What Does The Paid Sick Leave Law Mean For Your Business?

What Does The Paid Sick Leave Law Mean For Your Business?

The Paid Sick Leave Law is trending, as more and more businesses nationwide have begun to adopt it. So what does this law mean for you? Here are some key points you should take note of:

History of the Law

The Paid Sick Leave ordinance was first implemented in San Francisco in 2006. This is partly due to the large hospitality industry in San Francisco, where workers have to skip work when they are sick, and do not get paid.

However, many workers continued to come to work even though they were sick, resulting in their co-workers becoming sick too. Hence, the city powers decided to change the rules such that more people would have access to paid sick leave.

Now, employees enjoy one hour of paid sick leave for every 30 hours they work, as long as the business has 10 or more employees, and the employee in question works up to 72 hours in a year. Accrual begins after 90 days of employment.

In 2007, this became an official law. As of now, 16 cities and 3 states have recognized Paid Sick Leave Law, and President Obama even noted that all American workers should have access to paid sick leave.

City and State Laws are Different

Employers are obliged to provide the more generous option, when city and state laws regarding paid sick leave differ.

For example: For workers in San Francisco, employers are obliged to adhere to both California and San Francisco’s laws. While San Francisco provides more sick leave each year, California State has better coverage with regard to the rehire provision.

Accrual and waiting period to access sick leave are some examples of provisions that may differ between state and city laws, which may then result in confusion for employers.

Good News vs. Bad News

This new law brings both good and bad tidings.

  • Bad News: Employers now have more wages to pay, hence their costs will rise. These increased costs are then transferred to consumers.
  • Good News: Employees can now stay home and still get paid even when they (or their child) are sick. This also cuts down on the spread of sickness in the workplace, thus reducing the number of sick employees.

How can employers stay compliant?

Here’s what employers can do to stay in line with the Paid Sick Leave law:

  • Accrue per pay period and allow all employees to accrue up to the minimum per pay period.
  • Implement a front-loaded accrual, so that as long as employees have worked 90 days, they have access to the full number of paid sick leave days to use.

Use or Lose?

Sick leave hours carry over in most cases, subject to limits set by employers. Generally, if the employee leaves, employers do not have to pay these hours out.

Knowledge Takeaway for Employers

Mandatory paid sick leave seems set to be the new norm, hence every single business would have to get used to it sooner or later.

If this sounds new to you, like some of our clients at TRAXPayroll, here are some things you can do:

  • Do your research. Government/state websites are a wealth of relevant information. Information regarding such laws is generally public, and you should be able to find out all you need to know.
  • Gauge your ability to track the particular accrual policy that will affect you. If it is beyond your capabilities, look for other ways and means to track it. Automated time and attendance programs could prove to be very helpful. These programs cost only a small fee when compared to the potential fines that employers would have to pay for violating the paid sick leave laws.
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