WRITTEN TESTIMONY ON BEHALF OF THE ERISA INDUSTRY COMMITTEE (ERIC) REGARDING SENATE BILL 196 BEFORE THE SENATE COMMITTEE ON COMMERCE, LABOR AND ENERGY
The ERISA Industry Committee (ERIC) is the only national association that advocates exclusively for large employers on health, retirement, and compensation public policies at the federal, state, and local levels. ERIC speaks in one voice for our members on their benefit and compensation interests. We are pleased to provide to you today with written testimony that focuses on ensuring large employers, who largely already meet or exceed the requirements of Senate Bill 196 (“SB 196”), do not experience a drastic increase in administrative burden of operating paid sick leave policies.
Our members strive to provide high-quality paid sick leave policies to their employees. At ERIC, we seek to enhance our members’ ability to provide flexible paid sick leave plans by advocating in favor of public policies that enable an employer to provide a consistent experience for all employees. We recognize the growing importance of paid sick leave for employees and the states’ desire to ensure the care and well-being of its workers. We strongly support increasing access to paid sick leave policies for Americans, but believe it should be accomplished in a manner that does not hinder employers who already provide quality paid sick leave policies.
ERIC members want their employees to have the care that they need—when and how they need it. As our members are multistate employers, we advocate that they be allowed to maintain uniformity and continuity across state lines by:
· Not being required to modify existing policies that provide employees equivalent, if not better, paid sick leave than the proposed legislation;
· Ensuring legislation clearly defines whether an employee is subject to the rule by defining primary place of employment;
· Not being required to provide for carryover of unused paid sick leave that has accrued; and
· Easing any compliance burdens that frustrate or create unnecessary administrative hurdles.
ERIC appreciates that SB 196 takes into consideration the needs of employees in being able to take leave to care for themselves and their loved ones. While well intentioned, the proposed amendments to Chapter 608 of Nevada’s Revised States (NRS) will severely infringe large employers’ ability to provide consistent paid sick leave to their employees in Nevada. Most large, multistate employers already offer some of the highest-quality paid leave plans to their employees, and should therefore not be subject to this bill.
SB 196 works against large employers in several ways, including: (i) a lack of guidance on eligible employee; (ii) requiring the carryover of accrued sick leave, even when sick leave is front-loaded; (iii) mandating the tracking of employees’ accrued sick leave; and (iv) providing no clear definition of who a family member is for purposes of care. SB 196 does provide an exemption from the bill’s requirements for employers who have equivalent, existing policies but it can be improved for clarity.
A. Employee Eligibility. SB 196 requires every employer in private employment to provide paid sick leave to each employee of the employer. SB 196 contains no definition for who qualifies as an eligible employee, but Chapter 608 of the NRS defines an employee as: “both male and female persons in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed.”[1] ERIC believes that this definition can go further and clarify the difference between employees who work in the state on an irregular basis and those whose primary place of employment is in the state. We suggest including the following language to foster greater clarity:
“(1)(a)(i) An “employee” shall be defined here as in under NRS § 608.010.
(ii) For purposes of this Section, an employee is deemed to be in service of an employer in the state if the state is the employee’s primary place of employment. An employee’s primary place of employment shall be in the state where: (A) a substantial amount of duties are regularly performed; (B) the work flow is centered; and (C) the employee’s base of operations is located or where work is directed and controlled.”
B. Carryover of Accrued Leave. SB 196 requires that any unused accrued paid sick leave be carried over from year to year, but may be capped by employers at 48 hours a year. Mandating carryover of accrued leave will have an adverse effect on the total rewards package of employee benefits provided by employers. For ERIC members, paid sick leave is contemplated alongside healthcare and retirement benefits, and therefore affects—and is affected—by any change in the three. By forcing large employers to allow for carryover, you may also force their hand in decreasing the quality of healthcare or retirement they offer to compensate accordingly. Large employers prefer flexibility in the plans they provide. ERIC respectfully requests that SB 196 be revised to allow employers to front-load all available paid sick leave without requiring a carryover of unused sick leave. This flexibility can be provided by replacing Section (1)(b) with the following language:
“At the beginning of each year, an employer may award to an employee the full amount of earned sick leave that an employee would earn over the course of the year rather than awarding the leave as the leave accrues during the year, and—at the employer’s discretion—allow for carryover of any unused sick leave.”
C. Tracking Accrued Leave. SB 196 requires employers to provide each employee with the number of hours of accrued paid sick leave available each payday. On top of this, the notice must be in writing. With paydays occurring at least twice a month, this mandate will place an immense administrative burden on large employers. For large employers that offer paid sick leave in forms other than accrual (e.g. unlimited paid sick leave or paid-time off banks), tracking available leave is not part of standard operating procedures. Thus, by requiring this of employers Nevada will be creating an administrative burden in the form of implementing new tracking methods, increased paper records, and expanded recordkeeping protocols. ERIC respectfully requests that the Committee either remove this provision, or provide that employers may satisfy this requirement through less burdensome methods. For instance, the Legislation could provide the following by revising Section (f) to the following:
“(f)(i) An employer shall provide to each employee on each payday a written accounting of the hours of accrued sick leave available for use by that employee.
(ii) An employer may satisfy the requirement under Paragraph (i) by providing an online system through which an employee may ascertain the balance of the employee’s available earned sick leave.
(iii) An employer who provides unlimited sick leave or unlimited paid-time off to employees may satisfy the requirements under Paragraph (i) by clearly stating the policy in the employee handbook provided at the time of hire.”
D. Definition of Family Member. SB 196 permits employees to use accrued paid sick leave for the care or treatment of a “member of the employee’s family or household.” However, nowhere in the bill or in Chapter 608 of the NRS is “family member” or “household member” defined. The lack of clearly established definitions for these individuals leaves too much room for interpretation, and would lead to a patchwork implementation. ERIC respectfully quests that the Committee provide a definition of family member that mirrors The Family and Medical Leave Act of 1993 (FMLA). The FMLA provides for leave for employees to care for a child, spouse, or parent. As with the definition for an eligible employee, by including this definition a uniform floor is established without mandating anything more than what federal law requires. We recommend that it should be the decision of employers on whether to broaden the list of family members for whom an employee may take leave to care for.
E. Paid Time Off Banks. SB 196 provides that it will not preempt or prohibit any contract or other agreement that provides a more generous paid sick leave or PTO policy. ERIC appreciates provisions such as this, as it allows large employers to maintain continuity and uniformity with their paid sick leave policies. We believe, however, that the language could be stronger and clearer, mainly for those employers that provide a bank of time that contains both paid vacation and sick leave time. ERIC suggests that the Committee provide clarity on this point, by use of such language as the following:
“An employer shall not be required to provide additional paid sick leave if the employer has a paid leave policy that makes available an amount of paid leave sufficient to meet the accrual requirements of this chapter and that may be used for the same purposes and under the same conditions as paid sick leave under this chapter.”
The Legislation would be adding to the patchwork of state laws for paid sick leave, thereby increasing the administrative and compliance burdens on large employers. ERIC urges the Committee to consider large employers’ interests as you further consider SB 196. ERIC welcomes the opportunity to serve as a resource to the Committee as it considers this legislation and the importance of paid sick leave to large employers and their employees.
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If you have any questions concerning our written testimony, or if we can be of further assistance, please contact Will Hansen at whansen@ERIC.org or 202-789-1400.
Sincerely,
Will Hansen
Senior Vice President, Retirement Policy
[1] Nev. Rev. Stat. § 608.010 (2016).