H.F. 2135 Section 1. Section 91.4, subsection 5, Code 2009, is amended 1 to read as follows: 2 5. The director of the department of workforce development, 3 in consultation with the labor commissioner, shall, at the time 4 provided by law, make an annual report to the governor setting 5 forth in appropriate form the business and expense of the 6 division of labor services for the preceding year, the number 7 of disputes or violations processed by the division and the 8 disposition of the disputes or violations, and other matters 9 pertaining to the division which are of public interest, 10 together with recommendations for change or amendment of the 11 laws in this chapter and chapters 88, 88A, 88B, 89, 89A, 89B, 12 90A, 91A, 91C, 91D, 91E, 91F, 92, and 94A, and section 85.68, 13 and the recommendations, if any, shall be transmitted by the 14 governor to the first general assembly in session after the 15 report is filed. 16 Sec. 2. Section 91A.2, Code 2009, is amended by adding the 17 following new subsection: 18 NEW SUBSECTION . 6A. “Paid time off” means a benefit 19 provided by an employer that allows an employee to take time 20 off from work with pay without regard to the reason the 21 employee chooses to take the time off. 22 Sec. 3. Section 91A.2, subsection 7, paragraph b, Code 2009, 23 is amended to read as follows: 24 b. Vacation, holiday, paid time off, sick leave, and 25 severance payments which are due an employee under an agreement 26 with the employer or under a policy or practice of the 27 employer. 28 Sec. 4. Section 91A.4, Code 2009, is amended by striking the 29 section and inserting in lieu thereof the following: 30 91A.4 Employment suspension or termination —— how wages are 31 paid. 32 1. An employee’s employer shall pay all wages earned by the 33 employee up to the time of the suspension or termination, less 34 any lawful deductions specified in section 91A.5, no later than 35 -1- LSB 5451YH (8) 83 ak/rj 1/ 5

H.F. 2135 the next regular payday after suspension or termination, except 1 as follows: 2 a. Earned wages that are the difference between a credit 3 paid against wages determined on a commission basis and the 4 wages actually earned on a commission basis shall be paid 5 by the employer not more than thirty days after the date of 6 suspension or termination. 7 b. If while employed, an employee earned paid time off 8 but did not earn vacation, an employer may reduce pay for 9 accumulated paid time off by up to one-third. 10 c. If while employed, an employee earned both vacation pay 11 and paid time off, no payment for accrued paid time off is 12 required. 13 2. An employer shall not adopt a policy or practice of 14 denying payment for vacation or for paid time off upon the 15 suspension or termination of an employee’s employment unless 16 the employee’s employment was terminated by the employer for 17 misconduct as defined in 871 IAC 24.32(1)“a”, as set forth in 18 section 96.5, subsection 2. 19 3. Except as provided in subsection 1, upon suspension or 20 termination of an employee’s employment, the amount of pay owed 21 for accrued paid time off or accrued vacation shall be the 22 amount of pay the employee would have received if the employee 23 had not been suspended or terminated and had begun taking the 24 total amount of accrued paid time off or accrued vacation on 25 the date the suspension or termination occurred. 26 Sec. 5. NEW SECTION . 91F.1 Definitions. 27 1. “Employee” means as defined in the federal Fair Labor 28 Standards Act of 1938, 29 U.S.C. ch. 8, as amended to January 29 1, 2007. 30 2. “Employer” is defined as in the federal Fair Labor 31 Standards Act of 1938, 29 U.S.C. ch. 8, as amended to January 32 1, 2007. 33 3. “Family member” means any of the following: 34 a. An employee’s spouse or domestic partner. 35 -2- LSB 5451YH (8) 83 ak/rj 2/ 5

