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Coming to a City Near You: The Paid Sick Leave Law

Coming to a City Near You: The Paid Sick Leave Law

It’s an epidemic; it’s spreading across the country like the flu. Yes, I am referring to the interesting phenomenon that is the Paid Sick Leave Law.

More and more lawmakers are adopting the regulations and it’s trending to become law nationwide.

What exactly does this law mean for your business? Keep reading.

History of the Law

The Paid Sick Leave ordinance was first adopted by San Francisco in 2006. Part of the reason is that San Francisco, like many of our large cities, has a lot of people working in the hospitality industry. In this industry, if you’re sick, you just don’t go to work that day. You don’t really have a choice and you don’t get paid for it.

The city powers got together and decided to make a change. They determined that they had a huge workforce that was not getting access to paid sick leave. As a result, the employees would just come to work sick and make others sick.

The adaptation was made so that the employee would earn one hour of paid sick leave for every 30 hours worked. This applies to all businesses with 10 or more employees. In order to qualify, the employee has to work up to 72 hours in a year and the accrual begins after 90 days of employment.

This became an official law in 2007 and now, 16 cities (including Portland, Philadelphia, and New York City) and three states (California, Connecticut and Massachusetts) have passed similar laws. Here’s a full list.

President Obama noted during his January State of the Union Address that as part of his legacy, all American workers should be able to qualify for paid sick leave.

City and State Laws Differ

If you live in a state like CA, CT or MA and you’re in a city that also has the law, for each provision or benefit, the employer must provide whichever is more generous to the employee.

For example: For workers in San Francisco, employers will have to comply with both the San Francisco and California laws, which differ in some respects.

San Francisco is more generous in terms of the amount of sick leave that might be available in a year. California is more generous with respect to the rehire provision.

Another example of various provisions are accrual and waiting period to access sick leave.

This can become confusing for the employer who might ask, “Which law do I have to work with?” This spreadsheet will help.*

Good News vs. Bad News

There’s good news and bad news on both sides of the equation for this new law.

Bad News: Employers are now paying wages that they wouldn’t normally pay, so their costs will go up (payroll taxes must be paid on these hours.) When costs go up, costs to consumers rise

Good News: Employees can comfortably admit that they (or their child) is sick and stay home, while still being paid. Fortunately, they are not bringing their sickness into the workplace causing more employees to be out sick.

As an Employer, How Can I Stay Compliant?

There are two things you can do to meet the requirement of mandatory paid sick leave:

  1. Accrue per pay period and allow everyone to accrue up to the minimum each pay period.
  2. Do a front-loaded type of accrual.  In this case, after an employee has worked for a company for 90 days, they would have access to the designated amount of sick leave to use throughout the year.

Use or Lose?

In most cases, the sick leave hours do carry over, depending on the limits set by the employer. Also, in most cases, the employer does not have to pay those hours out if the employee leaves.

Takeaway for Employers

The likelihood is high that mandatory paid sick leave will be put into place eventually in every community in some way, shape or form. Thus, every business is going to adjust to it.

If this is the first time you’re hearing about this, like some of our clients at PrimePay, some things you can do are:

  • Research. Anyone can find this information out by going to your local government or state government websites and it’s all posted right there for you. Find out exactly what your requirements are.
  • Determine your own ability to track that particular accrual policy that you’re going to be governed by. If it’s beyond your scope, then seek out other opportunities and ways to track that.
    • Some of those things could be looking at automated time and attendance programs. The expense for automated time and attendance is minimal when compared to potential penalties employers would have to pay for not being compliant.

Has this law been signed into effect near you?