Key Takeaways

• Laws and regulations that mandate paid leave for employees in certain circumstances can vary widely from state to state, from circumstance to circumstance, and even within a given state

• Employers with operations in different locations or those seeking to expand beyond their city/county/state borders will likely have to take an assortment of paid leave rules into account in crafting and executing their own internal paid leave policies

• While applicable laws certainly shape paid leave policy and expectation from one place to another, employers that operate in areas with relatively unobtrusive paid leave rules often adopt policies that go well beyond the minimum required of them by the government in order to comply with industry/geographic norms and/or gain a competitive advantage with regard to talent attraction and retention

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ARTICLE | Top 25 States With Most Employer-Friendly Paid Leave Laws

Last month, we covered the rising popularity and prevalence of consolidated and unlimited leave policies relative to non-consolidated leave policies, which have now nearly become a minority policy among US employers.

These policy choices and changes do not occur in a vacuum, however, and can be significantly impacted by both industry and geographic norms as well as governmental rules and regulations, which can sometimes vary widely from one state, county, and municipality to another.

While data on the geographic distribution of leave policy structure can be found in our benchmarking reports, available on mployeradvisor.com, this piece will be the first in a pair of articles that will highlight major differences in the rules governing paid leave from state to state in the US, compiled from information primarily from Vacation Tracker and Paycom.

This piece will cover the 25 states that provide the most leeway for employers to determine their own policies with regard to providing employees with paid leave.

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Alabama

Alabama state paid leave law requires only that employers provide their employees with paid leave for jury duty if the employee provides notice of jury duty summons within one business day of receiving the summons. Further, that PTO for jury duty service must not reduce the amount of PTO an employee may have otherwise accrued, although employers are permitted to deduct the amount paid to the employee by the court from any amount the employer owes the employee.

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Alaska

Alaska state paid leave law requires employers to provide employees with paid voting leave in order to cast ballots in municipal, county, state, and federal primary and general elections if that employee’s shift starts earlier than 2 hours after the polls open or ends later than 1 hour before the polls close. While the employee is to be given sufficient time to enable them to vote, the employer gets to determine the hour(s) when the employee leaves work to cast their vote.

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Arkansas

While Arkansas provides no mandatory paid leave for private employees in the state beyond what the policies and contract requirements set by the employers themselves, state law does allow public employees paid sick leave for illness, injury, and the death or illness of a close family member. Those public employees can accrue up to 30 days (depending on employee tenure) of paid sick leave every year.

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Arkansas state law also requires state employers to provide paid leave for jury duty, but no similar requirement exists for private employers, although private employers are prohibited from requiring an employee to use vacation or other leave in order to fulfill their jury duty requirements.

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Florida

Florida state law imposes no obligations on employers with regard to paid leave for employees.

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Idaho

Idaho state law entitles state employees to up to 8 weeks of paid leave following the birth or adoption of a child, but no similar requirement for private employers exists unless the private employer has adopted or contracted to provide such a policy.

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Indiana

Indiana state law makes no requirements for employers to provide employees with paid leave.

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Iowa

Iowa provides for some paid vacation leave for state employees, but there is no similar requirement for the employees of private employers.

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Further, employees who do not have 3 consecutive hours off work during which time polls are open are entitled to up to 3 hours of paid leave in order to cast their votes, though employers have the right to determine which 3 hours are made available to their employees.

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Kansas

Kansas has no formal state laws requiring paid leave, although internal leave policies adopted by companies may be legally enforceable against employers if they rise to the level of a “promise.”

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Kansas employers must, however, provide employees with up to 2 consecutive hours to vote (including employee non-working hours when the polls are open) and the timing of which the employer has the right to determine.

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Kentucky

In Kentucky, employers are not required to offer paid leave for vacation, but if they do offer such paid leave, it is considered essentially equivalent to wages and must be dealt with accordingly - in this case meaning any unused leave of this sort must be paid out when an employee leaves the company.

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Further, while Kentucky doesn’t require paid family leave to employees upon the birth of a child, if an employer does provide paid maternity/paternity leave, they must also make those provisions available to newly adoptive parents.

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Mississippi

Mississippi state law imposes no obligations on employers with regard to paid leave for employees.

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Missouri

Missouri employers are required to provide 3 hours of paid voting leave if employees schedules do not already allow for 3 consecutive non-working hours when the polls are open.

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Montana

Montana state law imposes no obligations on employers with regard to paid leave for employees.

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New Hampshire

New Hampshire state law imposes no obligations on employers with regard to paid leave for employees, although there is an optional paid family and medical leave insurance program that employers can opt into.

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North Carolina

Although North Carolina state law doesn’t require employers to provide paid vacation time, if employers choose to do so and don’t specifically state as a matter of policy or contract that unused PTO will not be paid out when the employee leaves the company, then NC employers are required to make those payouts at the conclusion of employment.

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North Dakota

While North Dakota state law doesn’t mandate PTO, employers who choose to offer it are required to pay out unused PTO upon the conclusion of employment, although there are a few exceptions. Employers are not required to pay out unused PTO if the employee does not provide at least 5 days notice prior to their departure or if an employee has been on the job for less than 1 year. Also, employers can provide written notice at the start of their employment that any unused PTO will not be paid out, in which case the employer is not required to pay out unused time.

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Ohio

Although Ohio employers are not required to provide paid vacation time, if they do offer paid vacation and employment policy and contracts don’t specifically make it clear that unused PTO will not be paid out when an employee leaves the company, then employers are required to pay out for unused PTO when the employ departs the organization for whatever reason.

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Oklahoma

Oklahoma employees are entitled to 2 hours of paid voting leave (and more than 2 hours if their commute to polling place and work would reasonably require it), but employees are required to provide at least 1 day notice to their employer regarding their absence.

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Pennsylvania

Pennsylvania employers are not required to provide paid sick leave in general, but employers in Philadelphia, Pittsburgh, and Allegheny County are required to provide employees with paid sick leave.

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In Philadelphia, employers with 10 or more employees must provide paid sick leave to employees, which accrues at a rate of 1 hour earned for every 40 hours worked up to 40 hours, which aren’t usable until the employee has been on the job for 90 days.

