If Pain, Yes Gain—Part 99: Allegheny County Paid Sick Leave Ordinance Effective Today, December 15, 2021

Seyfarth Synopsis: Late last week, the Allegheny County Department of Administrative Services posted the Allegheny County paid sick leave ordinance notice on its paid sick leave website, along with guidelines and FAQs clarifying and expanding certain requirements of the ordinance. Importantly, the ordinance, which was enacted on September 15, 2021, provides that employers’ notice obligations become effective immediately upon approval, while the remaining provisions of the ordinance take effect on the 90th calendar day following the posting of the notice information for employers. However, notwithstanding this provision and the posting of notice information late last week, the County has indicated that the paid sick leave ordinance will take effect, in its entirety, today, December 15, 2021.

As noted in our prior Legal Update, Allegheny County became the first Pennsylvania locality at the county level and third locality in the state to pass a non-COVID-19 related paid sick leave ordinance.[1] Under the Allegheny County ordinance, covered employers will be required to allow eligible employees to earn up to 40 hours of paid sick leave per year.

While the December 15, 2021 effective date comes as an unwelcome surprise to employers given the notice requirements in the ordinance and the posting of notice materials on the County’s paid sick leave website on or around December 9, 2021, importantly, the ordinance provides a one-year grace period from December 15, 2021 during which “no fines or penalties shall be levied by the Agency against any employer.” The FAQs confirm that while as of December 15, 2021, the ordinance “is active and enforceable, fines may not be imposed for violations for one year after the Ordinance’s effective date.” Nonetheless, given the ordinance is active and enforceable in its entirety as of today, Allegheny County employers should immediately begin preparing for compliance, to the extent such preparations have not been made already.

When preparing to implement the Allegheny County paid sick leave ordinance, all Allegheny County employers should take into account the recently released guidelines and FAQs, which expand upon a number of substantive requirements, including but not limited to: (a) employer coverage and determining employer size; (b) employee eligibility; (c) accrual of paid sick leave; (d) frontloading and impact on carryover obligations; (e) maximum paid sick leave balance and annual use; (f) notice to employer of paid sick leave use; (g) verification of paid sick leave use for permissible purposes; (h) payment of sick time; (i) payout upon separation and reinstatement of paid sick leave upon re-hire; (j) available balance notification; and (k) notice to employees of paid sick leave rights.

Here are some of the highlights from the recently released paid sick leave guidelines and FAQs.

