The Paid Sick Leave Trend

Earlier this year, President Obama called on Congress to enact a federal law requiring businesses to offer seven days of paid sick leave to workers, but the proposed law is unlikely to pass in the current political climate. Nevertheless, a paid sick leave trend has increased at the state level, and some of these efforts are proving successful.

Before last year, only Connecticut and several cities, such as New York City and San Francisco, had paid sick leave laws. That’s about to change. As of July 1, 2015, California and Massachusetts require employers to offer paid sick leave. Many other states are likely to follow. In fact, Oregon’s governor just signed a bill into law that will require businesses in Oregon to offer sick leave beginning on January 1, 2016, making Oregon the fourth state to require paid sick leave.

According to our analysis, Hawaii, Vermont, Delaware, and Rhode Island are likely to enact paid sick leave laws next. Bills in those states have been introduced and are advancing with the potential to pass. New York, Illinois, and New Jersey may enact paid sick leave laws eventually. However, political gridlock and divided governments make paid sick leave laws in these states unlikely at the moment.

The paid sick leave laws passed so far share some common elements. Employers are typically required to offer an hour of paid sick leave for every thirty hours worked or an amount not less than 40 hours per year. Nearly every paid sick leave law requires employees to be able to use paid sick leave for family care.

The various state laws also have their differences. Some states give employers multiple options to provide paid sick leave. California, for example, allows employers to choose between accrual and lump sum methods.

If a paid sick leave law is enacted in your state, we recommend taking the following steps:

• Review all current and new paid leave policies for compliance.
• Decide whether lumping vacation, personal, and sick leave together would be better for your organization and, if applicable, for which specific employee groups.
• Determine which employees work in places with paid sick leave laws and consider whether a one-size-fits-all policy or location-specific policies would be better.
• Confirm that usage terms, accrual, coverage, carry-over, and any vesting rules meet minimum requirements.
• Review the employee notice requirements, e.g., paystubs and workplace posters.
• Update your handbook and distribute it to employees.

Most states do not require paid sick leave to be separated from general time off, but existing paid time off policies must meet all the minimum requirements of the law. Given all these variables, some employers may find it easier to update their current sick leave policy while others may decide to create a new policy from scratch. Remember that combining vacation and paid sick leave together may alter whether the time needs to be paid at termination. In other words, if you use “paid time off” to cover both sick and vacation leaves, regulations on both sick leave and vacation – whichever are most beneficial to the employee – will apply.

Even if your state has no paid sick leave law, it never hurts to review your paid leave programs. Make sure that your policy makes sense to employees—and to you! If your paid leave program is confusing to you as a manager, then it will undoubtedly confuse your employees. If you lack a written paid leave policy for your paid leave benefits, put one into place.

Stay tuned for additional information from GTM on this evolving issue. For more information on how GTM keeps its business clients up to date with laws and HR issues, contact us at (518) 373-4111.