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In Pittsburgh, employees earn 1 hour of paid sick leave for every 35 hours worked, capped at 24 hours per year for employers with fewer than 10 employees and capped at 40 hours total for employers with 10 or more employees.

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Allegheny County employers with 26 or more employees must provide them with 1 hour of paid sick leave for every 35 hours worked, capped at 40 hours.

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South Carolina

South Carolina state law places no paid leave requirements on employers.

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South Dakota

South Dakota employers are required to provide any employee that doesn’t already have 2 consecutive hours off duty when the polls are open with 2 hours of paid vote leave, although the employer can set the time during which the leave is exercised.

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Texas

Texas employees who notify their employer in advance and who don’t already have 2 consecutive hours off work during polling hours are entitled to a reasonable amount of paid voting leave.

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Virginia

Virginia state law limits paid sick leave requirements to home health care workers who work an average of 20 hours per week or 90 hours per month. Qualifying employees accrue paid sick leave at a rate of 1 hour earned for every 30 hours worked, capped at 40 hours per year and capable of being rolled over from year to year unless the sick leave was frontloaded.

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West Virginia

West Virginia employees who don’t already have 3 consecutive hours available when they’re off duty and polls are open are entitled to 3 hours of paid voting leave so long as they provide at least 3 days notice prior to the day of the election.

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Wisconsin

Wisconsin state law imposes no obligations on employers with regard to paid leave for employees.

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Wyoming

Wyoming employers are required to provide employees (who don’t already have 3 consecutive hours when they are not scheduled at work and polls are open) with 1 hour of paid voting leave, though the employer is allowed to pick when the employee exercises the leave and only has to pay out on the hour of wages owed if the employee actually votes.

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Mployer Advisor’s Take

Stay tuned for Part 2 where we'll take a look at the 25 states with more employee-friendly paid leave laws and what they are requiring from employers.

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Key Takeaways

• Even among states with paid leave requirements, the nature and degree of those requirements can vary significantly, with some states adopting relatively minimal paid leave requirements and others with paid leave laws that are significantly more involved and comprehensive

• Employers with operations in different locations or those seeking to expand beyond their city/county/state borders will likely have to take an assortment of paid leave rules into account in crafting and executing their own internal paid leave policies

• While applicable laws certainly shape paid leave policy and expectation from one place to another, employers that operate in areas with relatively unobtrusive paid leave rules often adopt policies that go well beyond the minimum required of them by the government in order to comply with industry/geographic norms and/or gain a competitive advantage with regard to talent attraction and retention

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ARTICLE | Top 25 States With Most Employee-Friendly Paid Leave Laws (Part 2)

In part 1 of this 2 part series, we took a look at the 25 states with the most employer-friendly laws and regulations in terms of the circumstances in which the state may require some or all employers to provide some or all employees with paid leave. 

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In this piece, we’ll review the paid leave rules in the remaining 25 states that have more employee-friendly laws and regulations, which includes a much wider spectrum of regulatory involvement, ranging from a relatively minor paid leave requirements that don’t go much beyond what is required in the states covered in Part 1, all the way up to substantial, robust paid leave mandates and worker protections.

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Arizona

Arizona paid leave law requires private employers with $500,000 or more in annual revenues to provide their employees with one hour of paid sick leave for every 30 hours worked. 

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For employers that have more than 15 or more employees, those employees can accrue up to 40 hours of sick leave per year, while the employees of employers with fewer than 15 employees can accrue a maximum of 24 hours of paid sick leave per year. 

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Employers can require employees to wait up to 90 days after the start of their employment before they can use any paid sick leave that has accrued, and employers are not required to pay out any accrued PSL upon termination, employees are allowed to roll over paid sick leave from one year to the next.

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Arizona employers are also required to provide up to 3 hours of paid leave to enable employees to vote in any municipal, county, state, or federal primary or general election if those employees do not already have 3 consecutive hours available to them when the polls are open and they are not required to be at work. 

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California

California enacted one of the more robust paid sick leave policies among states, requiring pretty much all employers - with few exceptions, such as railroad companies and airlines - to provide at least 40 hours of paid sick leave each year to their employees, even part-time and temporary workers, who have worked at least 30 days out of the first year of their employment. While employees begin accruing pid sick leave as soon as they begin working, accruing at 1 hour of paid sick leave for every hour worked, employees are not legally allowed to use the accrued leave until they have been on the job for at least 90 days.

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California state law doesn’t require employers to offer either paid or unpaid vacations, but if an employer chooses to offer PTO, then any unused hours (not including unused paid sick leave) must eventually be paid out with the employee’s last paycheck. 

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Further, while California employers are required to allow employees to roll over unused PTO days, as well as up to 80 hours of paid sick leave, they do have significant leeway in determining how many consecutive PTO days an employee can use, preventing employees from using PTO on certain dates, and implementing notice requirements that must be met before leave will be granted. 

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California law entitles employees to 8 weeks of paid family leave at between 60% to 70% of employee’s income, up to $1,620 each week in 2024, although importantly this leave is not necessarily job-protected, though other state and federal laws may protect an employees job in this situation nonetheless. State Disability Insurance can also be used as support for up to 1 year with weekly payouts of between 60% -90% of income, capped at $1,325 per week. 

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California employees who don’t otherwise have time to vote also get up to 2 paid hours for voting leave if they provide their employers with at least 3 days’ notice of their intent to be away from their job for the purpose of voting.

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Colorado

Colorado state law requires all employers to provide paid sick leave, which accrues at a rate of one hour of paid sick leave for every hour worked. That accrued sick leave can be capped at 48 hours per year, but Colorado law requires employers to allow employees to roll over unused paid sick leave from one year to another. 

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Colorado employees who earn at least $2,500 per year and have been on the job for at least 180 days are entitled to up to 12 weeks of family leave with partial pay, which can include up to an additional 4 weeks of paid parental leave in the event of pregnancy and/or childbirth complications. 

