Paid sick leave laws continue to pose a significant compliance challenge to U.S. employers and their human resources organizations. Since there are no federal legal requirements for paid sick leave, the impact to employers and their employees varies by state, making it increasingly more complex to consistently and uniformly apply regulations and align them with an organization’s HR policies.
While the legislative framework for sick leave laws tends to be similar, each state law can differ in how it requires employers to apply it to their workforce. The framework generally defines eligible employees, an accrual formula, reasons for leave, carry-over requirements, employee and employer notice, and documentation requirements. But employers with locations in multiple states and cities may face unique challenges when it comes to the practical application of sick leave requirements.
For example, as an HR leader, you would need to identify specific business needs and evaluate the laws that apply to employees to determine if the organization can maintain one paid time off policy to govern all employees across various jurisdictions, or if the organization needs to maintain a sick leave policy separate from its PTO policy. There are pros and cons for each option that need to be carefully considered before making a decision.
Here are six things HR leaders may want to take into account as they make that assessment:
1. Think about the impact of any policy you’re planning to implement to comply with any new law. For instance, if the organization already has a PTO policy (which may or may not include time off for being sick), think about whether to maintain one all-inclusive PTO policy or a separate policy strictly for sick time. If your organization has a separate policy for sick time, you will have to coordinate its administration with U.S. Department of Labor Family and Medical Leave Act (FMLA) requirements, as well as paid and unpaid state leave laws. Additionally, you’d need to be aware of any specific record-keeping or paystub requirements, or notice/poster requirements, including incorporating the information into employee handbooks.
2. Define what your organization means by the word “employee.” Employees view time-off policies as part of their total compensation. Therefore, before your organization makes a change, it needs to define who they are trying to attract, how they are trying to motivate them, and what type of work environment they are trying to create.
3. Assess whether or not one PTO policy is appropriate and adequate. For employers with employees in multiple jurisdictions, with varying paid sick leave requirements, having one PTO policy for all types of leave can be an attractive option. PTO policies give workers the flexibility to use their leave to fit their needs. Provided it meets the requirements of the most generous paid sick leave law in effect, one PTO policy can govern all employees across various jurisdictions and simplify administration.
One potential disadvantage: Some states, like California, require employers to pay out all accrued, but unused, time under their PTO policy. Most paid sick leave laws do not require the payout of accrued, but unused, sick time. This could mean the organization would face additional costs paying for unused sick time, if they bundle their sick leave into their PTO.
4. Identify your specific business needs and evaluate the laws that apply to your employees. It could be that you might want to make a business case for change (if appropriate). Consult with your legal counsel to determine whether any existing sick leave or PTO policy meets the requirements of the emerging laws, or if you will need to take additional steps to remain compliant.
5. Educate yourself about reporting and notice requirements. Some states, such as California, require written notice be provided to affected employees ― on the designated pay date with the employee’s payment of wages — that specifies the amount of paid sick leave available, or paid time off leave that an employer provides in lieu of sick leave. To meet this requirement, one idea is to print the balance of paid sick leave available on the employee’s pay statement when there is paid sick leave available for use.
6. Understand any advance notice requirements. Some states require employers to give notice to each covered employee when they’re hired. That notice includes a statement confirming that the employee is entitled to paid sick leave, the amount provided, and the terms under which it can be used; that the employer cannot interfere or retaliate against the employee for requesting or using sick leave, and that employees can file a complaint with the state Labor Commissioner for any violation. One way your organization can satisfy this requirement is by displaying a poster containing the information in a conspicuous place that’s accessible to employees at a business location. Some states may supply the required poster or notice, or provide samples for employers to use.
With 50 states and 39,000 municipalities, the number of sick leave mandates will continue to grow rapidly and compliance with the numerous paid sick leave laws will have its challenges. As an HR leader, you’ll need to review the differences of each law applicable to your workforce and ensure you’re providing your organization’s workforce with the greatest protection called for under the more generous law. You may want to monitor various sources, such as news outlets and associations to identify other similar laws; evaluate the recently enacted laws noting any questions; review current company policies; and consult with legal counsel to develop a plan to help ensure other legal and compliance requirements are met.
You’ll find it pays to be vigilant.
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