© 2025 American Payroll Institute, Inc.
March 24, 2025 Volume 27 Issue 6
FAQs Explain Missouri’s New Paid Sick Leave Law
The Missouri Department of Labor and Industrial Relations
(DLIR) recently published FAQs on the new paid sick leave
(PSL) program that will take effect on May 1, 2025. The FAQs
cover topics that will help employers prepare to implement the
new program, including: employer and employee exemptions,
how to calculate accrual, and how to calculate the benefit rates
for various types of employees. The PSL program was passed as
a voter initiative in 2024 (see PAYSTATE UPDATE, Issue 23, Vol. 26).
Exemptions
Employer exemptions. Employers that have an annual
gross volume of sales or business that is less than $500,000
are exempted from providing PSL. In addition, the federal
government, state government, and political subdivisions
thereof are exempted. Political subdivisions include school
districts and public higher education institutions, among
other public entities. Small employers (those with fewer than
15 employees) are covered, although they are only required to
provide a lower accrual maximum to employees, as discussed
below.
Employee exemptions. Various types of workers are exempt
from the program, including: volunteers workers involved with
religious, charitable, or nonprofit organizations where there
is no employee-employer relationship youth camp workers
working for less than 4 months a year students who have their
tuition reimbursed by the educational institution for whom they
are working rail workers covered by federal law elected officials
and individuals working for small circulation newspapers.
Accrual
Effective May 1, 2025, employees will accrue 1 hour of PSL
for every 30 hours of work. The DLIR clarified that the 30 hours of
work do not have to be consecutive or worked within the same
workweek. Small employers are required to allow employees to
accrue and use up to 40 hours of PSL per year. Large employers
(those that employ 15 or more employees) are required to allow
employees to accrue and use up to 56 hours of PSL per year.
Employers may permit higher accrual limits.
Rollover and frontloading. Employees may roll over up to
80 hours of earned but unused PSL from one year to the next.
Employers can substitute the accrual and rollover requirements
by paying out all earned but unused PSL at the end of the year
and by providing the full yearly amount of PSL that the employee
would earn through accrual. Small employers can front load
40 hours of PSL for use at the beginning of the year, and large
employers can front load 56 hours.
Calculation of PSL benefits
Employees must be paid their hourly rate for each PSL hour.
However, employees that are not paid a fixed hourly rate for all
hours worked may present a difficulty for employers to calculate
the amount of PSL benefits due. The FAQs address how to make
these calculations.
Employees with multiple rates. The DLIR clarifies that
employers have multiple options for employees who earn
multiples rates of pay during a pay period. In calculating the
employee’s PSL benefits, the employer can pay the wage for
the exact hours that the employee would have worked if they
had not taken PSL. This means that the PSL benefits rate would
be the same rate(s) of pay that the employee was scheduled
to work. Alternatively, employers may calculate the weighted
average of all hourly rates paid in the last pay cycle and pay the
weighted average as the PSL benefit rate.
Piece rate, fees-for-service employees. For employees
paid by piece rate or by fees-for-service, the employer may use
a reasonable calculation for the services or fees the employee
would have earned if they had not taken PSL.
Salaried employees. To determine the hourly rate for a
salaried employee, employers must divide the wages paid to
the employee in the last pay cycle by the total hours worked by
the employee in the cycle. To determine the number of hours
worked, employers should use the lesser of 40 hours per week
or the employee’s normal workweek.
Tipped employees. Tipped employees must receive the
higher of their regular hourly rate or the state minimum wage.
Tips cannot be deducted from this rate.
Reminders for employers
By April 15, 2025, employers must provide a copy of the
PSL policy to employees. The policy must be on a single piece
of paper and contain the accrual rate, protections against
retaliation and the right to a civil action, and the contact
information for the DLIR. PSL records must be maintained for
3 years. Employers that already have a PSL policy in place do
not need to provide additional PSL as long as the prior policy
provides the same reasons for leave, accrual rate and amounts,
and benefits as state law.
Court Rules Employer Cannot Deduct Costs of Doing Business From Employee
The Colorado Court of Appeals ruled that an employer was in
violation of the state Wage Act when it deducted hair care
products from a cosmetologist’s wages [303 Beauty Bar LLC v.
Division of Labor Standards and Statistics, No. 24CA0548 (Colo.
App., 2-20-25)]. Although the employer had a written agreement
to make the deductions from the employee’s wages, the
deductions did not fall under the “goods or services” exception
because they did not primarily benefit the employee.