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And while Colorado state law does not require employers to offer paid vacation time, Colorado does require employers to pay out any unused PTO in the event that the employee leaves the company.  

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Colorado law also requires employers to pay employees $50 per day for the first 3 days of jury duty service, after which the state will take over jury service compensation. 

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Finally, for any employee whose shift starts less than 3 hours after the polls open or ends less than three hours before the polls close, employers must offer up to 2 hours of PTO so that employees can exercise their right to vote, and while employers can choose when an employee votes during the middle of a shift, if the employee requests to vote at the beginning or end of a shift, the employer is obligated to honor that request.

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Connecticut

Connecticut law requires employers who had averaged at least 50 employees at some point in the prior year, to provide paid sick leave to employees who work at least 10 hours a week, which accrues at a rate of 1 hour of paid sick leave for every 40 hours worked for up to 40 hour per year, which can be rolled over to the next year if unused. Paid sick leave hours begin accruing immediately, but can not be used until an employee has worked 680 hours on the job. These rules cover most employees, but exceptions include employees who are exempt from overtime and minimum wage rules in accordance with the Fair Labor Standards Act. 

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Paid family and medical leave is available to most Connecticut employees (including many sole proprietors and self-employed people) for up to 12 weeks per year (with a potential additional 2 weeks in the event of medical complication) so long as the employee has earned at least $2,325 in one of the previous four quarters, is currently employed, and has been employed for the preceding 12 weeks. Qualifying employees can receive up to 95% of their typical income with a cap set at 60 times the state’s minimum wage, currently $15.69 per hour. 

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Further, for the first 5 days of an employee’s jury duty service, Connecticut law requires employers to pay employees $50 per day before the state then takes over those payments. 

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While Connecticut voters had been entitled since 2021 to 2 hours of paid time off to vote in special elections and standard elections for state and federal representatives should they request that time off at least 2 days in advance, those rules are set to expire at the end of June 2024, after which time the voting paid time off requirement will no longer be valid absent the intervention of Connecticut lawmakers. 

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Delaware

Delaware currently has no laws in effect with regard to paid time off requirements, but beginning January 1, 2026, employees who have worked at least 1,250 hours for an employer over the past year are eligible for up to 12 weeks of paid family and medical leave at a rate equivalent to the lesser of $900 per week or 80% of the employee’s weekly pay. 

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Georgia

Georgia state law requires employers with 25 or more employees to allow those employees who work at least 30 hours per week to accrue up to 5 paid sick leave days per calendar year that can be used to care for close family members in need. 

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Hawaii

Hawaii state law allows for partial paid leave via Temporary Disability Insurance, which requires that an employee has worked in Hawaii for 14 or more weeks and has worked at least 20 hours and earned at least $400 in each of those weeks, although the weeks need not be in a row and can be spread among multiple employers. Employees can receive up to 67% of their average weekly wages, with a cap that’s currently set around $700 per week. 

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While pregnancy and childbirth applications of the temporary disability insurance program usually last between 4 and 6 weeks, the disability insurance generally is available for up to 6 months. 

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Hawaiian employees that don’t already have 2 consecutive hours when they are off work and polls are open are also entitled to up to 2 hours of paid voting leave, though employers can require proof that the employee voted. 

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Illinois

Illinois state law entitles employees with 1 hour of flex leave for every 40 hours worked (capped at 40 hours per year) that can be used for any purpose. Employees must, however, wait 90 days after their leave time has begun accruing before they can exercise it, and employers are allowed to require 7 days notice before accrued leave can be used and can set a minimum leave usage increment of at least 2 hours. 

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Whether or not employees are allowed to roll over unused leave depends on whether employers have front-loaded leave (i.e. provided a pro rated 40 hours on the first day of the year to all employees, in which case employee leave does roll over from one year to the next) or whether employees accrue their hours of leave one at a time - 1 hour of leave for every 40 hours worked as described in the preceding paragraph - in which case leave does roll over. 

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Further, while Illinois does not provide for paid sick leave statewide, Cook County and the city of Chicago both have laws in place guaranteeing paid sick leave for employees who have been with their employer for at least 6 months, worked at least 2 hours within the city/county over the last 2 weeks, and have worked at least 80 hours within the last 120 days. Paid sick leave for qualifying employees accrues at 1 hour for every 40 hours worked, capped at 40 hours annually. 

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Employees in Illinois are also entitled to up to  2 hours of paid leave in order to vote if their schedule does not already provide for 2 consecutive hours off work during which the polls are open. 

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While Illinois does not require most unused leave to be paid out upon termination, if leave has been specifically granted as PTO or vacation, then employers must compensate employees for it when an employee leaves the company.

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Louisiana

Louisiana employers are not required to provide paid vacation time, but those employers that choose to offer such PTO are required to pay out any unused time at the conclusion of employment if the employee is eligible for a vacation at that time of their departure according to company policy.

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Louisiana employers also must provide employees with one day’s wages on the employee’s first day of jury duty.

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Maine

Maine law requires that most employers provide employees with 1 hour of paid leave for every 40 hours worked, capped at 40 hours per year - although there are exceptions including employers with fewer than 10 employees and employees that are seasonal or commission-based. 

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If employers front-load employee paid leave banks to 40 hours at the start of each year (or at the start of an individual new employee’s employment) then that leave is not required to roll over, but if the leave is accrued, then roll over is mandated by law. Employers must also pay out any unused leave at the conclusion of an employee’s employment. 

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Maryland

Maryland state law requires employers to provide 1 hour of paid sick leave for every 30 hours worked, capped at 40 hours per year, to employees who have worked for the employer at least 12 hours per week for 15 weeks, although the law excludes employees under the age of 18, independent contract workers, seasonal agricultural workers, and those operating under collective bargaining agreements. Further, unused leave can roll over but the bank is capped at 64 hours accumulated total. Employees who work at least 8 hours each week in Montgomery County have their annual sick leave accrual cap set at 56 hours.

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For employers with 15 or more employees that do provide paid leave, the Maryland Flexible Leave act provides for paid time off in the event of an illness or death of an immediate family member, as well. 

