On August 20, 2019, the Bernalillo County, New Mexico Commissioners enacted the "Employee Wellness Act," which, though originally styled as a paid sick leave law, as amended requires covered employers to provide paid time off (PTO) that employees can use for any reason. The ordinance, effective July 1, 2020, becomes the first generally applicable local mandatory PTO law, continuing a trend recently created at the state level in Maine and Nevada.

Covered Employers and Employees

The ordinance applies to employers that must apply for a county business registration with at least two employees and a physical premise in the county's unincorporated limits. Additionally, a new local business with its principal office or place of business in the county's unincorporated limits is exempt for the first 12 months of operation. Of significant note is that the ordinance does not cover employers located in incorporated communities such as Albuquerque, Los Ranchos de Albuquerque, and Tijeras. However, two Albuquerque city councilmembers have called for the city to "initiate an economic analysis to determine the feasibility of adopting the recently passed Bernalillo County paid leave ordinance in the City of Albuquerque."

To be covered, an employee must work at least 56 hours in a year in the county's unincorporated limits, regardless of whether they are a full-time, part-time, seasonal, or temporary employee. However, the ordinance contains numerous exceptions*:

• *Individuals employed in a bona fide executive, administrative or professional capacity and forepersons, superintendents and supervisors;
• *Individuals engaged in the activities of an educational, charitable, religious or nonprofit organization where the employer-employee relationship does not exist or where the services are voluntarily rendered to the organizations;
• *Students regularly enrolled in primary or secondary schools working after school hours or on vacation;
• Interns working for academic credit in connection with a course of study at an accredited school, college or university or work-study program participants;
• *Certain seasonal employees and disabled individuals who have received a certificate from the state labor commission;
• Interns working for an employer for academic credit or pursuant to a work-study program;
• Independent contractor or per diem employees; and
• Individuals employed by a parent, spouse, sibling, aunt, uncle, or cousin.

*The ordinance exempts any person who is excluded from the definition of employee under New Mexico's Minimum Wage Act; specifically, section 50-4-21(C)(2)-(4), (6), and (11). Changes to section 50-4-21 took effect on June 14, 2019, and further amendments will take effect on January 1, 2020. The ordinance does not identify which version of section 50-4-21 it references. However, based on references to employees with state labor commission-issued certificates, it appears the county intends to use the pre-June 14, 2019 version. It is hoped the county will clarify this issue.

Notably, the ordinance does not delay the law's applicability for employees covered by a collective bargaining agreement or allow these employees to waive all or parts of the law's requirements.

Accrual and Carryover of Earned Paid Time Off

Earned paid time off (EPTO) begins to accrue on an employee’s 90th day of employment or on the law's effective date, whichever is later. This standard differs from most paid sick and safe time (PSST) or mandatory PTO laws, which require accrual to commence at the beginning of employment.

Employees must accrue one hour of EPTO for every 32 hours worked; again, this differs from the more common 1:30 or 1:40 accrual rates. Currently, no PSST or mandatory PTO law uses a 1:32 standard, though three PSST laws use a 1:35 accrual rate (Michigan; Pittsburgh, PA; Rhode Island). For accrual purposes, the ordinance assumes overtime-exempt employees work 40 hours per week; however, as noted above, the law does not apply to many overtime-exempt employees.

Beginning July 1, 2020, the permitted annual accrual cap is set at 24 hours, but will increase 16 hours per year, to 40 hours beginning July 1, 2021, and to 56 hours beginning July 1, 2022. Accrued but unused EPTO must carry over to the following year, but employers can limit carryover to the annual accrual cap. Although the ordinance states that employers can provide all EPTO at the beginning of the year, it does not address whether doing so relieves an employer of its carryover obligation.

Use of Earned Paid Time Off

Employers must permit employees to use EPTO accrued for any reason. There is no cap on the number of EPTO hours an employee may use in a year.

Aside from the 56-hour eligibility requirement, unless employers allow leave use earlier, employees cannot use EPTO until the 90th calendar day following the first date of employment or the ordinance's effective date, whichever is later. Practically speaking, on the 91st day of employment many employees will not have any EPTO available because accrual does not begin until 90th day of employment.

Another atypical provision concerns employers that offer separate paid sick and paid vacation leave. The ordinance provides that probationary periods in vacation or sick leave policies can exceed 90 days if the policies provide as much or more paid leave than the ordinance requires. It is unclear how narrowly or broadly the county will interpret this provision.

When employment begins, employers must instruct employees on the manner in which leave use requests must be made (orally, in writing, electronically, or by other means acceptable to the employer). It is unclear whether this information must be in a handbook or policy or whether employers can orally relay the information. Generally, employers must allow EPTO use if they receive a use request from an employee or a family member, caretaker, or medical professional acting on the employee’s behalf, which, if possible, must include the absence's duration. If leave use is foreseeable (e.g., scheduled medical appointments), employees must provide notice as soon as practicable and, if possible, schedule use in a manner that does not unduly disrupt the employer's operations. However, advance notice cannot be required if an employee uses leave for an emergency or an illness.

