Client Bulletin #543

Jeffrey M. Rosin

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On November 4, 2014, Massachusetts voters approved a new law, which will be codified at G.L. c. 149, § 148C, providing sick leave rights to all private employees in the state and most public employees. The law goes into effect July 1, 2015. The Attorney General is expected to issue rules and regulations to assist in implementing the new law.

The key provisions of the new law are as follows:

1. Paid Versus Unpaid Sick Time. For employers with 11 or more employees (which includes full-time, part-time and temporary employees), sick time is paid. For employers with 10 or fewer employees, sick time will be unpaid.

2. Accruing Earned Sick Time. Employees will earn one hour of sick leave for every 30 hours worked (a "1 for 30" rule) up to a maximum of 40 hours in a calendar year. Employees will begin accruing earned sick time beginning with July 1, 2015 or their date of hire, whichever is later, although they will not be entitled to use accrued earned sick time until they have been employed for 90 calendar days.

Employees who are "exempt" from the overtime requirements of the wage-hour laws will be deemed to work 40 hours in a workweek even if the employee generally works more than 40 hours per week. In other words, an exempt employee who regularly works more than 40 hours a week will not accrue earned sick time faster than someone working a 40-hour workweek. If an exempt employee regularly works less than 40 hours in a week (for example, a part-time professional), the employee will accrue sick time based on the "1 for 30" rule.

3. Using Earned Sick Time. Employees may use up to 40 hours in a calendar year. Employees may use earned sick time as it accrues after being employed for 90 days.

Earned sick time may be used either in hourly increments or in the smallest increment that the employer's payroll system uses to account for absences. We caution employers about the treatment of exempt white-collar employees with respect to the use of partial-day absences. The Massachusetts Supreme Judicial Court has said that the regulations applicable to the "white-collar exemptions" under the federal Fair Labor Standards Act will also apply to the Massachusetts white-collar exemptions. Under the FLSA regulations, deductions from the salary of an exempt white-collar employee for absences of less than one day (that is, hourly deductions) are generally not permitted under the salary basis test. However, employers who provide employees with paid sick leave may make deductions from accrued leave accounts for absences of less than one day.

Moreover, if the time taken under the new Massachusetts Sick Leave law also qualifies under the federal Family and Medical Leave Act, the employer may dock an exempt employee's salary for FMLA-protected partial day absences without affecting the employee's exempt status.

Earned sick time under the new statute may be used for a broader range of reasons than those applicable to employee medical leaves under the FMLA. Under the new Massachusetts law, grounds for taking sick time may include the employee's or close family member's physical or mental illness, injury or medical condition that requires "home care," "professional diagnosis or care," and even "preventative medical care." Although these types of absences may also be FMLA-qualifying, the Massachusetts law also includes time off for routine medical appointments. The close family members recognized by the state law are children, spouses, parents, or parents of spouses. Earned sick time may also be used to address the psychological, physical or legal effects on the employee of "domestic violence," as defined elsewhere under Massachusetts law.

4. Carrying Over Sick Time From Year to Year. Although employees are not entitled to use more than 40 hours in one calendar year, they may carry over a maximum of 40 hours of unused earned sick time to the next calendar year. Thus, an employee could start a new calendar year with a "sick time bank" of unused sick time from the prior year that the employee could use immediately rather than having to wait for sick time to be earned during the new calendar year. However, the law seems clear that an employee can never use more than 40 hours of earned sick time in a single calendar year; thus, if an employee has more than 40 hours of accrued sick time at the end of a calendar year, he or she will lose the amount in excess of 40 hours.

It should be noted that the new law allows employers to be "more generous" than the law requires. Employers may allow employees to accrue earned sick time in their first 90 days, or use or carry over more sick time than the minimum required by the new law. However, the law provides that it is not intended to "diminish or impair" an employer's obligation to comply with contracts, collective bargaining agreements, or employment benefit programs or plans in effect on the effective date of the new law that provide greater earned sick time rights than those established by the new statute. It is unclear what this means. For example, would it bar an employer of five employees from changing a benefit plan that provides paid sick time to one that does not in light of the new law?

5. Making Up Time. Employers and employees can agree that an employee can "make up [work] time" in the same or next pay period and thereby preserve his or her accrued sick time. However, the employer cannot force the employee to do that, or force the employee to find a replacement. The law does not require an agreement between the employer and the employee about making up work time to be in writing. Employers should be careful about agreeing to "make up time" because the result of additional hours in a given workweek could mean more overtime.

6. Medical Documentation. The rights of an employer to request medical documentation are limited, and even when an employer may request it, the statute does not specify any requirements for the contents of the medical documentation. The medical professional must simply "indicate the need for earned sick time." This may be one area where the Attorney General's regulations will provide some clarity. However, the new law is clear that failure to receive medical documentation is not a valid reason for the employer to delay the taking of or payment for earned sick time.

7. Retaliation. Employers may not "interfere with, restrain, or deny" the exercise of or the attempt to exercise any rights provided under the new law, nor may employers take "adverse action" against employees who oppose practices they believe to violate the law or who support others exercising their rights under the law. For example, an employer could risk violating the law by giving an employee a warning for calling in sick. Employers also should tread carefully even when an employee's sick leave request seems suspect. A question arises as to whether an employer can "force" an employee who is absent for a few hours to use accrued sick time when the employee refuses. This is a difficult question that will be largely fact-dependent, and one that may give rise to concerns of "retaliation."

8. Termination. Accrued unused sick time does not have to be paid upon termination of employment, unlike accrued unused vacation time, which is treated as wages and must be paid upon termination.

9. Posting Workplace Notices. The new law requires the Attorney General to prepare a notice for employers to post in their workplaces "in a conspicuous location accessible to employees in every establishment where employees with rights under this section work."

10. PTO Policies. The law allows employers with Paid Time Off policies covering all types of paid leave (sick, vacation, personal days) to maintain their policies as long as the policies provide the minimum rights noted above under the new law. However, the new law may present a challenge to an employer with such a policy who wants to limit carryover to sick time.

11. Interaction with Federal Laws. The law expressly does not impair collective bargaining rights or employee benefit plan rights in effect as of the effective date of the law (July 1, 2015) if those rights are more generous. Presumably, if the rights are less generous, the new Massachusetts law would prevail, although this may raise some legal issues relating to preemption by federal laws, such the National Labor Relations Act or the Employee Retirement Income Security Act.

Given the requirements of this new law, we recommend that all Massachusetts employers (1) examine their current sick leave policies to determine whether they need to implement an earned sick time policy or change their current policies in order to comply with the new law; (2) inform managers, supervisors and human resources administrators about the requirements of the new law – particularly the inclusion of a broader definition of "sick time" than under the FMLA and of the right of employees to take earned sick time even if they fail to provide timely documentation; and (3) remind their payroll departments of the regulations prohibiting deductions from the salary of a white-collar exempt employee for partial day absences. If the employer's sick leave policy provides for accrual of sick time on a calendar-year basis, any necessary changes to the policy should be made before January 1.

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