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A new Maryland law requiring most employers in the state to provide paid sick leave for their employees came into effect this week after the state House rejected a Senate effort to delay it until July, CBS Baltimore reported on Wednesday:
While most Maryland employers provide paid sick leave, analysts estimated about 700,000 people didn’t have the benefit which this law will now change. …
It applies to businesses with at least 15 employees, providing one hour of paid sick leave for every 30 hours worked, and businesses with fewer than 15 get unpaid job protective leave, which also applies to part-time workers. … This law requires businesses to provide five days of sick leave for full-time employees. Backers of the policy see it as an overall benefit for both companies and their staff.
Like sick-leave laws passed recently in other jurisdictions like New York City, Maryland’s law also allows employees to use their sick leave entitlement to address matters of domestic violence, such as going to court to obtain protective orders against abusers or dealing with the aftermath of sexual assault.
The US is currently suffering through the worst flu season since 2009, with the highly virulent H3N2 strain, which first emerged in the deadly “Hong Kong flu” pandemic of 1968-69, sending Americans to the hospital in great numbers. Making matters worse is that the flu vaccine this year is only about 30 percent effective against the H3N2 virus, though doctors still recommend that adults get themselves vaccinated.
Between employee absences, lost productivity, and the risk of the disease spreading in the workplace, a harsh flu season is extraordinarily costly to employers. The outplacement consultancy Challenger, Gray & Christmas, which tallies the economic impact of the flu each year, originally estimated that this year’s virus would cost the US $9.4 billion in lost productivity; in a press release issued on Wednesday, Challenger more than doubled that projection to $21.4 billion, based on updated information from the Centers for Disease Control suggesting that approximately 25 million American workers will have caught the flu by the time the season is over.
Challenger also ventured the theory that the open-plan offices adopted by many US organizations in the past decade could be exacerbating the impact of this particularly virulent flu in the workplace:
“The flu season is still going strong and workers continue to fall ill. One potential driver of the spread of the flu could be the open office trend that so many companies implemented in the last decade,” said Andrew Challenger, Vice President of global outplacement consultancy Challenger, Gray & Christmas, Inc. “When you take away walls, workers are in near constant contact with one another. During an aggressive flu season, this could affect entire companies, especially for the small and mid-size firms and start-ups that so often utilize this concept,” said Challenger.
Challenger recommends that organizations treat common spaces “as gyms treat exercise equipment”: clean them daily with disinfectant and make sure to keep a steady supply of soap and hand sanitizer available.
Senate Republicans including Mike Lee (Utah), Marco Rubio (Florida), and Joni Ernst (Iowa) are talking up a new proposal from the Independent Women’s Forum, a conservative economic policy shop, to establish a mechanism for US parents to access paid leave without creating additional costs for their employers by deferring their Social Security benefits in retirement, the Hill reports:
According to IWF’s six-page proposal, parents could take up to 12 weeks and receive on average 45 percent of their pay in a Social Security parental benefit that’s calculated using the same formula as Social Security disability benefits. The IWF estimates the average wage worker would receive $1,175 per month.
Lee said lawmakers are trying to figure out how to structure benefits so they are delivered to families when they need them, how the federal law should interact with state paid leave laws and how to keep the law from hastening the Social Security Trust Fund’s 2034 insolvency date.
Several House Democrats released statements criticizing the proposal, calling it “woefully insufficient” and arguing that working Americans should not have to forgo Social Security benefits to spend time with their newborn children. Democratic Rep. Rosa DeLauro also insisted that “any paid leave plan that reflects the needs of working people and families must address the need to deal with a personal or family member’s serious illness.”
The US is the only industrialized nation and one of only three countries in the world not to mandate paid time off for new parents, though the Family and Medical Leave Act guarantees mothers the right to unpaid leave during pregnancy and after childbirth. Many US employers, including the 20 largest private employers, offer some amount of paid parental leave, but millions of Americans lack access to this benefit.
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Airlines For America, a coalition of airlines including industry heavyweights Alaska, JetBlue, United and Southwest, filed a lawsuit in the US District Court in Tacoma, Washington on Tuesday, arguing that the mobile nature of the aviation workforce makes it impossible for them to comply with the paid sick leave laws recently enacted in Washington state and other states and cities, the Associated Press reports:
The complaint put it this way: “A flight crew departing from SeaTac International Airport, landing in Portland International Airport, and continuing to San Diego International Airport is subject to three different paid sick leave laws in a single duty period, each with its own accrual, compensation, reporting, and leave requirements.” The lawsuit seeks a ruling that federal regulation of air travel precludes Washington state’s sick leave law from applying to the airlines’ pilots or flight crews. …
The airlines say many of their employees already have generous sick leave and other benefits, and they’re covered by collective bargaining agreements. They also say that by restricting when employers can demand medical documentation for sick leave, Washington’s law will make it harder for them to crack down on fraud and abuse of sick leave policy. That, they insist, will lead to more employees calling in sick – and more flights being canceled or delayed due to a lack of adequate crew.
