A growing trend for benefits compliance is local laws to require employers to offer certain benefits. These laws often apply when an employer enters into a contract with a government entity, but these new laws will apply to employers with or without a government contract.
Requirements for employers to provide sick pay is one example of a growing trend. The city of Portland recently joined Connecticut, Jersey City, New York City, San Francisco, Seattle and Washington D.C. as jurisdictions in the United States that require employers to provide sick leave for certain employees. The requirement is also seen in many state legislative bills.
The Portland requirement passed by unanimous vote and is effective in 2014. It applies to private employers with at least six employees (full-time, part-time or temporary). The rules will require up to a maximum of 40 hours of paid sick leave to any employee who works in Portland for more than 240 hours in a year.
A difficult point of these rules is that the employer may not be within the Portland area, but the employee may still be subject to these rules. Particularly difficult situations can arise when an employee works from home or performs other business duties within the geographic area covered by these rules.
Because sick pay plans are generally not seen as ERISA plans, employers cannot argue these rules do not apply because of ERISA preemption. Rules that change from a geographic location of the employer or the employee are especially difficult for national or multi-state employers.