Changes in employment law tend to occur in waves, as different states create their own legislation on whatever topic has come into the public eye. Unfortunately, sometimes these trends take on momentum and start spreading more like a virus. In recent years, paid sick leave laws have become highly contagious throughout the U.S.
So far, almost 40 states, cities, and counties across the country have implemented a mandatory paid sick leave law. And while employers are required to comply, the speed at which these laws are being enacted currently far outpaces the clarity of their requirements.
Here are just a few areas where new paid sick leave laws are going into effect:
- Paid sick leave in Vermont went into effect on January 1, 2017.
- Arizona, St. Paul, Minneapolis, Cook County (IL), and Chicago have laws scheduled to go into effect on July 1, 2017.
- Los Angeles’ law went into effect last year, but small employers got a delay – their time to comply is also up on July 1, 2017.
- Berkeley goes into effect on October 1, 2017.
- And more locations will likely catch the paid sick leave bug by or before next year, starting with Washington state, effective January 1, 2018.
Most employers will need policy updates to take these changes into account, but that’s nothing unusual when a major local or state employment law is enacted. Here’s where the problem lies: New sick leave laws are being created faster than they are being clarified, with too little regard for the complex changes small employers will have to make.
What Do Mandatory Paid Sick Leave Laws Require?
Sick leave laws are designed to protect workers who don’t have access to adequate time off to care for their own and family members’ health. Each law is different, but the common requirements tend to be a mandatory accrual rate, an amount of time the employee may use each year, and a requirement that unused time be rolled over from year to year. Some laws allow the employer to cap the amount that can be used each year, some do not.
Complex regulations often apply to tracking and reporting the accrual and use of sick time. To avoid tracking accrual, employers may generally grant the full amount of time up front, but are often stuck with a mostly needless administrative burden of tracking unusable roll over amounts, unless they are permitted under the law to cash unused time out.
Note that other legal requirements also vary widely from location to location! Some mandatory sick leave laws provide relief for small employers by allowing sick days to be unpaid, while still requiring strict adherence to other details of the law.
Most sick leave laws put restrictions on the employer’s ability to confirm the use of a sick day was legitimate, including not permitting the employer to request a doctor’s note at all, or only after a certain number of consecutive sick days have been used. And to make employers’ lives more fun (read: dangerous!) these laws of course build in the ability for an employee to file a claim against an employer for violating the law—for instance, by requiring a doctor’s note when it was prohibited under the law, not following the law to a T, or retaliating against the employee.
Worse, some sick leave laws even have a presumption of retaliation built in. This means that if you take any type of adverse action against the employee (i.e. termination, demotion, pay cut, or corrective action) within the time frame defined under the law, it is presumed you did so in retaliation for the employee using a sick leave right.
New Paid Sick Leave Laws Are Confusing and Incomplete
Ensuring sick time for employees sounds like a benevolent goal, but these laws can place a major burden on employers, especially when the legislation is hastily written and doesn’t take business reality into account. A commonality in each new law released is that key implementation features for healthcare (and other) employers are missing, and businesses must wait for regulations that tell employers how to implement the law, or for the law to be revised, or, at minimum, for the regulating agency to issue FAQs with guidance in response to the business inquiries that have been received.
For example, healthcare employers commonly pay some of their providers on a commission basis, but mandatory sick leave laws rarely address sick pay for commissioned employees. However, even when a clarification is issued, it may not answer the whole question. For commissioned employees, the clarification sometimes operates on the assumption that the commissioned employee is non-exempt, and its guidance is written clearly for that type of employee.
Unfortunately, not a single sick pay law has yet excluded exempt or highly compensated employees. Therefore, your exempt commissioned employees, including doctors, also have the right to paid sick leave. The legislature did not consider these types of employees when writing the law, so businesses often have to work with professional HR advisors and attorneys to make their best educated guess as to how to calculate the sick pay due.
Cities that implement their own sick leave laws create particular problems. If you operate multiple business locations, and some are in a city with a sick leave law but some are not, it can create quite the headache. This is also a problem when you have employees who travel from location to location, and you have to determine whether they have worked enough hours in a certain location to be eligible for the sick leave laws applicable in that city. Typically, if there is any question or doubt, our recommendation is to assume the sick leave law applies. The reasoning behind this is not to urge benevolence toward your employees, as wonderful as I’m sure they are, but because the risks of getting something wrong usually far outweighs the cost of including someone in a sick leave policy.
Policy Updates Are Required
Sick leave laws create complexities even for companies already offering paid time off, but whose policies aren’t completely in line with the new requirements. Even businesses that have never tracked paid time off and have previously offered unlimited time off benefits can be considered out of compliance if they continue with their current policies.
In addition to bringing your policies into alignment, employers must inform employees in some way about their specific sick leave rights, maintain records about each employee’s sick leave, and follow the law’s requirements about how the sick leave can be used.
Examples of the specific requirements of some of these sick pay laws include:
- Allowing employees to take time off in 15-minute increments rather than full-day increments under current policy,
- Mandating that employees calling in sick not be required to find (or attempt to find) a replacement for their shift,
- Requiring that the employer maintain sick leave records for multiple years,
- Requiring that pay stubs suddenly have to include additional detailed information.
Even tracking and reporting accrual and use of paid sick leave creates new challenges. Generally, paid sick leave laws require that employees accrue sick time based on hours worked—so you need to know the exact amount of time hourly employees are on the clock (and be 100% sure they’re classified correctly, too). Any inconsistencies could put you in legal jeopardy. Many states also require complex paystub reporting that is too burdensome for practices to handle alone—but if you’re outsourcing payroll, it’s your responsibility to know it’s being done properly. (We recommend Payday HCM for payroll services.)
If Your Area Comes Down with a Paid Sick Leave Law, What’s Next?
We’ve only scratched the surface of new and upcoming sick pay legislation. In the meantime, if you own or manage an independent healthcare practice in an affected area, here’s what you’ll want to do.
For Members:
CEDR members, you’ve got it covered—your CEDR membership means your handbook will always be a living document. We are already making plans to help you incorporate the new sick pay laws into your policies and HR practices. Our Solution Center team will be in contact to provide your updates. If you are facing a sick leave law going into effect this summer and we have not contacted you yet, do not worry. All of the laws coming into play this July are still in need of legislative clarity or regulations, and we want to have as much information we can about your law before we put a policy in place, to avoid multiple updates if we can.
If you have questions about the changes in the law or would like to get started on your update now, please feel free to contact us. As confusing and annoying as all of this is, your access to HR guidance is unlimited, and we’re only an email or phone call away from helping you solve any issues.
For Non-members:
It’s situations like these where you really need an HR advisor! PLEASE resist the urge to change your policies without guidance, you will likely do more harm than good. Sick leave laws are very specific, and even missing one key concept or phrase can put you at legal and financial risk. If you live in an area that passed a sick leave law and you did not work with a qualified expert to put a policy in place, we invite you to contact us.
Best of luck! Whatever choice you make, remember, your employee policies should always be up to date and helping to protect—rather than endanger—your practice.
Friendly Disclaimer: This information is general in nature and is not intended to provide legal advice or replace counsel about a specific issue with an attorney or HR expert. This material is meant to provide information that is believed to be current as of the date of this post.