The ordinance does not address whether employers can request documentation to support an absence, and what documentation employers can request. It also does not address whether employers can require employees to verify absences without documentation. It does, however, state that information obtained related to EPTO use is confidential and that employers cannot disclose this information unless an employee consents or disclosure is necessary to validate insurance disability claims or ADA accommodation requests.

Paying Earned Paid Time Off During Employment and When Employment Ends

Employers must pay EPTO at the same hourly rate and with the same benefits, including health care benefits, employees normally earn. Otherwise, the ordinance does not address pay calculation methods concerning certain types of employees or situations, or say what employers can exclude when performing pay calculations. Additionally, the ordinance does not expressly state whether employers must pay out unused EPTO when employment ends. Given the reinstatement obligation for re-hired employees, however, payout does not appear mandatory. Still, employers that do not want to pay out unused PTO should address this in their policy to avoid a payout obligation under state law.

Employees Transferred, Rehired, or Hired by a Successor

The ordinance lumps together provisions concerning transferred and rehired employees, and employees hired by a successor employer. If the employee is transferred, rehired within 12 months of separation, or hired by a successor employer, employers must reinstate / provide up to 56 EPTO hours unless the employer paid out EPTO upon separation or transfer.

Prohibitions

Similar to PSST laws, the ordinance contains replacement worker, absence-control policy, and anti-retaliation provisions, i.e., an employer cannot:

• Require an employee to find a replacement worker as a condition of using EPTO;
• Count EPTO use in a way that will lead to discipline, discharge, demotion, non-promotion, suspension or any other adverse action; or
• Take or threaten adverse action against employees for attempting to or actually exercising protected rights or making good-faith allegations that a violation occurred.

Notice, Posting and Recordkeeping

When employment begins, employers must provide notice to each employee of the following:

• Entitlement to EPTO, the amount of EPTO provided, and its terms of use;
• How and to whom employees submit EPTO requests or notification;
• Statement that retaliation for requesting or using EPTO is prohibited; and
• Statement explaining employees have the right to file a complaint with the county.

Employers may comply with this notice requirement by conspicuously displaying a poster at their place of business with the required information in both English and Spanish, though the county may establish additional requirements.

For at least four years in addition to the current calendar year, employers must track and record EPTO accrued or used each pay period in any format they choose. If an employer does not keep records, the county or a judge can use employees' accurate and contemporaneously maintained records of work time, or their reasonable estimates of hours worked, to establish liability.

Upon an employee’s request, an employer must inform an employee of the amount of EPTO accrued and used. Although the ordinance does not contain a paystub reporting requirement, state law requires that when employers pay wages they must provide a written receipt that identifies "benefits earned.” Though state law does not define "benefits earned," this requirement could be construed to include EPTO.

Enforcement, Penalties and Damages

Covered employees or their representative must file an administrative complaint with the county, but the ordinance does not establish a timeframe for filing complaints. Within 180 days of the complaint-filing date, the county must issue a right-to-sue letter to the complainant if it has neither closed the complaint file nor filed a lawsuit on the complainant’s behalf. Only after exhausting administrative remedies, or receiving a right-to-sue letter, can covered employees or their representative file a lawsuit.

During the county's investigation, if it identifies a violation, it may attempt to reach an administrative resolution for payment of damages and penalties before filing a lawsuit. If a company does not comply with the county's notice of inspection within 45 business days, the county may suspend its business registration until it complies with the notice.

Violations are subject to a civil penalty payable to the county of $50 per week for each separate violation, not to exceed a maximum of $500 for each offense (each section violated, and each employee whose rights employers violate, is a separate offense). Additionally, employees can recover all appropriate legal or equitable relief, reasonable attorney's fees, costs and expenses. Additionally, for retaliation or adverse action violations, employees can recover actual damages, reinstatement, rescission of discipline, or other appropriate relief.

Unresolved Issues

In addition to issues identified above, other ambiguities the enforcement agency may address via FAQ or regulations include:

• How does a business determine whether it is located in an unincorporated area?
• How much leave can employees use, and what is the minimum amount of EPTO employees can, or must, use for an absence?
• Given that EPTO can be used for vacation, what constitutes an undue disruption of the employer’s operations?
• What constitutes a foreseeable absence other than medical appointments, and can employers continue to use existing practices for requesting vacation?
• Whether and when employers can require employees to verify, or provide documentation supporting, an absence.
• How to calculate the rate of pay for, e.g., employees that earn commissions, what can be excluded from pay rate calculations, and the date by which employers must pay EPTO.
• Which agency will enforce the law?

Next Steps

Employers with operations in the county's unincorporated areas should monitor the county's website for updates. Businesses may prefer waiting to review and revise policies and practices until the county clarifies standards, given the numerous unanswered questions raised by, or unclear requirements in, the ordinance. Notwithstanding that the law’s effective date is nearly a year away, employers should consider consulting with knowledgeable counsel concerning how the ordinance might affect their policies, practices, and procedures.