  Even if frontloaded, employers must still track hours worked and ensure the employee received at least one hour of leave for every 40 hours worked, making up any shortfall promptly. Employers who frontload leave are still required to carryover at least 40 hours of unused PSSL.      

Employees are entitled to use PSSL for the employee’s or the employee’s family member’s mental or physical illness, injury, or health condition, including medical diagnosis, care, or treatment related to the same, in addition to preventive medical care.

The term “family member” is defined more broadly than in some similar and potentially overlapping leave laws, such as the federal Family Medical Leave Act. “Family member” under the state PSSL law includes an employee’s child, regardless of age or dependency status and not limited to biological children; spouse; registered domestic partner; parent, which is not limited to biological parents; parent-in-law, or similar status; grandparent; grandchild; and sibling.

Employees are also entitled to use PSSL for safe-leave purposes, including related to the employee’s or employee’s family member’s status as a victim of domestic violence, sexual assault, or stalking (including for a person the employee is “dating”). Employees also can use PSSL when the employer’s business or the employee’s child’s school or place of care is closed for health-related reasons, not including inclement weather.

Employers are not required to provide bereavement leave.

Under Washington Department of Labor & Industries regulations implementing I-1433, employers must allow employees to take PSSL leave in increments “consistent with the employer’s payroll system and practices.” For example, employers who track hours worked to the quarter hour cannot require employees to take leave in greater than 15-minute increments.  Likewise, employers who track hours worked to the minute may have to provide leave in minute increments.  To require leave in greater increments, the employer must obtain a variance from L&I.

The law also limits when and how an employer can require advance notice and verification that the employee is using PSSL for authorized purposes. For foreseeable PSSL use, an employer cannot require an employee to provide more than 10 days advance notice. For unforeseeable PSSL use, the employee must provide notice as soon as possible before the employee’s shift, unless that’s not practicable.

Employers can only require verification of authorized leave use for absences exceeding three consecutive days an employee is required to work. Any verification requirement, such as a doctor’s note, also can’t result in an unreasonable burden or expense on the employee.

Employers also can’t require that the verification explain the nature of an employee’s condition. However, where PSSL use also is authorized under other federal, state, or local laws that permit employers to make medical inquiries, such as under state or federal disability laws or the Family Medical Leave Act, employers may follow verification requirements under those laws.

Employees must be paid their normal hourly compensation for PSSL use. 

The regulations specify, however, that employers aren’t required to pay overtime rates for PSSL use during hours that would have been overtime hours if worked. Nor is an employer required to include tips, gratuities, service charges, holiday pay, or other premium rates, unless otherwise allowed or required by other agreements.

However, if an employee receives a differential rate, such as for a night shift, that isn’t considered a premium rate and must be accounted for.

Upon separation of employment, an employer isn’t required to pay out remaining unused PSSL, but may choose to do so if the employer and the employee agree in writing to the payout terms. 

If PSSL is not paid out on separation, the employer must reinstate the leave hours of any employee rehired within 12 months.

Under I-1433 and its regulations, employers must timely notify each employee in writing of their right to PSSL, the method and rate at which the employee will earn or accrue PSSL, authorized PSSL uses, and that retaliation for lawful use is illegal.

Additionally, at least monthly in writing, employers must notify each employee of the amount of accrued leave, leave used since the last notification, and available leave. Including this information on the employee’s paystub is the likely easiest way to comply with this requirement.

Regulations also forbid employers from taking otherwise permissive actions absent a prior written policy on the topic.  For example, an employer cannot require advance notice of PSSL use, verification, or frontload leave absent such policies. 

Spokane’s leave law

Spokane employers might be wondering how to reconcile Spokane’s earned sick-and-safe-leave ordinance that took effect Jan. 1, 2017, and the forthcoming state law. The good news is that employers will not have to, because the Spokane City Council agreed to “sunset” the Spokane ordinance once I-1443’s provisions take effect.

But employers shouldn’t assume policies complying with Spokane’s law will comply with I-1433 as the state law has different and more restrictive limits.

I-1433 also has no reprieve for employers engaged in construction work, who were exempt from Spokane’s ordinance, or for employers subject to collective bargaining agreements. Federal contractors and employers with employees who work in Seattle or Tacoma also still have to comply with those federal or local paid sick-leave laws in addition to I-1433.

The state PSSL law forbids employers from disciplining, interfering with, or retaliating against employees who exercise rights under the law. For example, employers cannot count a PSSL absence under “no fault” attendance policies.

For alleged violations, employees may file a complaint with L&I. Under proposed L&I regulations, which are to be finalized next month, penalties could include granting employees’ back pay, access to denied leave hours, and job restoration. Penalties also could include civil fines and other cease-and-desist orders.

Employees, however, aren’t required to go through L&I to resolve Minimum Wage Act-related complaints, including on PSSL, but may file a private suit directly against an employer through existing legal avenues.

Certain violations might also be considered a gross misdemeanor.

Employer next steps

With 2018 fast approaching, employers should review their policies and practices now to ensure timely compliance. Employers shouldn’t assume seemingly more generous paid leave policies suffice given the law’s nuances on various leave aspects.

Employers also should be cautious before relying on “sample” or “form” PSSL policies, including those L&I plans to publish. Proper and effective implementation of a paid leave program often requires individualized review and comprehensive reconciliation with various other aspects of a business, which sample forms likely cannot accomplish. Such forms might also omit other permissive, legally compliant options for employers that would better fit business and workforce needs.

For example, employers who offer combined paid time off should understand potential drawbacks of continuing to commingle sick leave, which is regulated by the PSSL law, with vacation leave, which isn’t. Given increasing legal restrictions on sick leave, it may make sense for an employer to unbundle sick leave from vacation leave to retain more flexibility in structuring vacation leave without PSSL legal constraints.

Finally, employers also should consider how they’ll go about reviewing and updating their paid leave policies, a process that often reveals other potential legal issues. Employers should consider retaining legal counsel experienced in employment law with the benefit of attorney-client privilege and confidentiality to explore such issues and to craft a compliant paid sick-leave program.

Amy M. Mensik is a member of the Labor & Employment Group at the Witherspoon Kelley law firm in Spokane. William M. Symmes serves as the group’s chairman. The group’s webpage is http://www.witherspoonkelley.com/labor-employment.