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Maryland employers are also required to provide at least 2 hours of paid voting leave if an employee’s schedule does not already provide for 2 consecutive non-working hours when polls are open. 

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Massachusetts

Massachusetts state law does not require employers to provide paid vacation leave, but employers who have adopted such a policy are required to pay out any unused time when the employee leaves the company. 

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Massachusetts employees earn 1 hour of paid sick time for every 30 hours worked - capped at 40 hours per year and unusable until the employee has been on the job for at least 90 days - which can be utilized to take care of themselves and/or close family members dealing with physical or mental illness. Employers are allowed to require 7 days notice for appointments that are scheduled in advance, and can also opt to allow employee paid sick leave to accrue on a statutorily-set lump-sum schedule if they don’t want to track the hours worked of individual employees. Employers in Massachusetts also have the option of front-loading paid sick leave for their employees, in which case roll over isn’t required, but roll over is mandated when the leave is accrued.

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Massachusetts employees are also entitled to up to 12 weeks of paid family leave and 20 weeks of paid medical leave which can combine to amount to as many as 26 weeks of paid leave in a year. 

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Further, Massachusetts employers are required to pay out up to 3 days of jury duty leave.

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Michigan

Michigan state employers and private employers with 50 or more employees must provide paid sick leave to employees who work at least 25 hours a week for at least 26 weeks a year, which accrues at a rate of 1 hour of leave for every 35 hours worked, capped at 40 hours per year and can roll over from one year to the next if unused. Employees, however, are not allowed to use accrued leave until their 90th day on the job. Employees exempted from these paid sick leave requirements include workers operating under collective bargaining agreements or those exempt from minimum wage and overtime regulations. 

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Minnesota

Minnesota employees who worked at least 80 hours over the last year in Minnesota can accrue 1 hour of paid sick leave for every 30 hours worked, capped at 48 hours per year - but that paid leave doesn’t become available to employees until they’ve been on the job for 90 days. Unused hours also roll over from one year to the next, capped at 80 hours. 

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4 cities in Minnesota - Minneapolis, St. Paul, Duluth, and Bloomington - each have additional paid sick laws that go further than the statewide paid sick leave requirements. 

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Minnesota employers are also required to allow employees paid leave so they can vote, though no minimum or maximum lengths of time for that leave are specified. 

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Nebraska

Nebraska employers are not required to provide any paid vacation leave, but if they do offer such PTO, employers are required to pay out for any PTO that remains unused when an employee leaves the company. Nebraska state law also specifically forbids Nebraska employers from enacting use-it-or-lose-it policies with regard to earned leave, so Nebraska employees are entitled to be paid out for any remaining unused leave at the conclusion of their employment.

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Nebraska law also requires employers to provide paid leave for jury duty, and 2 consecutive hours of paid leave to vote in municipal, country, state, and federal primaries and general elections if the employees schedule does not already allow for 2 consecutive off-duty hours during polling hours, though employers retain the right to determine during which hours eligible employees are allowed paid leave in order to vote. 

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Nevada

Nevada employers with 50 or more employees must provide flex leave time that can be used for any purpose, which employees acquire at a rate of 0.01923 hours of paid leave per hour worked, which is about 1 hour of paid leave for every 52 hours worked. The law doesn’t apply to temporary, seasonal, and on-call workers, and employers can exempt themselves from the law by providing a flat 40 hours of paid time off each year to each eligible employee. Employers who have been in operation for less than 2 years are also exempt.

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Further, Nevada state law doesn’t cap the amount of PTO that employees can accrue, but it does allow employers to limit the amount that employees can use to as little as 40 hours in a benefit year. Employees must also work for 90 days before they are able to use any of the accrued PTO.

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Employers are required to provide paid leave for employees to vote, as well: 1 hour of paid leave if the polling place is less than 2 miles away, 3 hours of paid leave if the polling place is more than 10 miles away, and 2 hours of paid leave otherwise. 

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New Jersey

New Jersey law mandates that employees earn 1 hour of paid sick leave for every 30 hours worked capped at 40 hours per year, and employees must be on the job for 120 days before utilizing any accrued paid leave. Further, employees are entitled to roll over from one year to the next up to 40 hours of unused paid sick leave, but employers can require up to 7 days notice for appointments and can require reasonable documentation for absences that last 3 or more days in a row. 

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New Jersey state law also enables employees to take up to 12 weeks per year of flexible paid family leave, which is funded by the New Jersey Family Leave Insurance Program via payroll deductions. 

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New Mexico

New Mexico state law entitles employees to 1 hour of paid sick leave for every 30 hours worked, capped at 64 hours per year, which employees can roll over from one year to the next. 

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New Mexico does not require PTO accrual, but if an employer adopts a policy of providing PTO and allowing earned/unused hours to accrue, then unused time off must be paid out when the employee leaves the company. 

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Employers in New Mexico must also allow employees 2 hours to vote if polls are not open for 2 hours prior to the start of a shift of 3 hours after the end of a shift. 

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New York

New York employers that have between 0 and 4 employees and more than $1 million in revenue and New York employers that have between 5 and 99 employees regardless of revenue must provide employees with 40 hours of paid sick leave per year, accrued at 1 hour of leave for every 30 hours worked. New York employers with 100 or more employees must provide 56 hours of paid sick leave each year.

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New York employees are also entitled to 12 weeks of paid family leave per year after they have completed at least 26 weeks in a row of at least 20 hours of work per week. Those leave payments are typically covered through insurance and provide up to 67% of an employee’s average weekly salary, capped at 67% of the statewide average weekly salary, which currently puts the cap at about $1,068 per week.

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New York employees are also entitled to collect up to 26 weeks of short-term disability (or 4 to 6 weeks for disability as a result of pregnancy and/or childbirth), but these disability payments are only available during times when an employee is actually, physically unable to perform the job. 

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New York state law also requires that employers with more than 10 employees must pay $40 dollars a day for each of the first 3 days of an employee’s jury duty service.

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New York employees that don’t have 4 consecutive hours during which to vote are also entitled up to 2 hours of paid voting leave, but employees must notify their employers between 2 and 10 days before their planned voting absence, and employers can choose what time the voting leave is exercised.

