Paid Sick Leave Compliance: 7 Tips You Need to Know Now

The paid sick leave trend appears to have no end in sight, and is causing headaches for unwitting employers. As multiple states (approximately 11 and the District of Columbia) and municipalities continue to enact laws allowing employees to take paid time off without penalty to care for themselves or other family members when sick, HR and employers are faced with several challenging issues.

In a recent XpertHR webinar, Littler Mendelson attorneys Jill Lowell and Adam Fiss shared key insights on managing paid sick leave compliance. Here are some top tips:

Recognize That Paid Sick Leave Laws Vary

All paid sick leave laws on the state and local level are not cut from the same cloth. While there may be common themes, Lowell and Fiss advised that there is no clear cut 50 state solution for paid sick leave policies and an employer and HR will need to assess what works best for each particular organization.

For example, paid sick leave laws have different:

• Eligibility requirements;
• Accrual rates;
• Amount of time off provided;
• Purposes for which benefits may be used;
• Increments in which benefits may be used; and
• Frontloading requirements.

These issues become more complicated when weighed against business challenges such as:

• Multiple businesses or units;
• Different employee populations;
• Attendance requirements for the business;
• Historical practices and policies of the particular organization; and
• Varying recruiting, tenure and employee retention issues.

An employer should have a clear understanding which laws apply to them and how to comply.

Use a Preexisting PTO Policy Cautiously

Lowell and Fiss note that while an employer may be able to use a preexisting paid time off (PTO) policy to satisfy its paid sick leave obligations, proceed cautiously. An existing PTO policy may only be used if the policy meets or exceeds the minimum paid sick leave requirements. The employer also needs consider things such as:

• Timekeeping procedures;
• Where the employer is operating;
• The number of employees it has; and
• Carry over restrictions.

However, an employer should note that certain jurisdictions, such as Santa Monica, California, do not let employees rely on the PTO policy and bank their time.

Pros and Cons for Implementing a Universal Paid Sick Leave Policy

While an employer may seek to implement a universal paid sick leave policy as a 50 state solution to address this rapidly developing trend, there are certain drawbacks to this approach as paid sick leave laws may have different:

• Reasons for use;
• Documentation and verification requirements;
• Notice provisions; and
• Rates of pay.

For example, Lowell noted that an increasing number of paid sick leave laws provide kin care leave (leave to tend to the illness of a child, spouse or parents) as well as safe leave or domestic violence leave.

An employer needs to consider how generous and expansive it wants to be and evaluate whether it will clearly identify:

• All the permissible reasons for taking leave; and
• The required documentation an employee must provide.

The best bet may be to create a universal one size fits all paid sick leave policy that will satisfy the minimum requirements of most jurisdictions with stand-alone policies for jurisdictions that have nuances.

Risks of Implementing a Stand-alone Paid Sick Leave Policy

Given the varying requirements of paid sick leave laws it may seem like a good idea for an employer to have simple stand-alone policies that track the minimum requirements for each jurisdiction in which the employer operates and provide clear guidelines for managers. However, this approach may prove to be an administrative nightmare for timekeeping and tracking purposes, especially if an employee moves to a new location. Further, new laws are constantly emerging so it could be difficult manage.

Paid Sick Leave Eligibility Is Generally Based on Where the Employee Works

Lowell and Fiss both pointed out that employees will generally be entitled to paid sick leave depending on where they work – not where they live. Thus, if an employee works in New York City but lives in New Jersey, New York City law applies. With respect to telecommuters, the law in the jurisdiction where the telecommuter is working from generally applies.

Be Careful About Notice Violations

An employer must be extremely careful to provide the required notice to employees of paid sick leave rights or else it may find itself in hot water. For example, Lowell cited a recent case in which a Dunkin Donuts franchisee settled a claim that it violated the Massachusetts earned sick time law by failing to advise employees about sick time rights for a hefty $60,000. The Massachusetts law explicitly states that employers are legally required to post a notice of employee rights in the workplace and include sick time policies in any employee handbook or manual. Thus, an employer should check its workplace policies and employee handbooks to make sure to include the required provisions.

Additional Leave Under Other Laws

Even if an employee’s entitlement to paid sick leave or paid time off has been exhausted, that may not be the end of the story as an employee still may be entitled to additional time off under other laws. For example, depending on the circumstances, leave may be a reasonable accommodation under the Americans with Disabilities Act (ADA). An employer should carefully consider each leave request on a case-by-case basis and avoid discriminating when responding to leave requests.

For more insights from Jill Lowell and Adam Fiss on paid sick leave compliance, listen in to our XpertHR webinar.

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