Many of our clients maintain offices, hire employees, and transact business in Rhode Island. Primarily, many focus on complying with Massachusetts law given their principal places of business. However, it is critical for employers to understand that transacting business in Rhode Island often triggers Rhode Island employment laws – even if employees work remotely from Rhode Island. This article addresses only a few of the employment-related landmines for employers operating in Rhode Island.
Common Issues Regarding the Rhode Island Wage Act
Like Massachusetts, Rhode Island maintains a comprehensive Wage Act that details employers’ obligations and employees’ rights with respect to their compensation. Below are a few critical considerations while operating in Rhode Island:
- Employers must pay wages within 9 days from the end of a payroll period, and hourly employees must be paid weekly (unless they qualify for a statutory exemption).
- Hourly employees who work on one of Rhode Island’s 10 legal holidays, must earn “time and a half” (unless they qualify for a statutory exemption).
- With separation, regardless of the reason, employers must pay the employee’s final wages on or before the next payroll period. If an employee has worked with the employer for more than 1 year, that employee must receive all accrued but unused vacation in the final paycheck.
- Payroll records must be maintained for at least 3 years.
- Tread extremely carefully with wage deductions (other than standard taxes and withholdings).
Classification: Independent Contractor vs. Employee
Rhode Island law regarding independent contractor status is not as well-developed as Massachusetts law. However, workers are considered employees, unless they have an independent trade, business or profession; their services are offered to the general public; and they have the right to control the means and methods of how the work is performed. By statute, independent contractors must file notices of their independent contractor statute with the Rhode Island Department of Labor and Training.
Construction Industry and Misclassification
Employers in the “construction industry” are subject to specific damages and penalties if they knowingly and willfully misclassify workers as independent contractors when they should be employees. Specifically, construction employers face criminal and monetary penalties where they repeatedly misclassify and/or deliberately or intentionally misclassify employees.
The “construction industry” means “the business of constructing, reconstructing, altering, maintaining, moving, rehabilitating, repairing, renovating, or demolition of any building, structure, or improvement to the excavation or other development or improvement to land, highway, or other real property.”
Sick and Safe Leave
Employers with 18 or more Rhode Island employees must provide 40 hours of paid sick leave to be used as set forth in the statute. If your company has 17 or fewer employees, you must provide 40 hours of sick leave – which can be unpaid. Employees must accrue sick leave at a rate of at least 1 hour accrued for every 35 hours worked, which is a different formula than Massachusetts. This law applies to full-time, part-time, temporary, and seasonal employees.
Pay Transparency
Employers may not request an applicant’s salary history before making an offer of employment. Further, upon request from applicants or current employees, employers must provide the wage range (minimum and maximum wage) for a particular position. Employers do not have an affirmative obligation to provide wage ranges. More information concerning pay transparency in Rhode Island can be found here.
Temporary Caregiver Insurance
Employees are permitted to take up to 6 weeks of paid leave to care for a child, spouse, or parent with a serious health condition or to bond with a newborn child. Importantly, an employer’s obligation is limited to placing employees on notice of this leave and not interfering with or retaliating against employees for taking this leave. Employers do not bear the costs for this leave, which is paid for through a state-operated fund created by employee tax deductions. Employees are permitted to earn their salary and to use paid vacation or paid sick leave while also receiving temporary caregivers pay.
Employee Drug Testing
Rhode Island employers may require employee drug testing only if specific statutory requirements are met. Employers must review these requirements before implanting / carrying out drug testing programs. Absent a statutory exception, employers are prohibited from terminating the employment of employees due to their failing a first drug test.
Marijuana in the Workplace
Medical and recreational marijuana use are both legal in Rhode Island. However, employers are not required to provide any reasonable accommodations for an employee’s use of medical marijuana in the workplace or during work hours. Employees are required to engage in the interactive process and consider providing reasonable accommodations for medical marijuana outside of the workplace.
Employers are also prohibited from taking disciplinary action against employees solely on the basis of their recreational use of marijuana outside of the workplace. With this said, employers who are federal contractors may maintain policies that forbid employees holding positions that are hazardous, dangerous, or essential to public welfare and safety, from consuming marijuana within 24 hours prior to their scheduled shift.
“Hazardous, dangerous, or essential…” includes the operation of heavy equipment, heavy machinery, commercial vehicles, and similar positions.
Moving Forward
We hope that this list, while not exhaustive, assists your teams as they manage their Rhode Island workforce. Employers with employees in Rhode Island should regularly review and update their policies to ensure compliance with Rhode Island laws and to ensure that those employees receive timely notice of their rights. Failure to notify employees of their rights and/or to comply with Rhode Island employment laws can result, in certain circumstances, not only in actual damages, but can also make employers liable for double damages and attorneys’ fees
Employers with questions should consult with a Kenney & Sams employment attorney.
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