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Oregon

Oregon employers are not required to provide paid vacation leave, but if they choose to offer it and their employment policies and contracts don’t specifically absolve employers of the responsibility to pay out unused PTO at the conclusion of employment, then employers are required to make those payouts when an employee parts ways with the employer.

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Oregon employers with 10 or more employees are required to provide paid sick leave at a rate of 1 hour earned for every 30 hours worked, which is capped at 40 hours per year that can be rolled over to the next year when unused (unless the leave is front-loaded), but any accrued leave can not be used until the employee has worked at least 90 days. 

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Oregon employees are also entitled to up to 12 weeks per year of paid family/medical/safe leave via a social insurance program.

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Rhode Island

Rhode Island state law requires employers to pay out any unused PTO upon termination if the employee has been on the job for at least 1 year. 

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Rhode Island employers that have 18 or more employees are required to provide paid sick leave at a rate of 1 hour for every 35 hours worked (capped at 40 hours per year and capable of roll over from one year to the next), which accrue immediately upon commencement of work but can not be used for the first 90 days of employment. 

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Rhode Island employees are also entitled to up to 30 weeks of temporary disability insurance and up to 6 weeks of temporary caregiver insurance, each offering up to about $1000 per week.

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Tennessee

Tennessee employers with 5 or more employees are required to provide paid leave for jury duty service, though employees must show their employer their jury summons on the day they receive their jury summons or the day after receiving summons in order to be eligible, and employers can deduct any payment received from the court from the wages owed to the employee. 

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Tennessee employers are also required to provide up to 3 consecutive hours of paid vote leave to any employee that does not already have 3 consecutive hours off work when the polls are open. In order to qualify, employees must request paid voting leave by 12pm on the day prior to Election Day.

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Tennessee state employees and some metropolitan employees also are eligible for up to 6 weeks of paid family leave. 

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Utah

Utah employers are not required to provide PTO, but if they do they must explicitly make clear their policy of not paying out unused PTO upon termination, otherwise unused PTO must be paid out when an employee is terminated. 

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Utah employees that don’t already have at least 3 hours off during polling hours are entitled to 2 hours of paid voting leave, provided that they give their employer at least 1 day of advanced notice, and employers may still choose when the leave is exercised.

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Vermont

Vermont employees earn 1 hour of paid sick leave for every 52 hours worked, capped at 40 hours per year which can be rolled over from 1 year to the next if unused, but employees may have to wait up to 1 year before utilizing accrued leave. In order to be eligible, however, employees must be at least 18 years old, must have worked at least 20 weeks in the last year, and must have averaged 18 hours per week over the year, as well.

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Washington

Washington employers are required to provide employees with paid sick leave that accrues at a rate of 1 hour earned for every 40 hours worked, with up to 40 hours capable of being rolled over from one year to the next. Employees may have to wait 90 days before utilizing the accrued leave, at the employer's discretion. 

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The city of Seattle expands upon the statewide paid sick leave rules by allowing the employees of employers that employ between 50 and 259 employees to roll over 56 hours of accrued paid sick leave per year, while employees of employers with 250 or more employees can roll over up to 72 hours per year of unused leave.

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Washington state law also provides for a paid family leave insurance program that enables employees to take up to 12 weeks of paid leave for many family and medical events including childbirth under normal circumstances, and up to 18 weeks given certain qualifying events. 

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Mployer Advisor’s Take

While the range of regulatory involvement with regard to paid leave varies considerably between states, the bars set by state rulemakers can tend to be on the low-side relative to the actual paid leave benefits offered by companies within those states.

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Even in states with no paid leave requirements whatsoever, industry and regional/intra-state norms often set standards that many if not most applicable employers follow, and those norms can sometimes go beyond the heftier mandates laid out by some of the states with more comprehensive regulation, as well.

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As a result, in order to maintain a more complete picture of both best practices and talent expectations, it is important to keep up with a changing regulatory environment, both on the state and federal level, as well as benchmarking against comparable employers in the same industry and/or region.

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Editor's Note: This report is based on survey data from June 2024 that was published in July 2024. This is the most recent data available. (Source: Bureau of Labor Statistics)

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The unemployment rate hit 4.1% as of the latest report from the Bureau of Labor Statistics, which is the highest the unemployment rate has been since November 2021, albeit still well within the range of a healthy job market.

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US employers added 206 thousand jobs, which slightly exceeded the 200 thousand that were expected. That said, the latest report also included downward revisions of the job additions reported in April and May amounting to 111 thousand jobs, which is a reduction of almost 25% of new jobs from what was initially reported.

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The number of unemployed people climbed a bit to about 6.8 million after hovering around 6.5 million for several months, and the number of long-term unemployed made a significant jump up by about 166 thousand up to 1.5 million last month, as well. 

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Of the approximate 200 thousand new jobs added, the largest portion were government jobs, which grew by 70 thousand payroll entries -  a significant improvement over the approximate 50 thousand government jobs added on average over the last year.

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The healthcare industry was also responsible for a significant chunk of the new jobs, netting almost 50 thousand new jobs, which is strong albeit down from the 64 thousand monthly average, followed by the social assistance and construction industries, which each grew by about 25 thousand jobs last month.

Industries that recorded a net reduction in jobs last month include the retail and professional services industries, which dropped about 9 thousand and 17 thousand jobs respectively, while there was no meaningful change in the employment numbers in the energy, manufacturing, warehousing, transportation, information, financial activities, and leisure and hospitality industries. 

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The average workweek didn’t budge from 34.3 hours per week for the third month in a row, while average hourly pay rose by 10 cents to $35.00 per hour, which is a 0.3% jump over the month and represents a slight slowing in rate increase from the month before. Hourly wages are up 3.9% total over the last year.

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Mployer Advisor’s Take

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On one hand, there are economic professionals who describe the latest jobs report as the ideal balance, with a job market that’s neither too hot nor too cold, but instead is right in the sweet spot in the middle that the Fed is targeting.

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On the other hand, however, there are plenty of experts of equal stature who are starting to call more attention to the potential problems on the horizon.

