CEO Adviser: It’s the Law

Last September, when the Seattle Paid Sick Time and Safe Time Ordinance was approved by the Seattle City Council, most Puget Sound area businesses were not spurred to take action. The ordinance wasnt scheduled to take effect for a year, and many businesses not based in Seattle city proper assumed the ordinance did not apply to them.

The reach of the ordinance is much broader than many perceive. It applies to businesses outside Seattle and will affect businesses throughout the state. The provisions take effect September 1.

Compliance with the ordinance will force modifications of existing business policies and time is short for understanding its effects, satisfying requirements, implementing policy and processing systems changes. Additionally, businesses will need to communicate these changes throughout their organizations.

The ordinance specifically applies to any business with more than four full-time-equivalent employees with at least one employee working in Seattle either part time or full time. If the Seattle employee works more than 240 hours a year within Seattle, the employer must provide the employee with paid sick leave and safe leave.

The amount of paid leave time accrued by the employee and the number of hours of leave time required to be carried forward is based on the number of company full-time-equivalent employees, regardless of where the employees work.

The obvious implication of the ordinance is that it requires companies that do not currently offer paid sick time to provide it as a benefit to employees. However, the ordinances requirements run far deeper and require most companies to take a hard look at their current policies. Even companies that currently offer paid sick leave or have more general paid time off policies will likely have to make significant changes to their business practices. Below are examples of how some current policies fail to comply with the ordinance.

Most company policies do not define sick time and safe time, as required by the ordinance. The definitions in the ordinance are specific and broader than most current policy definitions.

Paid Time Off policies typically do not set aside sick and safe time. Therefore, the accrual, use and carry-forward requirements of the ordinance are often not met. Accrual rates and carry- forward allowances must comply with the ordinance.

Policies that exclude certain categories of employees, such as part-time or temporary employees, would violate the ordinance because the ordinance requires all employees working in Seattle to be provided leave benefits.

Many company policies require a waiting period for employees before they are eligible for paid time off. The ordinance prohibits any waiting or qualification period.

Requirements for and restrictions on documentation of absences are specifically defined in the ordinance. For example, an employer cannot require an employee to provide documentation of the reason for an absence until the employee has been absent for three consecutive days.

In addition to these policy changes, employers will need to implement changes in their processes and systems. Under the ordinance, employers are required to report to employees their accrued sick and safe time each pay period. In addition, time tracking policies and tools might need to be modified for the employees who work both inside and outside the City of Seattle; these hours must be tracked to determine when an employee is eligible for sick and safe time accrual.

This ordinance is complex and the effective date is just around the corner. To comply, employers must fully understand the requirements and implement the needed policy, process and system changes. In evaluating changes, business owners will want to balance the requirements of the ordinance with the needs of their businesses. Its not practical to change all internal processes to avoid offering sick and safe leave but it makes sense to understand how these requirements fit into your business needs.

Time is short. If you havent started to implement and communicate these changes across your business, now is the time to begin.

Michelle Bomberger is managing attorney at Equinox Business Law Group. She can be reached at [email protected] or 425.250.0205.