Ocean City Today

Gov. Hogan unveils his sick leave compromise

Business groups remain wary because of impact on seasonal operations
By Brian Gilliland | Nov 30, 2017
Photo by: Executive office of the governor Gov. Larry Hogan, flanked by other officials, announces his version of paid sick leave legislation.

(Dec. 1, 2017) Fulfilling the promise he made to offer an alternative to the paid sick leave bill he vetoed last spring, Gov. Larry Hogan on Tuesday unveiled his approach that would phase in paid sick leave over the next three years.

To be submitted by the administration when the General Assembly convenes in January will be the Paid Leave Compromise Act of 2018, which would require businesses with 50 or more employees to begin offering accrued paid sick leave in 2018. Business with 40 or more workers would have to comply by 2019 and all businesses with 25 or more employees would have to abide by the rule in 2020.

Qualifying businesses that demonstrate a “significant financial hardship” could receive a temporary waiver from the Department of Labor under Hogan’s proposed legislation.

On the employee side, the governor’s bill sets up a system that would allow employees of a business with 25 or more employees to accrue one hour of paid leave for every 30 hours worked.

The bill Hogan vetoed, the Maryland Healthy Working Families Act or HB01, offers one hour of paid sick leave for every 30 hours worked for employers with 15 or more employees. Those with 14 or fewer employees would be required to offer one hour of unpaid leave per 30 hours worked.

Hogan’s proposal includes $100 million over five years in tax credits to businesses with fewer than 50 employees that offer paid leave to its employees.

If the governor vetoes a bill after the regular session, as he did with HB01, the veto must be considered as soon as the legislature reconvenes. The Maryland Healthy Working Families Act has an effective date of Jan. 1, so if the veto is overridden by a two-thirds vote in both chambers, it becomes law immediately.

HB01 passed both houses with veto-proof majorities, meaning more than two thirds of elected officials supported the measure. It passed the House of Delegates by a comfortable margin, but every State Senator must retain his or her previous vote to override in the senate.

“When we introduced our common sense paid leave proposal just over a year ago, I made it very clear that our administration was not drawing a line in the sand,’ Hogan said in a press release. “We repeatedly extended an invitation to legislative leaders to join us in an open, honest dialogue so that together, we could find a balanced, fair compromise approach to paid sick leave in Maryland.”

State Sen. Jim Mathias (D-38) knows his vote will be crucial in the upcoming debate, and knows the measure is not popular with the local business community.

“I’ve expressed my willingness to work with the governor several times, and my whole career is predicated on finding compromise,” Mathias said. “My vote was based on compromise I’d already achieved, including getting 106 days before the leave could be used, with an additional 14 with a doctor’s note.”

The bar had been set at 90 days. The number of days was expanded during negotiations based on the average number of days between Memorial Day and Labor Day. However, some seasonal employees begin work earlier than Memorial Day while others work past Labor Day because of shoulder season demands.

About 5,500 seasonal J-1 workers are employed in Ocean City on 120-day visas each year. Businesses that use foreign students during the summer are concerned those employees will now work only 106 days and use the remaining leave to finish out their visas.

Susan Jones, director of the Hotel-Motel-Restaurant Association in the resort, said continuing the conversation is good, now that the intricacies of HB01 are better understood.

“We’ll be watching it closely. It has huge consequences here, particularly if seasonal employees choose to take their leave at the end of the season,” she said. “I think compromise is a great way to start the next session.”

Jones said the industry isn’t opposed to the idea of paid time off for employees, but the state’s one-size-fits-all solution doesn’t speak to the needs of her seasonal membership.

The business community, as represented by the chamber of commerce, is also concerned about the introduction of state-mandated paid time off for employees.

“Our biggest concern has been the seasonal component as well as the onerous reporting/record keeping required and severe sanctions/penalties for non-compliance, even if it was not intentional on the part of the employer,” said Melanie Pursel, executive director of the Ocean City Chamber of Commerce.

“We have found that a large majority of Ocean City businesses already offer paid leave as well as other benefits to their year-round, full-time employees. If they now had to offer paid leave to summer/seasonal employees, this law would actually compromise their ability to operate.”

Del. Mary Beth Carozza (R-38C) opposed the legislature’s bill last session and said Hogan’s compromise measure is consistent with her position.

“Both last year and this session, I offered the 120-day seasonal exemption amendment to the paid sick leave bills ... and I am encouraged that Gov. Hogan has included this necessary exemption in his compromise bill,” she said.


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