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Updated Oct 20, 2023

Sick Leave Laws Your Business Should Know

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Max Freedman, Business Operations Insider and Senior Analyst

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Your employees are going to get sick. Sometimes, they may be able to work through it but, other times, it’s better for them to take time off to recover. That’s why sick leave laws exist. These laws vary by state ― and some states don’t have sick leave laws at all. Federal rules also exist. As an employer, it’s vital to have a clear understanding of sick leave laws and how they apply to your business and employees.

Editor’s note: Looking for the right time and attendance system for your business? Fill out the questionnaire below to have our vendor partners contact you about your needs.

What is sick leave, and how do sick leave laws work?

Sick leave is an employee benefit that entitles workers to time off when they ― or, in some cases, close family members ― are ill. In some instances, employees can use sick leave to seek physical or mental health treatment related to domestic violence.

Generally, employees accrue one hour of paid sick leave every time they work a predetermined number of hours; there’s usually a cap on how many days off they can earn. Here are some examples by state: 

  • New Jersey: In New Jersey, employees accrue one hour of paid sick leave for every 30 hours they work and can earn at most 40 hours of paid sick leave per year. 
  • Arizona: If you’re doing business in Arizona, paid sick leave accrual works the same as in New Jersey, with one exception. The maximum number of sick leave hours that employees of Arizona businesses with fewer than 15 employees can accrue is 24. New Jersey makes no such size distinctions. 
  • California: If you’re running a business in California, the state enforces the same accrual rule as New Jersey, but more loosely. Any accrual schedule through which an employee accrues at least 24 paid sick leave hours by their 120th calendar day of work satisfies California law.

While sick leave laws vary by state, no federal laws currently require employers to provide paid sick leave. However, if your business is subject to the federal Family and Medical Leave Act (FMLA), your employees are entitled to sick leave, albeit unpaid.

Did You Know?Did you know

Some states have laws preventing employers from requiring employees to use sick leave and vacation pay if they have jury duty.

How can you track and manage sick leave?

Most sick leave laws don’t explicitly state how employers must track employees’ accrued sick leave and usage. However, it’s essential to have consistent sick leave management policies in place. Implementing reliable sick leave management policies helps track how much sick time your employees have accrued and used. Good tracking practices also keep you compliant with sick leave laws.

To effectively track and manage your employees’ sick days, create sick leave guidelines as part of your company’s paid-time-off (PTO) policies and make them available in your employee handbook. Ensure you fulfill all the conditions that sick leave laws require and include provisions for how your company will track your employees’ sick leave. 

One of these three tracking options are likely best for your business:

  • Track sick leave with a spreadsheet: As with virtually any business-related numerical function, you can use a spreadsheet to track your employees’ accrued and used paid sick days. Create separate columns for accrued sick leave, used sick leave and remaining sick leave and then create a row for each employee. You may also want to add a column for each type of family or medical leave, including personal leave, parental leave and child care leave.
  • Track sick leave with payroll software: Payroll software tracks and calculates the hours your employees worked and corresponding wages. Some of the best payroll software options also track paid time off, including sick leave accrual and usage. If your payroll software includes human resources functions and time and attendance tracking, it should be capable of tracking sick leave.
  • Track sick leave with time and attendance systems: In addition to online payroll systems, the best time and attendance software can track and manage PTO. Many time and attendance solutions also allow employees to request days off and allow managers to approve or deny those requests.
TipTip

Time and attendance systems can also help your business comply with federal overtime rules.

Sick leave FAQs

Not all states have sick leave laws, and no two states’ laws are identical. This lack of consistency causes many business owners to have questions about what sick leave law compliance entails. The following questions and answers should help you understand the intricacies of sick leave laws:

What are the federal rules for sick leave?

The FMLA governs federal sick leave law. Under the FMLA, eligible employees can receive up to 12 weeks of unpaid, job-protected leave. Note that the FMLA does not outline any provisions for paid sick leave.

The FMLA entitles eligible employees to return to the same job, or an equivalent job, with your company upon their return from leave. If one of your employees takes FMLA leave, you may not alter or terminate their health insurance and benefits.

According to the FMLA, employees eligible for unpaid sick leave must meet all the following criteria:

  • They must be employed by a public agency or a private business that employs at least 50 employees for at least 20 work weeks.
  • If employed by a private employer, the employee must work at a location where at least 50 other company employees work within 75 miles.
  • They must have worked at least 1,250 hours in the 12 months before their FMLA leave begins.
  • They must have worked at least 12 months in the seven years before their FMLA leave begins unless interruptions in work were due to military leave or permitted through a collective bargaining agreement.