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Beyond the dramatic downsizing of the last couple of months of job gains, another potentially troubling sign is the sharp reduction in temporary worker employment recorded last month, which can often foretell employer expectations that their growth will slow, stop, and or reverse. 

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Another problematic indicator worth keeping an eye on is the noteworthy increase in the percentage of unemployed people who are now long-term unemployed, which has grown nearly 3 and a half percent in the last year and now accounts for 22% of the total unemployed population in the US.

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The Fed will meet again at the end of this month and determine whether or not to keep interest rates where they are or whether to start bringing them down, and this report (including recent revisions) certainly makes a rate cut or two this year more likely and markets seem to believe we remain on track for  a quarter point decrease in September. 

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As previously noted, however, any rates that may come to be are far from guaranteed at this point, even if markets are largely pricing in a pair of quarter point drops before 2025. 

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From this onlookers perspective at least, the latest report makes an interest rate reduction sometime this fall now more likely than not, but another report like this one and a rate reduction this year will graduate to plain old ‘likely.’ 

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Check out the Mployer Advisor blog here.

Each month, Mployer Advisor collects and presents some of the most relevant and most pressing recent changes in law, compliance, and policy in areas related to employee benefits, health care, and human resources. 

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Supreme Court Decision With Major Implications For Workplace & Labor Regulation

When Federal agencies enforce the laws that Congress writes, they often have to make judgment calls in interpreting the statutory language about how to practically go about accomplishing the intentions of the law. 

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For the last 40 years, those agencies have relied on Supreme Court precedent requiring courts to defer to the agencies’ judgment in interpreting how to enforce federal statutes so long as there was some ambiguity about what the statute intended that the agencies had interpreted in a reasonable manner. 

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That deference was especially relied upon when modern agencies were interpreting federal laws that were written a long time ago, like the Fair Labor Standards Act, which was written in the 1930s when working conditions, and American life for that matter, were very different.

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With the Supreme Court’s latest decision in the cases of Relentless v. Department of Commerce and Loper Bright Enterprises v. Raimondo, however, that deference previously afforded to federal regulators in interpreting ambiguous federal laws and filling in the gaps will now be shifted to the federal courts.

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While the ruling will not overturn all previous decisions that have been based on the deference previously afforded executive agencies, of which there are thousands, those previous challenges are now ripe to be litigated, only now the government will have to justify their interpretation of the statute and their resulting authority to take a given action with persuasive reasoning, which will likely prove to be a much harder standard for federal regulators to meet.

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It may take some time before major effects from this decision start being felt, but the regulatory landscape will likely look very different in the next 5 years than it has for the past 30 and at the very least there is likely to be significant confusion in the meantime. 

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Overtime/Minimum Wage Exemption Threshold Increases Beginning July 1, 2024

The Department of Labor recently increased the pay thresholds for Executive, Administrative, and Professional employees (EAP) including salaried computer workers, and Highly Compensated Employees (HCEs) to remain exempt from federal minimum wage and overtime laws.

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Beginning today, July 1, 2024 the EAP exemption threshold will increase from $35,568 to $43,888. That threshold number is also set to rise again the following year on January 1, 2025, when the EAP exemption minimum annual salary rises to $58,656, after which automatic increases will begin July 1, 2027 and every three years after that. 

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The increase in the minimum HEC exemption threshold follows a similar path, with the first increase up to $132,964 beginning today, before increasing again to $151,164 on January 1, 2025 and every three years after beginning on July 1, 2027. 

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The overtime and minimum wage exemption threshold for computer workers that are paid hourly remains at $27.63 per hour, while the threshold for computer workers paid on salaried basis is linked with the EAP minimum. 

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Barring any unforeseen changes or court-initiated interventions, the first exemption-threshold increases are set to take effect in one  month. 

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In preparation, employers and human resources professionals may want to identify all the employees who may be affected and assess whether to increase their pay in accordance with the rate increases or whether it is better to begin paying them overtime (and minimum wage if applicable) instead. 

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You can find more about these exemption threshold increases here. 

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HSA & HDHP Inflation Adjustments Announced

The IRS announced the 2025 adjustments to health savings account and high deductible health plans:

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The self-coverage limit increased by $150 to $43,00 while the family coverage limit increased by $250 to $8,550.

• There was a $50 dollar increase on the minimum annual HDHP deductible, bringing it up to $1,650, while the family coverage deductible rose by $100 up to $3,300. 
• The maximum yearly out-of-pocket expenses for single coverage HDHPs, including premiums, deductibles, and other related expenses) rose by $250, up to $8,300, while the family coverage equivalent increased by $500, up to $16,600

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You can read more about the adjustments here. 

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Pregnant Workers Fairness Act NOW IN EFFECT

The final regulations in support of the Pregnant Workers Fairness Act (PWFA) went into effect on June 18, 2024.

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Some of the accommodations that the final rule presumes to be reasonable absent an especially significant justification for denying the accommodation, including allowing pregnant employes to: 

• Take breaks to eat and drink;
• Keep water nearby;
• Use the restroom as needed; and
• Sit or stand as needed

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The rule also places a number of limitations for when employers can require supporting documentation in order for employees to request or receive accommodations under the rule, allowing employers to request such documentation only when it is reasonable under the circumstances.

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The final rule also requires accommodations for medical appointments, and defines certain terms broadly enough to require accommodations for medical care involving fertility, contraception, and situations when pregnancies abruptly end whether willfully or not. 

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You can find the final rule here.

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2023 EEO-1 Component 1 Submissions NOW PAST DUE

Final deadline for EEO-1 Component 1 submissions was June 4, 2024 - so those are past due if not yet submitted

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This filing must be submitted by every company that has 100 or more employees across all locations and/or is affiliated with a company that has 100 or more employees through common ownership or centralized management. 

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Further, this filing must also be submitted by any company with 50 employees or more that has a contract with the federal government worth at least $50,000 or has an establishment that holds a federal contract worth at least $50,000. 

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Companies or establishments thereof that are federal contractors and serve as depositories of federal funds no matter how much or how little, as well as financial entities that are issuing and paying agents for US Savings Bonds and Savings notes must also submit this form.

