Paid Sick Leave: Coming Soon to a City Near You!

Although the Bureau of Labor Statistics reports that 65 percent of all workers currently receive paid sick leave benefits, across the nation there have been a proliferation of ordinances and laws that require private employers, including small businesses, to provide paid sick leave to employees.

Advocates cite statistics related to increased productivity, reduced turnover, lower rates of occupational injuries, and other workplace and societal benefits that they believe create an urgent need for paid sick leave. In addition, based on statistics showing an increase in domestic violence, supporters of these laws are proposing to include paid "safe days" for employees in need of time off to address domestic or sexual violence matters.

With the help of our federal government, momentum for mandated paid sick leave is growing. On September 7, 2015, President Obama issued an Executive Order requiring government contractors and subcontractors to provide one hour of paid sick leave for every 30 hours worked by employees, up to 56 hours per year. Covered employers must grant leave to employees for their own illness and to address domestic violence issues. They must also grant leave for the illness of individuals related by blood or affinity whose close association with the employee is equivalent to a family relationship. Unless a new President revokes it, this Executive Order becomes effective in January 2017. Although it only applies to government contractors, from experience we know that public sector HR initiatives often lay the groundwork for private-sector legislation.
Look no further than The Healthy Families Act, a pending bill in Congress for private-sector employers. If passed, this bill would require employers with 15 or more employees to provide up to 56 hours of paid sick leave per year, available for use on the 60th day of employment. Smaller businesses would have to provide the same amount of unpaid time off for workers. Similar to the Executive Order for government contractors, this Act includes a broad definition for whom the time can be used to care for.
Cities and states around the country are not waiting for Congress to pass this bill. They are enacting their own legislation at a rapid pace. Currently, 4 states, 20 cities, 1 county, and the District of Columbia mandate paid sick leave for private sector businesses. These include:
  • California, Connecticut, Massachusetts, and Oregon
  • California Cities: Emeryville, Oakland, San Diego, and San Francisco
  • Pennsylvania Cities: Philadelphia and Pittsburgh
  • New Jersey Cities: Bloomfield, East Orange, Elizabeth, Irvington, Jersey City, Montclair, Newark, Passaic, Paterson, and Trenton
  • New York: New York City
  • Washington Cities: Seattle and Tacoma
  • Montgomery County, Maryland
  • District of Columbia
In addition to current regulations, paid sick leave bills are pending in several states, and will likely pass. These states may soon require employers to offer paid sick leave: Hawaii, Michigan, Minnesota, New Jersey, Pennsylvania, Vermont, and Washington.

Lest you think you may be exempt based on the size of your company or makeup of your workforce------- not so! Paid sick leave laws can cover businesses with only one employee and many of the laws require paid sick leave for part-time, temporary, and seasonal workers. In addition, coverage can be based on where the work is performed versus where your business is located.
New laws are expected to resemble current paid sick leave laws, which share these commonalities:
Most of the laws use an accrual formula for earning time and many permit employers to define the "calendar year."
  • Most require unused time to be carried over up to a maximum amount.
  • Most provide time off for domestic violence incidents in addition to illness.
  • Some laws are tied to the issuance of a business license.
  • Most of the laws require written policies and/or other notification to employees.
  • Most do not require payout at separation (however, other state wage and hour regulations may require this).
  • Most include a waiting period of 60 or 90 days before the sick time can be used.
  • Most include limitations on requiring certification from a healthcare provider (for example, limiting employers from requiring a doctor's note unless the absence exceeds 3 consecutive days).
  • Some allow granting sick leave up front ("front loading") in lieu of accruing (earning) it over a period of time.
  • Most include broad anti-retaliation provisions that prevent employers from retaliating against workers who "exercise their rights under the law."
In essence, these new laws treat sick leave like PTO by allowing employees to use the time off at will, without having to justify an illness. Indeed, the days of requiring employees to "prove" they are sick in order to use sick time are fast diminishing.

For multistate employers, the patchwork of sick leave laws between states (or even within the same state) can create big headaches. These employers are faced with the choice between adopting multiple policies that offer different levels of benefits based on location OR developing one policy that applies company-wide and that offers the highest standard for each particular leave provision.
Thankfully, a number of states have recognized that multiple laws create confusion, compliance concerns, and a competitive disadvantage for employers. These states have passed legislation that prohibits local governments from passing sick leave laws. Currently, Arizona, Florida, Georgia, Indiana, Kansas, Louisiana, Michigan, Mississippi, North Carolina, Oklahoma, Tennessee, and Wisconsin have passed such laws.
Notwithstanding the states that have wisely limited potential for a patchwork of local laws, employers should expect more mandated paid sick leave laws in 2016. If your business is not currently required to provide paid sick leave, now is the time to review your vacation, PTO, and sick leave policies to determine how a new law would impact these benefits. Here are several action items to help you prepare:
If you offer PTO, consider how a sick leave law with provisions similar to those outlined above would impact your PTO policy. In most cases, employers with PTO policies that allow the time to be used for reasons covered in the law do not have to add an additional policy. Their PTO policy must, however, offer at least the amount of time off as the sick leave law requires and must comply with all other provisions of the law.
Evaluate the amount of time you offer for sick and vacation time and the cost of offering these benefits. As more employers add paid sick time, to remain competitive obtain market data and ensure that the amount of paid time off you offer is within the market range. Consider the monetary impact of changes if you had to add a paid sick leave benefit.
Calculate the cost of having to offer paid sick leave to part-time, seasonal, and temporary workers if your policy does not currently offer this benefit to employees in these classifications.
Evaluate your HRIS and payroll systems to determine the feasibility of tracking sick time accruals by hours worked.
Of course, if your business is located in a city or state with a current or proposed sick leave law, ensure that your sick leave policy and associated practices comply with applicable rules. Clients can call our office any time for information about sick leave laws that apply to their business.


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