As we last reported in our Client Alert “Check-up on Missouri Proposition A — Paid Sick Time” the fate of the Paid Sick (and Safe) Time (PSST) portion of Prop A is very much in flux given a constitutional challenge before the Missouri Supreme Court, and the Missouri Legislature’s efforts to repeal or revise it. [1]
On April 29, the Missouri Supreme Court ruled that there was no election irregularity with regard to the passage of Prop A, and the election results are valid. Additionally, the Missouri Supreme Court held that it lacked original jurisdiction to consider the additional (and more compelling) argument that Prop A is invalid because it violates the “single subject” and “clear title” requirements of the Missouri Constitution. That portion of the challenge was dismissed without prejudice – meaning that it may be filed in a lower Circuit Court that would have original jurisdiction to consider those arguments.
Thus, Missouri Prop A remains in effect in the form that voters passed it on the November ballot. Consequently, barring some further action by the Legislature or a lower court, employers must begin tracking their Missouri employees’ accrual and use of Paid Sick (and Safe) Time beginning May 1, as specifically required by Prop A.
The Court’s decision likely will put more pressure on the Legislature to act. Although the House passed HB 567 in March to repeal the law in its entirety, that bill has been stuck in the Senate. As of the writing of this post, the Senate is actively negotiating a substitute that would revise, but not repeal entirely, the Paid Sick (and Safe) Time provisions of Prop A. The specifics of any such compromise are a moving target. It is possible (but unlikely) that if those negotiations fail, proponents of total rescission could invoke a very rarely used “nuclear option” – “Moving for the Previous Question” and shove the total rescission through the Senate.
If a substitute/compromise bill passes in the Senate, because it would differ from the bill the House already passed, the House would have to vote again to adopt the compromise version. Moreover, unless an “Emergency Clause” is separately approved by a 2/3 majority in both the House and Senate, whatever version of the law were to pass would not be effective until August 28, 2025.
The Bottom Line
Any variation of these options (or nothing) could happen between now and the end of the regular legislative session at 6:00 p.m. on May 16. Therefore, employers with employees in Missouri should begin accruing Paid Sick (and Safe) Time for Missouri employees at the rate of 1 hour of PSST for every 30 hours worked, up to a maximum of 40 hrs./yr. for employers with fewer than 15 employees; and up to a maximum of 56 hrs./yr. for employers with 15 or more employees) starting May 1, 2025.
Assuming the version of Prop A voters passed stays in effect, it is rife with ambiguities and unanswered questions. The Department of Labor and Industrial Relations is empowered, but not required (or funded) to adopt rules interpreting the PSST provisions of Prop A. For now, the Department’s FAQs merely repeat the (ambiguous) language of the Proposition. (And can they reasonably be faulted for not undergoing the rulemaking process in light of the serious questions whether the law will become or remain effective?)
Some of The Open Questions Include (But Are Not Limited to) The Following
- Prop A requires up to 80 hours of earned paid sick time shall be carried over to the following year if the employee has any unused accrued earned paid sick time at the end of the year. (290.603(4)(C).)
- Is that a maximum 80 hours’ carryover? Or could it stack one year on top of another?
- Please keep in mind that although there are no caps on accrual, there are caps on USE of MoPSST. Problems could be serious, however, for employers that (voluntarily) pay out unused PTO on separation.
- Is that a maximum 80 hours’ carryover? Or could it stack one year on top of another?
- Given that the law requires employers to accrue 1 hour of PSST for every 30 hours worked, are we assured that salaried/exempt employees can be limited to accruals based on a 40/hr workweek – even if they can demonstrate they worked more? We think the answer should be clear – but is it too good to be true?
- Prop A expressly states, “For determining total number of hours worked during the previous pay period, employees who are exempt from overtime requirements under 29 U.S.C. § 213(a)(1), the Fair Labor Standards Act, shall be assumed to work 40 hours in each work week unless their normal work week is less than 40 hours, in which case earned paid sick time shall accrue and the same hourly rate shall be calculated based on the employee’s normal work week.”
- It says exempt employees “shall” be “assumed” – not “presumed” — to have worked 40 hours in each workweek.
- Do the Paid Sick (and Safe) Time provisions apply to employees who are employed by an out-of-state employer, but work remotely from their homes in Missouri for some or all of their work week?
- Prop A defines “employee” as “any individual employed in this state by an employer.” There are currently no implementing regulations or other guidance to interpret whether this definition applies to remote workers who work from their homes in Missouri.
- Out of an abundance of caution, some employers are interpreting this provision as applying to remote workers in Missouri.
These are but several of the many important questions raised, but unanswered, by the current version of Prop A. A compromise version may deal with some of these questions (and may present others). Employers with Missouri employees are wise to work with counsel to quickly determine their risk tolerance and tailored approaches to navigating this fraught and changeable situation.
We will continue to monitor these rapidly changing developments and will update you accordingly. In the meantime, stay tuned and stay nimble!
[1] Prop A also includes a separate provision increasing the State minimum wage to $13.75, effective January 1, 2025 and modifying it yearly thereafter. The minimum wage component of Prop A is not further discussed in this Alert.