No Two Alike: Paid Sick Leave Rules Vary Greatly Across the US

Not all paid sick leave laws in the United States are the same, and employers should review their leave policies to ensure that they are in compliance with all applicable laws, a payroll professional said on May 16.

Many states and localities have been enacting paid sick leave laws in recent years, said Beth Baerman, director of communications and compliance for Attendance on Demand. During the Covid-19 pandemic, 36 government entities passed emergency paid sick leave laws. Although most of these laws have expired following the end of the state and federal pandemic-related public health emergencies, 46 states and localities still have permanent paid sick leave laws that affect private employers.

“The pieces of each paid sick leave law are of a slightly different shape,” she said at the 41st Payroll Congress. “Employers need to know the key components of these laws so they can be compliant across the board.”

Employers should first review the coverage and eligibility requirements of any paid sick leave law, she advised. Many, but not all, paid sick leave laws specifically exclude employers with a small number of employees. However, some laws only count employees within a specific jurisdiction, while others count all of an employer’s employees regardless of where the employees are located.

“If you have employees that always work at the same location, whether at home or in the office, counting employees isn’t very hard,” she said. “However, if you have an employee who spends some time working at home away from a certain jurisdiction, or if you have an employee who travels a lot, counting employees can become a difficult question.”

Luckily, most states and localities with paid sick leave laws create accompanying rules and regulations that can provide additional information and assist employers with compliance, added Lia Coniglio, a senior manager at PayrollOrg. Court decisions concerning paid sick leave laws can also offer guidance for employers.

“When a state or locality enacts a law, the agency in charge of administering the law can create rules and regulations that can guide and explain the provisions of the law,” she said. “Hopefully, the state or locality can come out with draft rules and regulations as well, so employers can submit comments that will be taken into account.”

Once employers determine if a paid sick leave law covers them, they must then figure out which employees are covered, as well as the accrual rate, pay rate, and any usage limitations of the paid leave, Baerman said.

If an employer and its employees are subject to state and local paid sick leave laws, the employer must ensure that its leave policy complies with both, Coniglio added.

“Usually, there will be a state law and a locality in the state will enact a paid leave law that is more generous than the state law,” she said. “So, you have to comply with the aspects of the laws that are the most generous to the employee.”

Employers subject to multiple paid sick leave laws might consider creating multiple jurisdiction-specific paid sick leave policies or a single sick leave policy that is generous enough to comply with all applicable paid sick leave laws, Baerman said. Employers can also form a paid time-off bank that covers all forms of leave, but paid time-off banks can be confusing for employees.

“Employers sometimes find that employees use the leave in their paid time-off bank for vacations and then get sick but no longer have leave to take,” she warned. “Some employees don’t understand, even if you communicate it to them. So, some employers find that these banks are more hassle than they are worth.”

Even if some employers are not subject to paid sick leave laws currently, it is still useful to review their policies in the event their state or locality enacts a paid sick leave law in the future, Coniglio said.

“If you have a paid sick leave policy and a new law is passed in the jurisdiction you are in, you need to take a look at your policy,” she said. “You have to go through it and make sure that your policy is at least matching the requirements ordered by the state or locality.”