It seems like paid sick leave laws are springing up everywhere, making labor compliance even more challenging for employers.
Currently, there are 37 such laws—some state-wide, most municipal—on the books. Come January 1, 2017, there will be four more, including the first national law, which affects federal contractors.
Every paid sick leave law is different, although they share some core components. Individually and taken together, they’re creating unique challenges for employers. Understanding these challenges and some available solutions can help your company better maintain paid sick leave law compliance, wherever you do business.
Challenge: Managing Differing “Accrual Caps” and “Usage Caps”
Most paid sick leave laws specify an accrual cap (the maximum amount of paid sick leave an employee can accrue) and usage cap (the maximum amount of paid sick leave an employee can use) for a specific time period. But sometimes the caps don’t match, which can lead to confused, unhappy employees.
For example, under Los Angeles’ paid sick leave law, the accrual cap is 72 hours at any point in time, but the usage cap is limited at 48 hours per year. (Up to 72 hours can be carried over at year-end.)
To overcome this, some employers make a point of communicating this in detail to employees and managers. Others elect to raise the usage cap to match the accrual cap, providing a more generous benefit than mandated in order to avoid potential conflicts.
Challenge: Choosing an Accrual System vs. a Frontloading System
Many paid sick leave laws offer employers the option of frontloading the annual maximum annual paid sick leave at the start of each year, rather than track accrued sick leave for each employee.
For example, under Executive Order 13706—which will affect federal contractors—employers can choose to frontload at least 56 hours of sick leave.
The advantage of frontloading is simplified recordkeeping—no tracking of accrued paid sick leave required. It’s also easier to communicate to employees. The disadvantage is that employers with a large part-time or temporary workforce may end up paying them for far more sick time than they would otherwise accrue.
Employers given this option should weigh the pros and cons of each system as it applies to their workforce, so they can make the best choice for their business.
Challenge: New Paid Sick Leave Law Starts Mid-Year, but Your PTO System Is Calendar Year
It’s not uncommon for paid sick leave laws to go into effect on July 1, versus January 1. For employers whose paid time off (PTO) systems are calendar year, this creates a dilemma. Do they change their PTO system to start mid-year? Or do they maintain separate tracking years for paid sick leave and other PTO?
Some employers have solved this issue by looking back to January 1 for accrued paid sick leave that first year, although it’s not required. It’s more expensive for employers, but those committed to maintaining their calendar year PTO schedule may feel it’s worth the expense.
Challenge: Maintaining Paid Sick Leave Law Compliance Across Multiple Locations
Because paid sick leave laws vary, maintaining compliance is especially tricky for employers who operate in multiple locations.
One solution is to adopt a company-wide paid sick leave policy that incorporates the most generous aspect of every applicable paid sick leave law. This, of course, can get very complex, not to mention expensive.
Another option is for employers to adopt a human capital management system that can accommodate infinite variations of paid sick leave law requirements. EPAY’s integrated human capital management solution is particularly adept at handling complexities like this.
How EPAY HCM Can Help
EPAY HCM was designed for employers managing a distributed workforce. As a result, it can easily handle any number of compliance-related variables.
Our robust time and attendance application can accommodate the requirements of every paid sick leave law accrual system for infinite employee groups. It offers managers real-time visibility regarding sick leave status.
Thanks to our HCM system’s advanced self-service features, employees can request paid sick leave through the system and view their paid sick leave balances 24/7. In addition, on-demand reports make it easy for employers to comply with paid sick leave law recordkeeping requirements.
And because EPAY HCM resides on one seamless platform, employers need only enter an employee’s information once to create one master record that flows through every HR application, from human resource management, to benefits administration, to time and attendance, to payroll and beyond.
To learn how EPAY HCM can help you manage paid sick leave law and more, schedule a personalized demo of our performance management software today!
This information is based on our webinar, Navigating Paid Sick Leave Laws, presented by attorney Tracy Billows, a partner in the Chicago office of Seyfarth and Shaw LLP. Click here to view the recorded webinar.