Finding a Cure for Patchwork Paid Sick Leave Laws

February 7, 2019 - minute read

Part 1 in a Series on Pressing Paid Leave Issues

shutterstock_336196451Juggling various state and local paid sick leave laws (PSLL) is sparking headaches and ulcers throughout the HR community in companies that operate in multiple jurisdictions.

The U.S. is the only industrialized nation without a paid leave mandate—and while it’s one less federal law to deal with, its non-existence has created challenges nonetheless. To date, 10 states and 30+ municipalities have passed unique paid sick leave legislation. Each one is a law unto itself—and employers must follow them all.

The PSLL conundrum has spawned such a widespread challenge, it’s ranked one of the top regulatory issues of 2019, even as the benefit grows in popularity. So what’s an employer to do?

Paid Sick Leave Benefits Trend Upward

More and more employers are crafting paid sick leave policies—partly for compliance sake but also because employees want them.  

According to the Bureau of Labor Statistics, 74% of all workers have some type of paid sick leave benefit, up from 68% in 2017. As you might expect, salaried employees are more likely to have it than hourly workers are. 

While 90% of managerial and professional workers enjoy paid sick leave benefits, just 56% of service workers do. Similarly, while 93% of the top 10% of wage earners have it, only 31% of the lowest 10% of wage earners do.

For employers looking for ways to attract hourly workers during the current labor shortage, a competitive paid sick leave policy could be a compelling point of differentiation. In addition, offering a paid sick leave policy can lead to a healthier, more productive environment. Studies find that it’s more cost-effective for workers to take time off to get better than spread sickness in the workplace.

So even where you don’t need to offer paid sick leave, you still might want to—but how do you handle all the disparate plans?

Solutions on the Horizon?

The National Business Group on Health—a non-profit that represents large employers’ interests concerning health issues—formed an internal “Leave Optimization Forum” last fall. Their goal is to identify ways to improve corporate paid leave programs, and it will be interesting to see what they conclude.   

In addition, several pending bills related to paid sick leave and family leave are expected to resurface in the House of Representatives, buoyed by the new Democratic majority. 

These include The Workflex in the 21st Century Act, developed in collaboration with the Society of Human Resource Managers (SHRM). The objective of this bill is to eliminate the patchwork of state and local laws by offering employers the option of participating in a voluntary ERISA-qualified program. The opt-in paid sick leave program would set a national standard of paid time off that would supersede state and local programs, as well as options for flexible work arrangements.

Other bills in the running include the Family and Medical Insurance Leave (FAMILY) Act and the Healthy Families Act, both of which would require employers to provide employees with paid leave for sick employees and for the care of sick family members.  

PSLL in the Meantime

In the meantime, when it comes to PSLL compliance, multi-location employers are left with three options. They can:

  • Adopt a single, company-wide paid sick leave policy that incorporates the richest features of all the applicable PSLLs  
  • Comply with each applicable paid sick leave law, presumably by using a capital management system that can handle multiple regulations, or
  • Group similar paid sick leave laws into a single plan, reducing the number of PSLL policies an employer needs to manage. For example, an employer might group 12 PSLLs into three policies for easier administration. 

Each method has pros and cons. A unified paid sick leave policy may be easiest to administer, but harder to set up and more expensive to fund. On the other hand, if an employer wants to maintain separate plans for each jurisdiction, it requires advanced HR technology that’s equipped to support it.

As it happens, EPAY’s human capital management system was designed for employers managing an hourly, multi-site workforce. It’s built to handle infinite variables and can manage the specifics of multiple paid sick leave polices. In addition, its on-demand report capabilities make it easy for employers to meet record keeping requirements. 

If you’re already an EPAY customer, you can visit the EPAY compliance portal anytime for compliance updates and details. You can even sign up to receive email notifications every time there’s a ruling that may impact you. Not an EPAY customer (yet)? Take a few minutes to learn how we can help you paid sick leave compliance and a whole lot more. 

And if you’d like more information about PSLLs, watch our on-demand webinar, Navigating Paid Sick Leave Laws. Finally, keep an eye out for Part 2 of our new blog series on pressing paid leave issues!  

Filed Under: Compliance Human Capital Management Employee Benefits