An eligible employee can take leave for the following reasons:

  • To spend time with a new child. This provision applies to childbirth, adopting children and fostering children. 
  • To care for a spouse, child or parent with a serious health condition. Serious health conditions include, but are not limited to, the following:
    • Overnight stays in medical facilities
    • Illnesses and injuries that prevent work or school attendance for at least three consecutive days and require ongoing medical treatment
    • Chronic conditions that prevent work or school attendance at least twice per year
    • Pregnancy and any related medical testing or symptoms
  • To care for their own serious health condition.
  • To attend to any urgent health needs of a spouse, child or parent on covered active duty or call to covered active duty status for the National Guard, reserves or regular armed forces.

In addition to the military provision, the FMLA’s 12 weeks of unpaid leave expands to 26 weeks if the person in question is a covered military serviceperson.

Which states pay sick leave?

The following states have sick leave laws requiring employers to offer paid sick leave to eligible employees:

  • Arizona
  • California, with additional sick leave laws in Berkeley, Emeryville, Los Angeles, Oakland, San Diego, San Francisco, Santa Monica and West Hollywood
  • Colorado
  • Connecticut
  • Maine
  • Maryland
  • Massachusetts
  • Michigan
  • Nevada
  • New Jersey, with additional sick leave laws in Bloomfield, East Orange, Irvington, Jersey City, Montclair, Newark, Passaic, Paterson and Trenton
  • New Mexico
  • Oregon, with additional sick leave laws in Portland
  • Rhode Island
  • Vermont
  • Washington, with additional sick leave laws in Seattle and Tacoma

The following cities and counties have their own paid sick leave laws despite no state-level regulations:

  • Chicago
  • Cook County, Illinois
  • Montgomery County, Maryland
  • Bloomington, Minnesota
  • Duluth, Minnesota
  • Minneapolis
  • Paul, Minnesota
  • Westchester County, New York
  • New York
  • Allegheny County, Pennsylvania 
  • Philadelphia
  • Pittsburgh
  • Austin, Texas
  • Dallas
  • San Antonio
  • Washington

If your business operates in any of these locations, you must comply with their sick leave laws.

Did You Know?Did you know

Aside from sick leave laws, other surprising laws that may apply to your business include proper employee classification, legally mandated workers’ compensation insurance and family leave mandates.

Does paid sick leave apply to all employees?

Most state, city and county paid sick leave laws cover all employees. On the other hand, the FMLA, the only federal sick leave law, does not cover paid sick leave at all.

What is mandated sick leave?

Mandated sick leave is any sick leave time an employer must give to an employee as set forth by their state, county or city. Mandated sick leave also refers to the unpaid sick leave time employers must give employees under the FMLA.

How do public health emergencies affect mandated sick leave?

The government may implement expanded, temporary mandated sick leave laws during public health emergencies. That’s exactly what happened at the outset of the COVID-19 pandemic when the United States Congress included mandated sick leave as part of the Families First Coronavirus Response Act. This act expired at the end of 2020. Although no longer in effect, it remains a relevant example of how mandated sick leave regulations can shift during public health emergencies.

What happens if an employer rehires an employee who had unused sick leave?

In many states, cities and counties that require employers to provide paid sick leave, employers must reinstate all previously unused sick time for employees they rehire within a law-specified time frame. Consult your region’s sick leave laws to determine the time frame that applies to you.

Can an employer refuse sick time?

If your location’s law requires you to offer sick time, you cannot deny your employees the opportunity to use it. If you do so, you may face lawsuits from your employees.

Does sick pay reset every calendar year?

In many locations that require employers to provide paid sick leave, employees can carry sick leave accrued in one calendar year into the following year. However, the maximum number of paid sick hours employees can take per year will remain unchanged.

How much is an employee required to be paid for sick time used?

While the answer to this question may vary by location, paid sick leave laws often call for employers to pay for sick leave at the same rates they would pay employees for standard work hours. However, there may be a daily cap on sick leave compensation.

How does the sick time law apply to temporary employees?

Only California, Washington, New Mexico and Portland, Oregon, include temporary employees in their sick leave laws. If your company operates in any of these locations, consult your location’s sick leave laws to determine how you must tally and provide temporary employees with paid sick leave.

Your employees may be entitled to paid sick leave

If paid sick leave laws cover your city, county or state, you must comply if your business qualifies. Plus, paying your employees when they’re sick is kind, even ― or especially ― if you operate in a jurisdiction lacking paid sick leave laws. After all, paid sick leave laws have proliferated from the 2010s onward since employees have demanded them. The more you can do to make your employees happy, the better work they’ll do ― paid leave policies correspond directly with great business outcomes.

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Max Freedman, Business Operations Insider and Senior Analyst
Max Freedman has spent nearly a decade providing entrepreneurs and business operators with actionable advice they can use to launch and grow their businesses. Max has direct experience helping run a small business, performs hands-on reviews and has real-world experience with the categories he covers, such as accounting software and digital payroll solutions, as well as leading small business lenders and employee retirement providers. Max has written hundreds of articles for Business News Daily on a range of valuable topics, including small business funding, time and attendance, marketing and human resources.
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