Sick leave pay is compensation paid to an employee when they are absent from work due to illness, injury, or preventive health care. This pay is usually offered when the absence is needed for the employee to care for themselves or a family member.
Providing paid time off for sickness is not a requirement across the United States, and it is typically viewed as a valued benefit.
Is Sick Leave Pay Required?
The Family and Medical Leave Act (FMLA) requires many businesses to provide unpaid leave to eligible employees. This means that you are not permitted to fire employees for taking sick leave, but your business isn’t required to pay them.
However, an increasing number of states do require your business to offer sick leave pay. As of 2022, these include Arizona, California, Colorado, Connecticut, Maine, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, and Washington.
Check with your state’s local Department of Labor office for assistance if you’re unsure of the regulations in your area.
How Much Sick Leave Pay Should I Offer?
Even without a national requirement, 78% of US workers receive some paid time off for illness-related absences.
According to the US Bureau of Labor Statistics, employees average 7 days of paid sick leave per year during their first 10 years of employment. This increases to 8 days for employees with 20 or more years of service. In general, employees who receive higher salaries also tend to receive more paid sick leave than those employees who earn lower pay.
You will need to offer as much sick leave pay as your local government requires by law as a minimum. From there, it’s a matter of how generous your budget allows you to be.
With this in mind, it’s important to understand how much sick leave pay your employees expect. As with other employee benefits, it’s worth researching the sick leave pay offered by your competitors. You can then consider either matching or exceeding it.
Why Paid Sick Leave Is Important
Paid sick leave is a valuable mechanism to support your employees and ensure a healthy workplace. The last thing you want is ill employees spreading diseases across your workforce because they cannot afford to miss a day. Paid sick leave will also help those employees take the time that they need to recover and be productive again.
Providing paid sick leave also helps to ensure that you’re able to attract and retain top talent. Furthermore, your employees will feel they are part of an organization that values their health and that of their families. This will boost morale and will have a positive effect on company culture.
Calculating Sick Leave Pay
If you do decide to offer sick leave pay, you’ll need to decide how it will be calculated. There are three common systems for calculating sick leave:
- Accrual. The employee accrues (earns) paid sick leave hours throughout the year. For example, an employee might accrue eight hours of sick leave for each month that they work.
- Lump sum. The employee is given a bank of paid sick leave hours at the start of the year. These hours are typically available to use immediately and no additional hours will be accrued until the next year.
- Unlimited. Employees have access to as much sick leave pay as they need in any given year. While generous and well-received by employees, this type of system requires monitoring to identify any abuse.
Best Practices for Creating a Sick Leave Pay Policy
All sick leave pay expectations and rules should be clearly set out in a written sick leave policy. Your policy should include these details:
- Legal compliance. Ensure that your policy meets FMLA and any state or local paid sick leave law requirements.
- Accrual calculation system. Be clear on how your employees will accrue sick leave pay hours or days.
- Rules on first usage. This should clarify when employees can first access sick leave pay. For instance, some employers do not allow sick leave pay until after an initial period of employment.
- Qualifying absences. This should establish which types of absence qualify for sick leave pay. This commonly includes personal illness or injury, care for a close family member, or medical and dental appointments.
- Request system. Explain how your employees should request sick leave pay. This may include notifying their supervisor when they will be out. Time-tracking software such as the Connecteam app can streamline this process for both employees and managers.
Sick leave pay is not required everywhere in the US, but it is a commonly expected benefit. It allows your employees to care for themselves or family members without loss of income. Providing sick leave pay can show that your company is dedicated to a healthy workplace, but it does require careful tracking. Craft a clear policy and make use of tracking software to ensure sick leave pay is accessed and delivered appropriately.