Missouri voters approved a measure (Proposition A) introducing minimum wage increases annually for the next two years and mandatory Paid Sick Time (PST) for private employers. Understanding the key details of Proposition A’s minimum wage increase and PST law is essential to ensure compliance. Below are key provisions of minimum wage increases and PST.
Minimum Wage Increases
Effective January 1, 2025, the first increase to minimum wage ($13.75 per hour) will take effect, and then to $15 per hour in 2026. Thereafter, the minimum wage will increase annually based on changes in the Consumer Price Index.
Paid Sick Time
Coverage and Eligibility
Most employees are eligible to earn PST, with some exceptions, including but not limited to those employed at an educational, charitable, or religious organization; or individuals employed by a retail or service business with annual gross sales less than $500K; or individuals employed for less than four (4) months in a year in a resident or day camp for children or youth.
Accrual and Use of PST
Existing employees will begin accruing paid leave on May 1, 2025, and those hired after this date will begin accruing on their first day of employment.
Employees will accrue PST at a rate of one (1) hour for every thirty (30) hours worked with no cap on accrual; however, employers may cap annual usage based on employer size as follows:
- 15 or More Employees: Cap usage to 56 hours per year.
- Less Than 15 Employees: Cap usage to 40 hours per year.
The number of employees is counted based on those working in Missouri only for 20 or more calendar weeks.
Alternatively, employers may frontload PST at the beginning of the year, which must equal the amount expected to be accrued throughout the year.
The “year” can be a regular, consecutive 12-month period determined by the employer.
Carryover Requirements
Employees must be allowed to carry over at least 80 hours of unused PST from one year to the next, but employers may cap an employee’s annual usage of PST to the annual maximum accrual of 40 or 56 hours. If an employer chooses to frontload PST, they may pay out any unused PST at the end of the year instead of allowing carryover.
Increments of Use
Employees can use PST in hourly increments or the smallest increment that the employer’s payroll system uses for tracking absences.
Qualifying Reasons for Leave
Employees can use PST for various qualifying reasons, which include:
- Self-Care: For the employee’s own physical or mental health conditions, including treatment or preventive care.
- Family Care: For caring for a family member with health conditions requiring medical attention.
- Public Health Emergencies: In instances such as business closures due to public health orders or caring for a child whose school has been closed for the same reason.
- Safe Leave: For seeking services related to domestic violence, sexual assault, or stalking.
The definition of “family member” under Proposition A is broader than that in the federal Family and Medical Leave Act (FMLA), encompassing a wide range of relationships including children, parents, grandparents, siblings, and others for whom the employee provides care.
Employee Notice Requirements
When the need for PST is foreseeable, employers can require employees to provide advance notice and schedule their leave in a way that minimizes disruption. If the need is unforeseeable, employees must notify their employer as soon as practicable. Employers may request reasonable documentation for absences longer than three (3) consecutive workdays, but they cannot require details regarding the nature of the illness or the circumstances surrounding safe leave.
Employer Notice Requirements
Employers must provide written notice regarding PST to employees within 14 days of their start date or by April 15, 2025, whichever is later. This notice must inform employees of their rights under Proposition A, including accrual rates, protections against retaliation, and information on reporting violations. Employers must also post a notice which will be developed by the state containing the same information starting April 15, 2025.
Recordkeeping Requirements
Employers must retain records of hours worked and sick leave taken by employees for at least three years.
Combination with Paid Time-Off Policies
Employers with a paid time-off (PTO) policy that meets or exceeds the accrual requirements outlined in Proposition A and allows for the same uses specified in the law are not required to provide additional PST.
Payment at Separation
Employers are not required to pay employees for accrued unused leave at separation.
Next Steps
To ensure compliance with the minimum wage increase, employers should prepare to update payroll systems, communicate with employees, and adjust budgets so employers can ensure a smooth transition to the new minimum wage rates.
Regarding PST, while it is expected that regulations will be forthcoming, employers should familiarize themselves with the full proposed ballot measure to ensure they are prepared to implement PST or update an existing PTO policy to meet the law’s requirements.
Employers should implement a policy that clearly outlines the accrual rates, eligible uses, carryover provisions, and documentation requirements. In addition, be prepared to adjust your payroll systems to accurately track the accrual and usage of paid sick leave, implement a recordkeeping system to maintain accurate records of employees’ sick leave balances, provide training for HR personnel and management staff on the law’s requirements, and ensure they understand and can effectively communicate them to employees.
