By AJ Esral

Employers in Maryland and Washington, D.C. face complex legal challenges. This guide explains key employment law concepts and how businesses can protect themselves.

PTO: What You Need to Know

By: AJ Esral

It’s the bane of many employers’ existence.

How much paid time off do I have to give? How much should I give? Can I place strings on it? Blackout dates? Two-week notice requirement? Probationary periods? Sick time or vacation? Does it matter?

Employers have lots of questions. Here’s the thing. What many employers refer to as “PTO” really means three separate things:

Required paid sick and safe leave (Maryland-specific)

Job-protected unpaid leave buckets (some federal, some Maryland), and Whatever PTO you choose to offer on top of that. And each, as you can imagine, has its own rules. So here’s a very brief overview of these three

Sick and Safe Leave. The only paid leave a Maryland employer is legally obligated to provide is sick leave. Let me say that again: the only paid leave a Maryland employer is legally obligated to provide is sick leave.

Maryland has a law called the Sick and Safe Leave Act, which requires employers with 15 or more employees to provide up to 40 hours of paid sick and safe leave (SSL) per year to any employee who works at least 12 hours a week. Employers with fewer than 15 employees

must offer the same amount of leave, only unpaid.

That’s it. Any paid leave beyond those 40 hours is optional. Now, because this leave is legally required, there are some rules that come along with it, which will not apply to any additional PTO you choose to offer. Here are the main requirements:

Sick leave vs. vacation leave: It is sick leave, so you only are obligated by law to provide this leave for actual sickness, plus a handful of domestic violence-related cases. You do not have to permit employees to use it for vacation leave.

Accrual vs. frontloaded: An employer has the option of providing the 40 hours up front at the beginning of either the calendar year or the employee’s date of hire, OR granting it on an accrual basis of 1 hour earned for every 30 worked. The advantage of frontloading it is that the law does require you to carry over any unused sick and safe leave at the end of the year, whereas accrued hours do have a certain carryover requirement.

Probation period: You are permitted to establish a policy that new employees may not use their SSL for their first 106 days of employment, although the employee must accrue the leave right away.

No blackout dates or mandatory notice requirements: Since this is sick leave, there are no blackout dates, and an employee only need give reasonable notice, so you can’t enforce a strict two-week notice rule.

You can read more about the Sick and Safe Leave Act, as well as view sample policies, here. Job-Protected Unpaid Leave Beyond the Sick and Safe Leave Act, though, there still is unpaid leave that an employer may need to provide.

There are two buckets to know about here. The federal Family and Medical Leave Act (FMLA), which applies to companies with more than 50 employees, requires employers to give their full-time employees unpaid, job-protected leave for up to 12 weeks for qualifying reasons, such as a serious health condition (their own, or that of a sick family member) or the birth, adoption, or foster placement of a new child.

The Maryland Parental Leave Act (MPLA) applies to companies with 15-49 employees, and requires employers to offer unpaid, job-protected leave to full-time employees for the birth, adoption, or foster placement of a child.

Importantly, you as the employer may require employees to use up all their PTO (or SSL, as the case may be) concurrent with their FMLA or MPLA leave.

But you still have to provide this leave, and that means protecting their job until they get back. Now, a caveat: you only need to protect their job if you weren’t planning on terminating them for reasons unrelated to their need for leave. In other words, they only have as much job protection as they had when they were fully employed and coming to work each day.

For example, if your company had planned a mass layoff, and this employee was to be included in the layoff, then going out on leave would not protect the employee from being laid off. Similarly, if the company had decided to discharge this employee for justifiable reasons (such as poor performance or misconduct), then the employee cannot protect

himself by going out on FMLA leave. Moreover, the FMLA has carveouts for certain key employees, whose prolonged absence would cause “substantial and grievous economic injury to the company.”

With that said, though, companies must proceed with caution. Employees tend to view FMLA leave as sacred; anything that has the appearance of violating it will frequently turn into a DOL complaint or lawsuit. Consult with your attorney before you discharge any employee while they are out on FMLA or MPLA leave.

It’s worth mentioning three other buckets before closing out this subsection: Americans with Disabilities Act (ADA) leave: employees with a disability may request a reasonable accommodation, which often consists of temporary unpaid leave. Similar considerations apply when discharging an employee on ADA leave as those taking FMLA leave.

eave. Military leave (USERRA): federal law provides protected unpaid leave for military service and training; and Jury duty leave: Maryland law provides unpaid mandatory leave for jury duty, for which you cannot force employees to use PTO.

Additional PTO

You really can stop here. When you comply with the legal requirements described above, you have fulfilled all your legal obligations. What follows is beyond what the law requires and should be recognized as extra benefits you offer voluntarily for the benefit of your employees.

Companies are permitted to provide some amount of additional paid leave per year beyond what the sick and safe leave that the law requires. Because this PTO is voluntary, you may determine the rules that apply. This additional paid leave often (but not necessarily) is based on seniority and typically may be used for any reason (including additional sick leave, vacation, or personal leave). Companies often provide PTO in increments of 40 hours, but are not obligated to do so. Typically, companies require that new employees complete their 90-day probationary period (another legal myth, for another time) and give two weeks’ advance notice.

The main thing employers often don’t realize about this is that any PTO beyond sick and safe leave is entirely voluntary. That means you get to set your own rules about how much an employee gets, what the accrual rates and caps are, blackout dates, advance notice requirements, carryover, and whether you will pay out accrued but unused leave upon termination of employment.

It’s all up to you.

Just make sure that your policies are clearly drafted and well-disseminated so that employees know exactly how your PTO policy works. If you need help with designing, reviewing, or revamping a PTO policy that works for your company, shoot me an email at aj@luchanskylaw.com. I would be happy to help.

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