The airlines’ suit reflects the concern among multi-state employers that the expanding patchwork of local and state employment laws and regulations will make it harder and more expensive for them to do business across state lines or expose them to an excessive risk of litigation. This has prompted some conservative state governments to pass preemption laws barring localities from enacting their own labor regulations, while at the federal level, some lawmakers have sought to enact a national paid time off policy that would exempt employers from complying with local regulations if they met a less robust federal standard.
As part of a package of compensation and benefits increases, Starbucks announced on Wednesday that all of its US employees, both salaried and hourly, will be eligible for paid sick leave, while paid parental leave will now be available to all parents, the Associated Press reports:
Starbucks Corp. said Wednesday that the changes affect about 150,000 full-time, part-time, hourly and salaried employees, most of whom work as baristas or shop managers. The new benefits apply to workers at more than 8,200 company-owned stores but not at the 5,700 licensed shops like those found inside supermarkets.
The company also said workers would receive a pay raise in April, in addition to one-time stock awards ranging from $500 to $2,000. The new sick leave policy will come into effect in July, according to the AP. Previously, paid sick leave was only available to hourly employees in states that mandated it by law.
Starbucks’ parental leave policy for hourly employees has long exceeded what most US retail employers offer. Nonetheless, the coffee chain has recently faced pressure from activist investors to increase those benefits to match its substantially more generous policy for salaried corporate employees, following media reports scrutinizing the impact of this disparity on store employees. These latest changes do not equalize benefits for hourly and salaried employees, but will make parental leave available to some store employees who were not able to take it before, when it was only available to birth mothers and adoptive parents.
Even as the Trump administration rolled back numerous Obama-era regulations at the federal level and took more employer-friendly stances on a number of hot-button labor issues, 2017 also witnessed the continued proliferation of new laws and regulations in states and localities, particularly those whose legislatures are dominated by Democrats. Many of these policy changes came into force on January 1, while others will become effective later in 2018, meaning countless US organizations will have to adjust to a new and more complex regulatory landscape this year.
Minimum Wages Rise for Millions of Workers
To begin with, minimum wages rose on Monday in 18 states, including several that passed referenda to that effect in 2016. Arizona, California, Colorado, Hawaii, Maine, Michigan, New York, Rhode Island, Vermont, and Washington saw increases ranging from 35¢ to $1.00 per hour due to legislative or ballot measures, while the pay floors in Alaska, Florida, Minnesota, Missouri, Montana, New Jersey, Ohio, and South Dakota, which are pegged to inflation, rose automatically. The left-leaning Economic Policy Institute calculates that 4.5 million employees in total will see their pay increase thanks to these measures—though opponents of minimum wage hikes would argue that some of these employees will be laid off as their employers can no longer afford to pay them at the new rate.
California Keeps on Being California
With its huge labor market, diverse economy, and liberal government, California is a longstanding laboratory of progressive legislation, which serves as a bellwether for emerging regulatory trends and has an impact beyond the state’s borders as multi-state employers often opt to comply with California’s stricter rules nationwide for simplicity’s sake. A number of new laws came into effect in the Golden State this week that employers there need to be aware of. Mark S. Spring, a partner at Carothers DiSante & Freudenberger LLP, breaks down all of these changes at TLNT. Here are the changes in brief:
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Late last week, Republicans in the US Senate and House of Representatives both passed versions of a comprehensive tax reform bill whose signature feature is a hefty cut in the corporate tax rate, from 35 to 20 percent. The bill, which received no Democratic votes in either house of Congress, now goes to conference, where lawmakers from both chambers will attempt to reconcile the two bills. Significant differences still exist between the two versions, however, and the Senate bill underwent a number of hasty revisions at the last minute before being passed in the middle of Friday night. It is therefore still uncertain whether Republican lawmakers will be able to agree on an identical bill that can pass both the Senate and the House.
Both versions of the bill have major implications for employers, beyond the tax breaks for businesses. Together, the bills touch on health insurance, retirement plans, and other employee benefits, but do so in different ways. SHRM’s Government Affairs team prepared a handy chart comparing the bills’ employer implications side-by-side, while Stephen Miller gives a comprehensive rundown of the differences:
Tuition Benefits: The House bill would eliminate the employer-provided education assistance deduction under Internal Revenue Code Section 127, which allows employers to provide up to $5,250 of tax-free tuition aid to an employee per year at the undergraduate, graduate or certificate level. The Senate version does not eliminate the education assistance deduction. …
Individual Health Coverage: The Senate’s bill would effectively repeal the Affordable Care Act’s (ACA’s) individual mandate, which requires most Americans to have health insurance, by reducing to zero the tax penalty for going without coverage. The House bill leaves the individual mandate in place.…