H.F. 2135 b. A child, foster child, stepchild, legal ward, a child of 1 a domestic partner, or a child to whom the employee stands in 2 loco parentis. 3 c. A parent, foster parent, stepparent, legal guardian of 4 an employee, or a person who stood in loco parentis when the 5 employee was a minor child. 6 d. A sibling, foster sibling, stepsibling, or spouse or 7 domestic partner of a sibling, foster sibling, or stepsibling. 8 Sec. 6. NEW SECTION . 91F.2 Paid sick leave and paid time 9 off —— additional uses. 10 1. An employer who provides employees with paid sick leave 11 or paid time off, as defined in section 91A.2, shall permit 12 employees to use the accrued paid sick leave or paid time off 13 for the following nonexclusive purposes: 14 a. For prenatal care and maternity leave. 15 b. To care for a family member with mental or physical 16 illness, injury, or health condition who needs medical 17 diagnosis, care, or treatment for the mental or physical 18 illness, injury, or health condition, or who needs preventative 19 medical care. 20 2. This chapter shall not be construed to discourage or 21 prohibit an employer from adopting or maintaining a paid sick 22 leave or paid time off policy that permits employees to use 23 accrued paid sick leave or paid time off for purposes other 24 than enumerated in subsection 1. 25 3. This chapter shall not be construed as diminishing 26 the obligation of an employer to comply with any contract, 27 collective bargaining agreement, employment benefit plan, or 28 other agreement that permits employees to use accrued paid sick 29 leave or paid time off for purposes other than enumerated in 30 subsection 1. 31 4. This chapter shall not be construed as diminishing the 32 rights of public employees regarding paid sick leave or paid 33 time off or use of paid sick leave or paid time off as provided 34 by law. 35 -3- LSB 5451YH (8) 83 ak/rj 3/ 5

H.F. 2135 Sec. 7. EFFECTIVE UPON ENACTMENT AND APPLICABILITY. This 1 Act takes effect upon enactment. The sections of this 2 Act amending chapter 91A apply only to the suspension or 3 termination of an employee’s employment that takes place on or 4 after the effective date of this Act. 5 EXPLANATION 6 This bill provides employee leave by providing for time off 7 and sick leave. 8 The bill relates to payments for accrued vacation time and 9 for accrued paid time off for all employees who are terminated 10 or suspended. 11 Current law requires an employer to pay accrued vacation pay 12 to a terminated or suspended employee only if the employer has 13 a policy, procedure, or contract that requires the employer to 14 do so. 15 The bill defines “paid time off” as a benefit allowing an 16 employee to take time off from work with pay without regard to 17 the reason the employee chooses to take the time off. “Paid 18 time off” is also added to the definition of “wages”. 19 The bill provides that if an employee is suspended or 20 terminated upon request the employer must pay all wages, now 21 including paid time off, earned by the next regular payday. 22 The bill provides an exception for when an employee who earned 23 paid time off while employed but not vacation, the employer 24 may reduce the pay for the accrued paid time off by one-third. 25 Finally, there is an exception for when an employee earned both 26 vacation and paid time off while employed, the employer is not 27 required to make payment for the paid time off. 28 An employer shall not adopt a policy or practice to deny 29 payment for accrued vacation or accrued paid time off upon the 30 suspension or termination of an employee unless the employee’s 31 employment ended due to misconduct. Misconduct is not defined 32 in statute but is defined in the department of workforce 33 development’s administrative rules. 34 The bill provides a formula to calculate the payment for an 35 -4- LSB 5451YH (8) 83 ak/rj 4/ 5

H.F. 2135 employee’s accrued paid time off or vacation if the employee is 1 suspended or terminated. Except as otherwise provided by the 2 formula, the amount of pay owed to an employee is the amount of 3 pay equal to the accrued vacation or paid time off as if the 4 employee began taking the vacation or paid time off the day the 5 suspension or termination took place. This formula substitutes 6 the pro rata policy for how accrued vacation is currently paid 7 out if an employee’s policy or practice required it. 8 The bill includes new Code chapter 91F, which provides that 9 employers who provide paid sick leave and paid time off to 10 employees shall allow sick leave or paid time off to be used 11 for prenatal care and maternity leave and to care for family 12 members. “Family member” is defined in the new Code chapter. 13 The new Code chapter does not prohibit an employer from 14 providing a more generous paid sick leave or paid time off 15 policy; it does not diminish an employer’s previous contractual 16 obligations for more generous paid sick leave or paid time off; 17 and it does not diminish public employees’ rights to paid sick 18 leave or paid time off as provided by law. 19 The bill takes effect upon enactment. The sections of the 20 bill that would affect chapter 91A are made applicable only to 21 the suspension or termination of an employee’s employment that 22 occurs on or after that date. 23 -5- LSB 5451YH (8) 83 ak/rj 5/ 5