March 24, 2025 Volume 27 Issue 6
FAQs Explain Missouri’s New Paid Sick Leave Law
The Missouri Department of Labor and Industrial Relations
(DLIR) recently published FAQs on the new paid sick leave
(PSL) program that will take effect on May 1, 2025. The FAQs
cover topics that will help employers prepare to implement the
new program, including: employer and employee exemptions,
how to calculate accrual, and how to calculate the benefit rates
for various types of employees. The PSL program was passed as
a voter initiative in 2024 (see PAYSTATE UPDATE, Issue 23, Vol. 26).
Exemptions
Employer exemptions. Employers that have an annual
gross volume of sales or business that is less than $500,000
are exempted from providing PSL. In addition, the federal
government, state government, and political subdivisions
thereof are exempted. Political subdivisions include school
districts and public higher education institutions, among
other public entities. Small employers (those with fewer than
15 employees) are covered, although they are only required to
provide a lower accrual maximum to employees, as discussed
below.
Employee exemptions. Various types of workers are exempt
from the program, including: volunteers workers involved with
religious, charitable, or nonprofit organizations where there
is no employee-employer relationship youth camp workers
working for less than 4 months a year students who have their
tuition reimbursed by the educational institution for whom they
are working rail workers covered by federal law elected officials
and individuals working for small circulation newspapers.
Accrual
Effective May 1, 2025, employees will accrue 1 hour of PSL
for every 30 hours of work. The DLIR clarified that the 30 hours of
work do not have to be consecutive or worked within the same
workweek. Small employers are required to allow employees to
accrue and use up to 40 hours of PSL per year. Large employers
(those that employ 15 or more employees) are required to allow
employees to accrue and use up to 56 hours of PSL per year.
Employers may permit higher accrual limits.
Rollover and frontloading. Employees may roll over up to
80 hours of earned but unused PSL from one year to the next.
Employers can substitute the accrual and rollover requirements
by paying out all earned but unused PSL at the end of the year
and by providing the full yearly amount of PSL that the employee
would earn through accrual. Small employers can front load
40 hours of PSL for use at the beginning of the year, and large
employers can front load 56 hours.
Calculation of PSL benefits
Employees must be paid their hourly rate for each PSL hour.
However, employees that are not paid a fixed hourly rate for all
hours worked may present a difficulty for employers to calculate
the amount of PSL benefits due. The FAQs address how to make
these calculations.
Employees with multiple rates. The DLIR clarifies that
employers have multiple options for employees who earn
multiples rates of pay during a pay period. In calculating the
employee’s PSL benefits, the employer can pay the wage for
the exact hours that the employee would have worked if they
had not taken PSL. This means that the PSL benefits rate would
be the same rate(s) of pay that the employee was scheduled
to work. Alternatively, employers may calculate the weighted
average of all hourly rates paid in the last pay cycle and pay the
weighted average as the PSL benefit rate.
Piece rate, fees-for-service employees. For employees
paid by piece rate or by fees-for-service, the employer may use
a reasonable calculation for the services or fees the employee
would have earned if they had not taken PSL.
Salaried employees. To determine the hourly rate for a
salaried employee, employers must divide the wages paid to
the employee in the last pay cycle by the total hours worked by
the employee in the cycle. To determine the number of hours
worked, employers should use the lesser of 40 hours per week
or the employee’s normal workweek.
Tipped employees. Tipped employees must receive the
higher of their regular hourly rate or the state minimum wage.
Tips cannot be deducted from this rate.
Reminders for employers
By April 15, 2025, employers must provide a copy of the
PSL policy to employees. The policy must be on a single piece
of paper and contain the accrual rate, protections against
retaliation and the right to a civil action, and the contact
information for the DLIR. PSL records must be maintained for
3 years. Employers that already have a PSL policy in place do
not need to provide additional PSL as long as the prior policy
provides the same reasons for leave, accrual rate and amounts,
and benefits as state law.
Court Rules Employer Cannot Deduct Costs of Doing Business From Employee
The Colorado Court of Appeals ruled that an employer was in
violation of the state Wage Act when it deducted hair care
products from a cosmetologist’s wages [303 Beauty Bar LLC v.
Division of Labor Standards and Statistics, No. 24CA0548 (Colo.
App., 2-20-25)]. Although the employer had a written agreement
to make the deductions from the employee’s wages, the
deductions did not fall under the “goods or services” exception
because they did not primarily benefit the employee.