Check the Equal Opportunity Employment Commission (EEOC) website for more information.

 Editor's Note: This report is based on survey data from May 2024 that was published in June 2024. This is the most recent data available. (Source: Bureau of Labor Statistics)

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Despite the fact that US employers added 272 thousand jobs last month, which was almost 50% above the predicted number of job additions, those gains were essentially spread across 7 states and Washington DC. 

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As the national unemployment rate ticked up by one-tenth of a point to 4% for the first time in more than 2 years, ending the longest streak of unemployment levels sustained below 4% since a substantial portion of the US workforce were serving in Vietnam, 4 states actually saw their unemployment rates go down last month while only 3 states reported an unemployment rate increase. 

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In total, 5 states plus Washington DC have unemployment rates above the national average of 4% while 24 states have unemployment rates that are below the national average, while the remainder are essentially in line with the US figure.

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Below is the breakdown of the Bureau of Labor Statistics’ (BLS) market employment summary for June 2024.

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States With the Highest Unemployment Rates

Washington DC had the highest unemployment rate last month at 5.3%, which is up slightly from the 5.2% unemployment DC recorded the month before. 

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After 3 straight months with the highest unemployment rate, California had the second highest unemployment rate last month at 5.2%, which is down one-tenth of a point from the month before, followed by Nevada at 5.1% and Washington state at 4.9%, neither of which saw any meaningful change over the month. 

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Last month, only 3 states saw their unemployment rates climb - Ohio (plus 0.2%), Kansas (plus 0.1%), and Massachusetts (plus 0.1%).

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Over the last 12 months, 34 states in total have seen their unemployment rates increase, led by Rhode Island at plus 1.7%, Washington state at plus 1.1%, and Connecticut at plus 1%.

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States With The Lowest Unemployment Rates

North Dakota and South Dakota have had the lowest unemployment rates for 5 months in a row, holding steady at 2% as of the latest report.

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Vermont had the next lowest unemployment rate last month at 2.1%, followed by Nebraska and New Hampshire at 2.5%, each. 

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Last month, 4 states recorded a decrease in unemployment rate, led by Arizona at minus 0.2%, followed by California, Maine, and Virginia at minus 0.1% apiece.

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Over the last year, only Arizona and Maryland have recorded net reductions in their unemployment rates, both dropping 0.3%. 

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States With New Job Losses

No states saw statistically significant job losses last month/year.

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States With New Job Gains

In total, 8 states recorded a net increase in jobs over the month.

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California added the most jobs in terms of raw numbers with a net increase of almost 44 thousand, followed by Texas at just under 42 thousand net jobs, and Ohio at about 21 thousand.

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In terms of percentage job growth, Idaho led the way at plus 0.9%, followed by Washington DC at plus 0.6%, and New Jersey, Ohio, and Washington state at plus 0.4% each. 

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Over the last year, Texas, Florida, and California added the largest number of net jobs, while the biggest percentage gains went to Alaska, South Carolina, New Jersey, and Idaho which all saw their payrolls increase by more than 3%. 

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Mployer Advisor’s Take: 

Inflation continued to fall last month, and expectations for this Friday’s inflation update are quite promising, specifically with regard to the metrics that the Federal Reserve favors.

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As a result, many economists and Fed-watchers believe that the odds of an interest rate cut before the end of 2024 are creeping up again.

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Given some of the inflationary resurgence we’ve seen in recent months, however, even though those spikes were small and short-lived, the Fed probably won’t be cutting rates when they next meet toward the end of July, even if the forthcoming report is as positive as expected.

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Perhaps worse, additional inflationary pressure from increased shipping costs may become a bigger problem before the Fed gets another opportunity to cut rates before year’s end. 

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Shipping cost increases as a result of pandemic-related supply chain issues were a significant driver of inflation in 2021 and 2022, and those costs are now 5 times higher than they were last year, in part due to military conflict centering on Russia/Ukraine and Israel/Palestine causing shipping traffic from Asia to Europe to reroute all the way around Africa.

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Further, there is a current shortage of shipping vessels relative to the demand for their services and the holiday shopping surge is primed to become more impactful beginning in just a couple months. 

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While the current shipping rates in 2022 and 2023 were still about twice as expensive as they are now, the resulting inflation may very well be enough to encourage the Fed to keep the rates where they currently are for the remainder of the year nonetheless. 

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Plenty of new cargo ships are apparently being built to address the heightened demand, which will help release some of the inflationary pressure that is currently building up, but even a great inflation report later this week may not be enough to see rates come down in the near future.

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As always, we will check back in as more data becomes available. 

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Looking for more exclusive content? Check out the Mployer Advisor blog.

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Key Takeaways

• A new rule from the Consumer Financial Protection Bureau (CFPB) will make it illegal to take most medical debt into account when calculating credit scores

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• Currently about 1 out of 10 US adults have medical debt weighing down their credit scores, about half of whom are insured through their employer

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• The new rule will not eliminate or affect any of the underlying debt, that debt is simply removed from the credit scoring process

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• Comments on the proposed rule will run through August 12th, 2024 after which regulators may revise the rule before (likely) enacting the final rule sometime in early 2025

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• The largest impacts may be enhanced borrowing power and strengthened housing stability, which employers can complement with employee benefits like bundled moving service discounts, down payment/deposit assistance programs, and/or relocation bonuses to help employees take advantage of their improved access to real estate, whether buying or renting

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ARTICLE | New Federal Rule Proposal Aims To Remove Medical Debt From Credit Scores

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A little over a week ago, the Biden administration took a major step toward removing medical debt from credit reports.

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According to the most recent data available, as many as 1 in 5 US households carry some amount of medical debt - including a little more than 1 in 10 US households that are covered by private insurance - so the scope of the issue is substantial.

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Further, the majority of medical debt is carried by people insured through their employers, and medical debt has been shown not only to affect the mental health and work product of current employees, but it can also shrink the talent pool for prospective hires by making it more difficult for otherwise qualified applicants to obtain work through no fault of their own.

