Is PTO Enough When Paid Sick Leave Is Required?

January 19, 2016

Look around your office. Is anyone out sick today? (Alternatively, is someone who is in the office clearly too sick to be there?) According to Bloomberg BNA, sick leave will be a big issue for HR departments across the country in 2016.

The Potential Problem with Sick Leave Law

Why?

Well, because cities and states across the country are changing laws and regulations around this topic that could end up making it harder on businesses.

Let’s look at why.

In today’s business world, a popular method to handling leave is to offer paid time off (PTO) in lieu of branches of various leaves. You know what I mean, right? Instead of offering 10 vacation days and 10 sick days, you simply offer 20 PTO days and employees can do what they want with them.

That sounds alright. I mean, there is an argument around this that some employees will come in sick even though they are less than productive and are spreading germs to everyone around them just to be able to use those 20 days for their big European vacation over the summer. However, for the most part, this system seems pretty okay.

Yet, apparently there is at least one additional problem. Sick leave laws.

The Growing Trend of Sick Leave

Cities and states all over the US are adding laws that mandate employers to offer sick leave. However, for those businesses that already offer a single set of PTO days, does that qualify?

Well, that is the question.

Let’s look at California. In California, a sick leave requirement started in 2015. Under this law, any employee working in the state is eligible to start accruing sick leave after they have worked for you for at least 30 days. After 90 days of employment, they are eligible to start using their sick leave.

There are a lot more details to the law, including:

  • Businesses must allow sick leave to be carried over to the next year. However, they can cap this accrual at 48 hours (or six days).
  • Businesses may require the accrued time to be used in at least two hour lumps; however, they cannot require more than that (e.g., they could not require a four hour lump).
  • Employers can limit an employee’s use of paid sick leave at 24 hours (or three days) a year.
  • One hour of sick leave is accrued for every 30 hours an employee works.

Ok. Now that we have the basics of California’s law, let’s look at the potential PTO problem associated with it.

Let’s assume that you, as an employer, take the steps to make sure your PTO policy is in compliance with California’s new paid sick leave law. An employee uses all their PTO days and then promptly gets sick. You don’t need to give them anymore paid days because the days they already got off counted as the paid sick days you were legally required to give them. That’s great!

Now, though, let’s say that you didn’t take the steps to make sure your PTO complied with the new sick leave law. As it turns out, it actually doesn’t. An employee once again uses all their PTO days and once again, they promptly get sick. This time, one of two things could happen.

The first is that you realize your mistake, and you find out you have to give the employee even more paid days off on top of the PTO in order to make sure you are compliant. The second is that you don’t realize your mistake, you don’t give the employee the days they are legally entitled to, and you open yourself up to a lawsuit.

Either way, it doesn’t sound good.

How Popular Are Paid Sick Leave Laws Anyway?

 

Of course, this whole problem becomes much less of an issue if not many places require paid sick leave. Now obviously, California having a law of this nature on its own is huge because California itself is huge. But what you might want to know is how big this trend is nationwide. To find out, all we have to do is look at some numbers.

Here are some facts about paid sick leave as of August 2015:

  • Every state has a law requiring paid sick leave for at least some state workers.
  • Nine states have a law requiring that any employer already required to offer paid sick leave (i.e., for the most part, state workers) to also allow the time to be used to take care of a sick family member.
  • Three states (California, Connecticut, and Massachusetts) have a state-wide law requiring some level of paid sick leave to the majority of workers.
  • Many big cities all over – including Washington D.C.; New York City; Newark, NJ; Philadelphia; Seattle; and Portland, Oregon – require some amount of paid sick leave.
  • A lot more laws are pending in 2016.

In other words, this trend is a pretty big deal. However, there is a good chance you already knew that. After all, paid sick leave has been a big topic for a while now. Yet despite the fact that this issue has been around for a while, its intersection with PTO is projected to be one of the biggest HR issues of 2016. That tells you that people might be aware they need to offer paid sick leave, but might not be as aware that just offering PTO might not be enough.

The Intersection of PTO and Paid Sick Leave

The real point of this post isn’t to talk about paid sick leave, but sick leaves intersection with a single-bucket PTO system in general.

It is easy to assume that if you offer PTO, you have all your bases covered. And in a lot of cases, you might be right. However, there are times when offering a one-stop shop for paid leave just does not cut it.

There are several reasons this might be the case. For example, let’s pretend that a California employer offers a PTO system that requires employee’s to use PTO in at least four hour lumps. Yet the state’s paid sick leave law requires that sick leave can be used in at as little as two hour lumps.

Similarly, if that same California employer does not allow any PTO days to be carried over into the next year, then it might have a problem with California’s law that requires accrued sick time to be carried over.

You see how easy it is for problems to arise around this topic?

PTO does not have to be a problem, though. Where there is a paid sick leave law, there is no mandate that the sick leave requirements be offered on their own, separate from a PTO policy. However, if you do offer PTO instead of a discrete paid sick day policy, you need to take steps to make sure your PTO policy is also in compliance with any other leave laws that might apply to you.

Do this by reviewing the law and your policy and making sure they are in sync. Get some legal counsel on the matter. There is a lot you might need to worry about in 2016, but your PTO policy does not need to be one of those issues.

Other Predicted Issues for HR in 2016

Speaking of other things you may need to worry about in 2016, according to that same BNA report, here are some of the other legal issues that are expected to be big in the world of human resources this year:

  • As always, the Fair Labor Standards Act (FLSA), especially in regards to employee misclassification, is expected to remain a big issue for employers in 2016. In order to combat this issue, make sure you are classifying employees as exempt or nonexempt in a legally compliant manner, as well as complying with all of the FLSA’s other regulations.
  • Transgender equality is also expected to be big. The Equal Employment Opportunity Commission (EEOC) is pushing to pass more regulations that will ban discrimination against transgender people. So make sure to watch for laws and regulations on this issue in your city, county, or state.
  • Other discrimination issues that might be problematic this year are religious discrimination and national origin discrimination. It is predicted that recent terrorist events will put a spotlight on certain religions and national origins, which could play a negative role in hiring and employment decisions. Thus, organizations like the EEOC are on alert for signs of discrimination against these workers.

While there are many other things you might want to have on your radar in 2016, the four talked about here are expected to be big ones. So for starters, take some time to make sure you are on top of these issues in your workplace.

Hindsight is 20/20, but heeding advice from the experts and taking proactive steps to avoid problems can be 20/20 as well, only without all of the legal headaches that waiting until your problems show up in the rearview mirror can cause.

The Takeaway

The takeaway here is simple: do not just assume that your PTO policy covers all the bases of any required sick leave that you have to offer. Just because you are giving your employees paid time off does not mean you are meeting all the requirements of your state’s or city’s paid sick leave law.

Take active steps to check your policy with the requirements of any applicable laws. It does not have to be a long process or an expensive one, but the alternative of waiting until a problem occurs to realize you aren’t meeting the requirements could be both costly and time-consuming.

 

Ashley Shaw

By

Ashley Shaw is an experienced Legal Writer with years of experience. After receiving her JD, she worked for years in a corporate environment writing on business and employment law topics

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