As expected, Maryland Governor Larry Hogan vetoed HB 1, which effective January 1, 2018, would have required employers of 15 or more employees to provide paid sick leave to their employees. Employers of 14 or less employees would have been required to provide unpaid sick leave to their employees. Legislators continue to pledge to override this veto at the start of the 2018 legislative session (or sooner, if a special session is called later in 2017).

See Tax Alert 2017-729 for more information on HB 1.

The governor reiterated that he had proposed his own version of paid sick leave that would require employers of 50 or more employees to provide full-time employees with 40 hours of paid sick leave per year and part-time employees with 30 hours of paid sick leave. (HB 382, SB 305)

"We cannot afford to turn back to the failed job-killing policies of the past. Our administration fully supports paid sick leave benefits for Marylanders, but we cannot and will not support this job-killing bill passed by the legislature, which would hurt the very workers that they are pretending to want to help," said Governor Hogan. "The refusal of legislative leaders to meet us halfway, to negotiate with us, or to try to reach a compromise represents the very kind of politics that people are completely fed up with."

Governor takes immediate action to further paid sick leave benefits to Marylanders

In addition to urging lawmakers to come together by January 2018 to pass a compromise version of paid sick leave, the governor issued three executive orders that he described as "immediate action to advance the cause of common sense paid sick leave."

Preference for state contractors providing paid leave

By December 1, 2017, each state department, agency, authority, board, or instrumentality controlled by the governor's office is required to conduct a comprehensive review of its procurement, guidelines, and regulations to determine whether they can be modified or expanded to grant a procurement preference to bidders that provide paid leave to employees.

After their review, and to the extent permitted by law, each state department, agency, authority, board, or instrumentality is required to modify or expand its procedures, guidelines, or regulations to grant a preference to bidders that provide paid leave to employees (1) working in the performance of the state contract or subcontract; (2) who regularly work at least 30 hours per week; and (3) are employed at least 120 days during a 12-month period. (Executive Order 01.01.2017.10.)

Committee on paid sick leave

A committee is formed with the task of collecting data and information for the purpose of assessing Maryland workers' access to paid leave and the extent to which providing such leave would impose burdens and hardships on Maryland businesses. To this end, the committee is instructed to survey employers and workers across Maryland to understand needs, challenges, and opportunities connected with paid leave. Based on this data, the committee is charged with developing recommendations for policy, regulations, or legislation that would achieve an optimal balance of providing access to and enforcing paid leave without causing detrimental economic effects that could cost Maryland workers their jobs or deprive them of other beneficial economic opportunities.

The Department of Labor, Licensing and Regulation is required to submit a report to the governor with its finding and recommendations before December 1, 2017. (Executive Order 01.01.2017.08.)

Paid leave for state workers not already covered

Effective immediately, paid leave is extended to all contractual employees of the executive branch not currently receiving paid leave benefits and the legislative and judicial branches are encouraged to do the same. (Executive Order 01.01.2017.09.)

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