Washington State Department of Labor & Industries
7273 Linderson Way SW
Tumwater, WA 98501
RE: I-1433 Rulemaking – Draft Proposed Rules
Ladies and Gentlemen:
The ERISA Industry Committee (“ERIC”) is pleased to submit comments on Washington State’s Department of Labor and Industries’ proposed rules on Initiative 1433 (“Proposed Rules”) regarding paid sick leave.
I. ERIC’S INTEREST IN THE ANNOUNCEMENT
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’s members provide comprehensive paid leave programs that benefit tens of millions of workers and their families. ERIC has a strong interest in proposals, such as these proposed rules, that would affect its members’ ability to provide quality and uniform paid sick leave benefits.
ERIC is grateful for the opportunity to provide comments on the Proposed Rules. We share the same goal of ensuring American workers have access to paid sick leave, but, ERIC strongly encourages Washington State to not adopt any final rules that would increase administrative and compliance burdens on large employers. As it stands now, most large employers already provide paid sick leave benefits to their employees that exceed the amount provided under the new mandate, but could be hindered in continuing to do so by these Proposed Rules.
Large employers should have the ability to design their own paid sick leave benefits that meet the needs of their business and individual workforce, while still satisfying the intent of Washington’s Propose Rules. Many large employers tailor their paid sick leave plans to work within the overall compensation and employee benefits goals of the company, and are tailored to their industry, competitive environment, and specific needs of their workers. Thus, ERIC member companies do not utilize a one-size-fits-all model for paid sick leave and should not be subject to such a model under the Proposed Rules.
ERIC appreciates the opportunity to provide comments on ways in which the administrative impact of the Proposed Rules can be decreased for large employers who already offer paid sick leave plans. In particular, ERIC appreciates the opportunity to comment on: (i) the required carryover of accrued, unused leave; and (ii) broadening of the exemption for current paid time off (PTO) programs.
II. SUMMARY OF COMMENTS
The following is a summary of ERIC’s comments, which are set forth in greater detail below:
- Mandating the carryover of accrued, unused paid sick leave will have an adverse effect on the total rewards package an employer provides to employees; potentially, forcing employers to alter other leave programs, such as vacation, short-term disability (STD) and long-term disability (LTD) plans that are often more generous than the paid sick leave program mandated in the State of Washington.
- Employers who have a paid leave program or policy that satisfies the requirements under Washington law should be fully exempt from the requirements under the Proposed Rules.
A. Carryover of Unused Leave. The Proposed Rules state that an employer is required to carryover at least 40 hours of paid sick leave that an employee has accrued but not used from one year to the next. A mandate to carryover unused paid sick leave is in direct contradiction to paid sick leave mandates in other political subdivisions, including large municipalities, such as Seattle. Seattle recognized the importance of providing flexibility in designing paid sick leave policies while ensuring the underlying intent of the law is satisfied.
When employers, especially large, multistate employers, are forced to allow employees to carryover unused leave, it impacts the total rewards package that employers provide. For most, paid sick leave is contemplated alongside healthcare and retirement benefits (i.e. a change in one is a change in all three). In addition, paid sick leave policies will dovetail with short and long term disability policies. Finally, the amount of paid sick time provided may relate to the amount of vacation time provided to an employee. Large employers, and ERIC members especially, prefer flexibility in designing the plans they provide. If a state or municipality enacts a policy that is vastly different from what other political subdivisions have enacted, large employers who operate in multiple locations are greatly burdened in their ability to provide consistent benefits to employees across the company. Additionally, requiring employers to allow for carryover when they already front-load all available leave would create an undue administrative burden on employers with no added benefit being conferred on the employee.
ERIC respectfully requests that the word “must” be changed to “may” under the section providing for Accrual, WAC 296-128-610. In the alternative, ERIC requests that the Proposed Rules be amended to provide for carryover only in instances where the employer does not frontload paid sick leave as provided under WAC 296-128-710. That is, when employers allow for frontloading of leave, they can do so without also allowing for carryover (i.e. a use-it-or-lose-it provision).
B. Paid Time Off Programs. The Proposed Rules provide an exemption or “safe harbor” for employers that have in place a universal PTO program or policy that complies with paid sick leave provisions already enacted (i.e. RCW 49.46.200 and 49.46.210). This safe harbor, however, is only available for PTO programs and not for other paid sick leave programs or policies that satisfy the requirements under Washington law.
For example, an employer could have in place a policy that provides for unlimited paid sick leave. While it is reasonable that these programs could be included in the exemption, ERIC respectfully requests amending the Proposed Rules to provide for such, which would foster greater clarity and conformity.
ERIC appreciates the opportunity to provide comments on the Proposed Rules. We understand Washington’s goal of providing paid sick leave benefits to its workers, and seek only to ensure clarity of the Proposed Rules and consistent, uniform application of them.
If you have any questions concerning this letter, or if we can be of further assistance, please contact Will Hansen at whansen@ERIC.org or 202-789-1400.
Senior Vice President, Retirement & Compensation Policy