• Covered Employers and Determining Employer Size: As a reminder,  “employer” is broadly defined to include any person, partnership, limited partnership, association, corporation, institution, trust, government body or unit or agency,[2] or any other entity situated or doing business within Allegheny County employing one or more persons for a salary, wage, commission, or other compensation. However, the obligation to provide paid sick leave applies to employees of employers with 26 or more employees. For purposes of determining which employees to count towards the 26 or more employee threshold, the guidelines provide that the employer should count all employees, counting the highest number of employees at any one time in the last 12 months. The FAQs further clarify that all employees of the employer should be counted, regardless of their presence in the County.
• Eligible Employees: Under the ordinance, “employee” is broadly defined as any individual employed by an employer. Independent contractors, state and federal employees, and seasonal employees[3] are not included in the definition of “employee.” The guidelines add that when it comes to employees who work for an employer located outside of the geographic boundaries of Allegheny County, but who perform work within the County boundaries, such employees will fall under the definition of employee upon performing at least 35 hours of work within the geographic boundaries of the County in a calendar year.[4]
• Accrual Rate and Caps: The ordinance requires that employees accrue at least one hour of paid sick leave for every 35 hours worked[5] within the geographical boundaries of Allegheny County, up to a maximum of 40 hours of paid sick leave in a calendar year. In addition, there is a permissible point-in-time accrual cap under the ordinance, which provides “[a]t no point shall an employee . . . be permitted to have access to more than 40 hours of paid sick time.” The guidelines add that paid sick leave accrues in one hour increments, unless an employer’s written policy establishes the accrual of paid sick leave to be in fraction of an hour increments.
• Year-End Carryover: The guidelines confirm that accrued, unused paid sick leave carries over from one calendar year to the next, up to a maximum of 40 hours.
• Frontloading: As noted in our initial Allegheny County paid sick leave Legal Update, employers can provide 40 hours paid sick leave at the beginning of each year as an alternative to accrual, and doing so would eliminate year-end carryover requirements. The guidelines add “[f]or Employers who make a portion of the yearly cap of Paid Sick Time available to Covered Employees at the beginning of the Calendar Year, the Employer shall use a reasonable calculation, consistent with the accrual requirement set forth in the County’s Sick Leave Ordinance, to ensure that the accrual meets or exceeds the amount of Paid Sick Time an Employee would have otherwise accrued.” While not clear, it is unlikely that a pro-rata frontload eliminates carryover requirements. In addition, employers will likely still need to track accrual in order to ensure employees who receive a pro-rata frontload receive a sufficient amount of paid sick leave hours based on the ordinance’s accrual rate and their hours worked.
• Maximum Balance/Annual Usage Limit: As highlighted above, the ordinance permits a 40-hour annual accrual cap, and appears to set a point-in-time accrual cap of 40 hours of paid sick leave, and an equivalent year-end carryover cap. The FAQs suggest that, in tandem, these caps can also limit the amount of paid sick leave an employee can use in a given year to 40 hours. In particular, the FAQs state in relevant part that “[w]hen an Employee has carried over or accrued an amount equal to 40 hours in a given Calendar Year, that Employee is not able to accrue further time in the Calendar Year. Consequently, an Employee can only use what is available at the time and as such would never be in a position to use greater than 40 hours of Paid Sick Time in any given Calendar Year.” Relatedly, while scenarios where an employer permits more than 40 hours of paid sick leave to accrue in a year or at any given time are not addressed by this FAQ, it should be noted that the guidelines provide in general that “Paid Sick Time benefits provided by an Employer in excess of what is required by the County’s Sick Leave Ordinance are not subject to the requirements of the County’s Sick Leave Ordinance.”
• Notice to Employer: The guidelines reiterate that advance written requests to use paid sick leave are permitted, but not required, and at minimum, an advance oral request must be provided to the employer by the employee for use of paid sick leave.
• Documentation: Under the ordinance, after an absence of three (3) or more full consecutive days, an employer may require an employee to provide reasonable documentation that paid sick leave was used for a covered reason. “Reasonable documentation” is defined as documentation signed by a health care professional indicating that paid sick leave is necessary. Employers are reminded that documentation requirements cannot include a requirement that the employee provide the precise nature or specific details of the employee’s or their covered family member’s medical condition. In addition, the guidelines provide that when an absence covered by the paid sick leave ordinance is also covered by the federal Family Medical Leave Act (“FMLA”) an employer can seek medical certification in accordance with the FMLA, regardless of the length of the employee’s absence, without violating the ordinance.
• Rate of Pay: Under the ordinance, “Paid Sick Time” is defined as time that is compensated at the same base rate of pay, and with the same benefits, including health care benefits, as an employee would have earned at the time of their use of the paid sick time. An employee’s hourly wage when using paid sick leave cannot be less than the Pennsylvania minimum wage. The guidelines expand on this requirement as follows:
  • Employees who are compensated based on a set salary or on time worked at a fixed hourly rate shall be compensated for any accrued paid sick leave based on the same rate as they would normally earn from work.
  • Tipped Employees and Commission Paid Employees shall be compensated for any accrued paid sick leave at a rate not less than the minimum hourly rate for hours worked, as required under the Pennsylvania Minimum Wage Act. The rate of pay shall be the base rate of pay and shall not include lost tips or commissions.
  • Employers are required to compensate employees only at their regular hourly rate (or at minimum wage) whether or not an employee has earned or could have earned pay at an overtime rate during some part of the relevant pay period.
  • Employers shall calculate employees’ normal hourly compensation using a reasonable calculation based on the hourly rate that an employee would have earned for the time that the employee used paid sick leave. The guidelines provide specific examples of such calculations for piece rate employees, salaried employees, employees with fluctuating pay, and employees with shifts of indeterminate lengths.
• Timing of Payment: Per the guidelines, unless an employer requires verification for use of paid sick leave of three or more full consecutive days, it is recommended that an employer pay for accrued paid sick leave to an employee no later than the payday for the pay period in which the paid sick leave was used by that employee. However, if an employer requires verification of the use of paid sick leave of three or more full consecutive days, it is recommended that an employer provide payment for sick leave no later than the payday for the pay period during which verification is provided to the employer. All such practices must comply with applicable wage payment laws.
• Payout Upon Separation and Reinstatement Upon Re-hire: Under the ordinance, employers are not required to pay out employees’ accrued, unused sick leave upon an employee's separation from employment. When an employee separates from employment and is re-hired within six months by the same employer, previously accrued, unused paid sick leave must be reinstated. The guidelines clarify that the reinstatement provisions apply regardless of whether the employee is re-hired at the same or a different location. In addition, the guidelines provide that employers may choose to pay out employees’ accrued, unused paid sick leave upon separation from employment despite no requirement to do so. In such instances, where the employee is re-hired within six months after having received a payout, sick leave that was paid out upon separation need not be reinstated.
• Available Balance Notification: Despite no requirement to do so in the ordinance, the guidelines provide that it is recommended that employers choose a reasonable system to provide employees notice of their accrued paid sick leave balances, including listing updated amounts of paid sick leave available on paystubs or regular payroll statements, or in an online system where employees can access the information.
• Notice of Rights/Posting: As noted in our prior Legal Update, the paid sick leave ordinance lacks details on the mechanism by which employers must provide the required notice of rights. The guidelines and FAQs fill in these gaps. Per the guidelines, the notice promulgated by the County must be displayed at each worksite. Employers must display the notice in a conspicuous and accessible location where any of their employees work in English, Spanish, and any other primary languages of the employees at the particular workplace.[6] The notice posted must be at least 8.5 X 11 inches. Where posting the notice is not feasible, including a situation where the employee works remotely or does not have a regular workplace, employers may provide the notice on an individual basis in the employee’s primary language in a physical or electronic format that is reasonably conspicuous and accessible.