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While the reception to the proposed legislation has been largely positive (especially among people with medical debt), other interested parties (especially those benefiting from and tasked with the collection of medical debt) are concerned that the negative unintended consequences may ultimately outweigh the positive outcomes that the new rule is being implemented to achieve.

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• Who: The proposed rule is a product of the Consumer Financial Protection Bureau and was jointly announced by the head of the CFPB alongside Vice President Harris.

• What: The proposed rule bans credit reporting agencies from considering medical debt that was incurred in exchange for health care services, including both future medical bills and past medical bills that are affecting current credit scores today. The rule also applies to both bills from traditional medical care as well as dental care bills. People who pay for medical care using a credit card, however, would still see their credit scores affected as a result of the increased credit card liability.

• When: Before the rule takes effect, there will be a public comment period set to run through mid-August, during which time people and advocacy groups with relevant perspectives of all kinds are welcomed to share their input so that regulators can take that information and/or perspective into account when polishing the final rule before it is ultimately implemented early next year.

• Why: Medical debt can be an economic drag that restricts access to housing and prohibits commercial borrowing and/or forces borrowing at higher interest rates by mischaracterizing its holders as more of a credit risk than they consistently prove to be, which limits the economic opportunities available to them both to their individual and our collective detriment.

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The rule has to make it through public commentary and post-public-commentary revisions before being enacted and having any real practical impacts, but should the rule ultimately take effect sometime next year, the largest practical impact for affected people (including employees with medical debt) is likely to be improved housing stability.

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Proactive employers looking to optimize employee benefits offerings may wish to get ahead of the competition by providing complementary benefits to accompany the newfound borrowing power of affected employees by offering bundled moving service discounts, down payment/deposit assistance programs, and/or relocation bonuses

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Medical Debt By The Numbers

According to the most recent data from the Kaiser Family Foundation, people in the US owe approximately $220 million in medical debt, with the average US household holding a little less than $5 thousand each.

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That average can be a bit misleading, however, given how concentrated much of that debt is among a relatively smaller number of people, with about 14 million people (6% of adults in the US) owing more than $1 thousand dollars in medical debt while about 3 million people (1% of US adults) owing more than $10 thousand.

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The distribution of medical debt varies by sex as well, given that about 12.% of women hold medical debt while about 9% of men do.

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The CFPB forecasts that the proposed rule will increase the credit scores of people with medical debt by an average of 20 points, which could lead to as many as 22 thousand more people qualifying for mortgages each year.

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Some medical debt will nonetheless have an indirect negative effect on credit scores, given that nearly 1 out of 4 people with medical debt has used a credit card to pay for some of all of the amount due for medical services rendered according to a recent study from the Urban Institute, so those charges will still impact credit scores even if/when the new rule is enacted.

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Recent History

Though major strides have been made over the last few years in terms of reducing the number of people negatively impacted by medical debt in credit reporting, this latest development is poised to finish the job and completely decouple healthcare expenses from credit viability assessment.

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While more than 100 million people had some amount of medical debt on the books as recently as 2020, data from the CFPB indicates that number has shrunk to as few as 15 million people over the last couple of years as a result of the efforts of state governments, credit ratings agencies, and previous actions taken by federal regulators.

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For example, last year the three largest credit reporting agencies announced that they would no longer include certain types of medical debt information in their credit reporting analysis, including bills that had already been paid off in their entirety as well as any debts amounting to less than $500 dollars.

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Also, some states have enacted laws that have significantly reduced the number of people with medical debt negatively impacting their credit scores, including Colorado and New York, both of which outlawed taking medical debt into account on credit reports in 2023.

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New Rule: Point & Counterpoint

Proponents of the new rule highlight previous research from the CFPB that shows medical debt to be of poor analytical value when it comes to predicting the creditworthiness of a loan applicant in the first place.

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That analysis showed that study participants who had medical debt go into collections were significantly more likely to pay back their debts than other debtors with similar credit scores, and that medical debtors were in fact about as likely to repay their debts as people with credit scores that were 16 to 22 points higher.

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In effect, banning the use of medical debt when calculating credit scores is not only a step toward fairness, but it will also improve the accuracy and therefore the economic value of those scores overall.Proponents and opponents of the new regulation alike might both point to the analysis done by KFF Health News which indicates that potential damage to debtors’ credit scores is the most prevalent tactic used by medical debt collectors in securing payments.

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Opponents, however, would also ask if the most effective debt-collection measure currently available is no longer allowed, how will medical care providers respond? Many may turn to requiring credit cards with sufficient limits on file before rendering services and some may simply require payment in advance of providing service, which has problematic implications for low-income patient equity as well as for emergency care more generally.

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Mployer Advisor’s Take

Banning the inclusion of medical debt in credit score calculations doesn’t make the underlying debts disappear, and it won’t end the practice of businesses garnishing employee wages on behalf of medical debt collectors, but it will improve the borrowing power of some of the people carrying those debts.

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Clearly, the critical levels of medical debt held by people in this country will continue creating issues that go well beyond those associated with negative credit scores, so even if the final rule is ultimately enacted and substantially resembles the proposed one, there are a lot of medical debt-related problems that will go on affecting both employees and their employers just the same.

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Still, the importance of the proposed rule shouldn’t be diminished, as there are concrete benefits that can be expected if a comparable final rule is in fact successfully enacted, headlined by strengthened housing stability for medical debt holders, which should be significantly improved given the negative impact that low credit scores can have on both renting and buying property.

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But in order to meaningfully address the larger underlying issue of the debt itself, rule makers acknowledged that the proposed rule is just a starting point and explicitly encouraged state and local lawmakers to take further action by buying up and forgiving more existing medical debt and incentivizing greater debt forgiveness (and less aggressive collection efforts/tactics) on the part of local hospitals and providers.

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Unless and until there is a major overhaul of the US health system, medical debt is likely to remain a significant issue in this country, and while we remain miles away from resolving the underlying issue, this newly proposed rule from the CFPB is a meaningful step toward removing one of the major accompanying hurdles associated with medical debt, which is an important step to take.

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