As of January 1, 2024, Washington employers with commercial construction workers will need to be prepared to comply with new rules regarding paid sick leave. There are also new provisions applying to all employers.
Employers with Covered Construction Workers:
In particular, Washington’s paid sick leave (PSL) law will now require that any covered workers that separate from employment before reaching 90 days must be paid out any accrued but unused paid sick time (or PTO if that is used to satisfy the sick leave requirements).
Who are considered “construction workers”?
Under the final rules just enacted by Washington’s Department of Labor & Industries (the “Department”), “construction workers” for purposes of this payout requirement, are defined as “any employee covered under the 2022 North American Industry Classification System (NAICS) industry code 23, except for those employees who perform only work described in NAICS 2361, residential construction.” Notably, under the rules, the definition also includes employees who work for an employer that performs commercial construction-related work (as described in NAICS 23) but are not directly engaged in the construction work itself, such as non-exempt administrative staff.
As a reminder, sick leave/PTO must be paid out at the employees’ normal hourly compensation, which could be more than their standard hourly rate of pay. Current guidance states that it must also include any: piece-rate earnings, commissions, non-discretionary bonuses, and differential rates of pay.
Employers with covered construction workers are now also required to track and maintain the following records:
- Any amount of sick leave/PTO paid out to a “construction worker” following separation from employment;
- The date(s) of separation from employment; and
- The construction workers’ first date of employment.
Lastly, while adopting these new rules to interpret these legislative changes, the Department added language to address two additional issues that extend beyond the construction context:
- New Rules for PTO Equivalent Programs. Now, employers who want to use a PTO program to satisfy their PSL requirements, must provide specific notice to employees. Presumably, this may mean including language in the policy itself stating that the program is intended to satisfy the PSL law’s requirements. In addition, if the program is more generous than what the PSL law requires, it must also meet the following minimum requirements:
- The leave amounts that are more generous must be tracked separately from the balances that are required by the state’s PSL law;
- The portion of the PTO bank that is specifically required by the state’s PSL law must independently comply with all of the minimum requirements of the state’s PSL laws;
- The program cannot require employees to use their entitled leave (i.e. the PSL required balance) as a condition to access more generous leave accruals; and
- The employer cannot have policies that encourage employees to use their entitled leave for more generous purposes (e.g. vacation) before accessing more generous accruals.
- Sick Leave Usage is Optional. The new rules state that using available sick leave is the employee’s choice, and an employer may not require an employee to use accrued sick leave. That said, the employee would not be entitled to the job protections afforded by the sick leave law if they do not elect to use it for a covered absence. Note, however, such absences could be protected under other leave laws.
Key Takeaways for Employers
All Washington employers will want to be sure to update their sick leave policies and practices now in light of these new rules to remain in compliance. In addition, employers who employ any personnel that meet the “construction worker” definition outlined above will want to be sure that those changes include the new payout requirements if the employee leaves employment before 90 days, make sure that the payout is at the correct amount, and that they are documenting the start and end dates of their employment, as well as the amount paid out.
The legal issues impacting this topic are and will continue to be ever-changing (Employment Law in Motion!), and since publication of this blog post, new or additional information not referenced in this blog post may be available.
This article is provided for informational purposes only—it does not constitute legal advice and does not create an attorney-client relationship between the firm and the reader. Readers should consult legal counsel before taking action relating to the subject matter of this article.