State Paid Leave Laws Come in All Shapes and Sizes

July 11, 2025, 8:41 PM UTC

States and localities have enacted several different types of paid leave laws in recent years, and employers should have internal procedures and processes to ensure compliance with them, a payroll expert said July 10.

Currently, 23 states have paid leave laws, and there is little consistency among them, said Alice Jacobsohn, Esq., PayrollOrg’s government relations director. Some states offer family-leave insurance, others provide leave for any reason, and six states have separate temporary disability insurance laws, she added.

Employers not only need to know what laws apply to them but also keep track of any future changes to those laws, she said. For example, Oregon recently modified its existing leave law to allow leave for blood donation starting in 2026, she said.

Tracking changes can be difficult, especially when some states, like California, allow localities to create their own paid leave laws, she said.

“While this provides autonomy at the local level, and potentially greater access to government decision makers by residents, the result is a tracking nightmare for employers and payroll departments,” Jacobsohn said. “Yet, the total number of local jurisdictions with mandates is still relatively low.”

Jacobsohn spoke at PayrollOrg’s Virtual Congress.

Most states require employees to accrue one hour of leave for every 30 or 40 hours worked, depending on the state, she said. However, some add wrinkles to their accrual calculations. In Arizona, for example, the maximum amount of leave an employee can accrue depends on the size of the employer, while New York limits accrued leave amounts for different employers based on their revenue and number of employees, she said.

When it comes to calculating paid leave, employers must know the relevant state accrual rate and the length of the employee’s workweek, Jacobsohn said. For example, an employee with a 40-hour workweek in a state that requires one hour of leave to be earned for every 30 hours worked would accrue 1.33 hours of leave per week. If the state limits annual leave accrual to 40 hours, the employee would stop accumulating leave after roughly 30 weeks, she explained.

The employer could avoid this calculation by providing the 40 hours of leave at the beginning of the year, but that comes with its own risks, she warned. For instance, the employee could take more leave than would have been earned had it not been all available at the start of the year.

Employers need to know where their employees work to comply with relevant state paid leave laws, including any individuals working remotely, she said. An employee’s work location will largely determine which paid leave law applies.

“Today, more employees are working remotely, but don’t make your process more difficult than necessary,” Jacobsohn said. “For example, if an employee lives in Illinois performing work for a Michigan-based employer, for paid sick leave purposes, all you need to know is that the work state is Illinois.”

Company policies should conform to relevant state requirements, but employers may want to add their own provisions regarding paid leave, including its use, the increments of leave that may be taken, and how much leave can be carried over annually, she said. Jacobsohn noted that she once worked for an employer that did not have a paid leave policy, and a 20-year employee left with eight years’ worth of unused paid leave, which resulted in a costly payment from the employer.

Regardless of the policies that employers choose to adopt, they must ensure that all employees are treated fairly unless a distinction can be applied, such as between full- and part-time employees. Additionally, employers should have a process for employees to ask questions or submit complaints and appeals relating to their paid leave, she said.

“While this is usually a human resources issue, you may notice some problems when calculating leave and establish a payroll policy about when you will notify human resources,” she said.

To contact the reporter on this story: Emmanuel Elone in Washington at eelone@bloombergindustry.com

To contact the editor responsible for this story: William Dunn at wdunn@bloombergindustry.com

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