This article is for educational purposes and does not constitute legal or tax advice. For specific advice applicable to your business, please contact a professional.
As of March 2019, 11 states require private employers to provide sick leave to employees who are recovering from an illness or taking care of a sick loved one.
Each of these states has different requirements for when employees can use emergency paid sick leave, which employees are entitled to it, and how it is accrued. On top of that, local governments often have their own laws about paid sick leave, which makes providing this benefit more complicated than others.
Whether you live in a city where you need to comply with multiple sick leave laws, or you’re in a state with no laws at all, it’s important to be prepared for any changes that might be coming. The following should not be regarded as legal advice. If you have specific questions regarding local or state sick leave laws, you should reach out to an employment attorney.
Get Started with Square Payroll
Payroll processing trusted by thousands.
Start with an audit of your current sick leave policy. Even if you don’t have a policy, you can do this exercise to help you create one that complies with local and state laws.
Compliance aside, it’s important to take stock of your PTO and sick leave policy to make sure it’s a good fit for your employees. Paid time off can help your employees remain productive, happy, and healthy.
To conduct an audit of your sick leave policy, ask these questions of your current policy and compare them to your city and state’s laws:
1. Who is eligible?
Typically, full-time employees (W-2 employees working 30 or more hours per week) are eligible for sick leave. You want to draw clear lines around this, especially if some of your employees are contractors (1099) and some aren’t (W-2).
2. How is it earned? At what rate?
Many policies state that you earn X hours per Y hours worked. Make sure to check this rate against local and state mandates to ensure you’re compliant. This also brings up the question of how you track that time. If you use Square Payroll, you can set up these rates for employees to earn sick time or PTO, and we’ll track how much they’ve earned, how much they’ve used, and the balance remaining.
3. How much leave can an employee earn?
Check to see if there is a limit to the number of sick days a team member can earn.
4. In what period of time does the accrual happen?
Many policies use a calendar year to measure the amount of time for accrual. This can often be referred to as a “benefit year.” You also want to determine what the rules are when carrying over time from one benefit year to another, or if you pay employees out on that time.
5. What counts as sick leave?
State and local policies have clear guidelines for what sick leave can be used for. Some include caring for a sick loved one, for example. This is also a good opportunity to think about how employees can request this time off, as well as what the next steps are if you accept or reject that request based upon the parameters you set.
6. How are employees paid for sick leave?
This may vary depending on the method you use to run payroll. If you’re using Square Payroll to pay employees, the next time you run payroll, enter the employees’ PTO/Sick Leave hours and we’ll do the rest.
7. Is my policy clear?
This isn’t mandated by law, but your sick leave policy should be clear and easy for your employees to understand (even if sick leave laws are not as transparent). A good way to test it: Give your sick leave policy to someone who doesn’t work for you or know your business, and see if they understand it and know how to follow your protocol.
As is the case with any new laws, it can be confusing to understand if you’re compliant. But by conducting an audit and checking your business against local and state policies, you’re doing your due diligence. And if you’re in one of the 39 states that doesn’t have sick leave laws, by doing the work now, you and your employees will be ahead of the game if or when a sick leave policy becomes mandatory.
These parts of running a business can be tedious, but they can be made easier with the right tools, like Square Payroll. Square Payroll can track PTO and sick time separately and help you pay your employees hassle-free.