Employer Takeaways

Employers should take steps as soon as possible to comply with the Allegheny County paid sick leave ordinance’s recently announced December 15, 2021 effective date. We will continue to monitor Allegheny County paid sick leave developments and update employers as appropriate. When preparing to comply with the ordinance, here are some steps to consider:

• Review existing sick leave or PTO policies and practices and either implement new policies and practices or revise existing policies and practices to ensure compliance with the ordinance, guidelines, and FAQs, while doing the same for any related attendance, conduct, anti-retaliation, and discipline policies and practices.
• Post the County’s paid sick leave notice in all Allegheny County workplaces in accordance with the guidelines, and where not feasible, distribute a physical or electronic copy of the notice to employees in accordance with the guidelines.
• Train supervisory and managerial employees, as well as HR, on the new requirements.
• Monitor the Allegheny County paid sick leave website for the release of additional administrative guidance and materials on employers’ paid sick leave obligations.

With the paid leave landscape continuing to expand and grow in complexity, companies should reach out to their Seyfarth contact for solutions and recommendations on addressing compliance with this ordinance and paid leave requirements more generally. To stay up-to-date on Paid Sick Leave developments, click here to sign up for Seyfarth’s Paid Sick Leave mailing list. Companies interested in Seyfarth’s paid sick leave laws survey should reach out to paidleave@seyfarth.com.

 

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[1] Both Philadelphia and Pittsburgh have non-COVID-19 related paid sick leave ordinances in effect. Philadelphia and Pittsburgh have also passed COVID-19 specific paid sick leave ordinances twice during the COVID-19 pandemic. While both Philadelphia COVID-19 PSL ordinances and the original Pittsburgh COVID-19 PSL ordinance are now expired, the latter Pittsburgh COVID-19 paid sick leave ordinance remains in effect until July 29, 2022.

[2] The definition of “employer” does not include the United States government, the state of Pennsylvania, or any departments, agencies, or other bodies of the state.

[3] “Seasonal employee” is defined as “[a] person who has been hired for a temporary period of not more than sixteen weeks during a calendar year and has been notified in writing at the time of hire that the individual's employment is limited to the beginning and ending dates of the employer's seasonal period, as determined by the employer.”

[4] “Calendar year” is defined as a regular and consecutive 12-month period as determined by the employer and communicated to all employees.

[5] Employees who are exempt under the federal Fair Labor Standards Act are assumed to work 40 hours each workweek for purposes of paid sick leave accrual, unless their normal workweek is less than 40 hours, in which case sick leave accrues based upon their normal workweek.

[6] While the notice is only available in English at this time, the guidelines provide that the County Department of Administrative Services will develop multilingual versions of written notices and forms required for the implementation and enforcement of the paid sick leave ordinance.