Sick Days: Are You Competitive? Legal?

It's important to be clear with your employees about how much sick time they get each year.
It's important to be clear with your employees about how much sick time they get each year.
It's important to be clear with your employees about how much sick time they get each year.
It’s important to be clear with your employees about how much sick time they get each year.

A generation ago, it was up to you as an employer to decide whether to offer your employee time off when they, or their spouse, child, or parent, became ill or incapacitated. Today about two-thirds of workers have some paid sick leave as a result of federal law, state law, local law, or employers just keeping up with your competitors.

The trend is clear: if you aren’t yet forced by law or competition to offer this benefit, likely you will be in the near future. Here’s what you need to know.

Federal law

The Family and Medical Leave Act, or FMLA, which became law in 1993, requires employers with 50 or more employees to grant up to 12 weeks of unpaid leave in a 12-month period for any of the following:

  • Birth of a child and to care for the newborn child within one year of birth;
  • Placement with the employee of a child for adoption or foster care and to care for the newly placed child within one year of placement;
  • Caring for the employee’s spouse, child, or parent who has a serious health condition;
  • A serious health condition that makes the employee unable to perform the essential functions of his or her job;
  • Any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty.”

There’s 26-week unpaid leave time if the eligible employee is taking leave to care for a service member who is a spouse, child, parent, or next of kin (military caregiver leave).

Under an executive order issued in 2015, federal contractors are required to offer 7 days of paid sick leave. It applies to contracts for government solicitations issued on or after January 1, 2017.

State laws

Some states are moving toward paid leave sick days. The period for paid leave and the size of employers subject to the laws varies considerably. For example, in Connecticut, the law only applies to employers with 50 or more employees, in California it’s 30 employees, and in Massachusetts, Oregon, and Vermont it’s all employees who work a certain number hours or at certain jobs and are not exempt from this benefit.

Local laws

Whether or not there are state laws mandating employers to provide paid sick days, some cities are doing so. Many of these laws apply to small employers (e.g., in Seattle the law applies for those with more than 4 employees); the amount of time off and rate of pay varies greatly. For example, in San Francisco it’s 9 days (starting in 2017), in Los Angeles it’s 6 days, in San Diego it’s 5 days.

Find a complete list (as of September 15, 2016) from A Better Balance.

Competitors

As the job market heats up, even if the law does not mandate that you offer sick days, you may be forced to offer the benefit in order to compete for talented workers. You can craft your sick-days policy in any way you want. Many companies offer a fixed number of paid days per year, allowing workers to take them for vacation, sick days, or personal days at their choosing. You can scale the number of days to the length of an employee’s employment. Except as the law requires, your sick-leave policy is up to you.

My take on sick days

As a small business owner myself, I’m of the view that your sick day policy should be very responsive to employees’ needs. I suggest offering unlimited paid sick days so that your staff can be healthy and unstressed if they (or a close family member) fall ill or have an accident that keeps them from working for a short while (longer periods off are covered by short-term disability, workers’ compensation, and other insurance arrangements). In a small company, everyone understands that if one person is out, the burden falls on another, so it’s unlikely for anyone to abuse this benefit. If someone is abusing it, that person may not be a good fit in your company in the long run. Think about it.

NOTE: This guest article was originally authored by Barbara Weltman and has been republished by 1-800Accountant with permission.

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