8 Things That Recruiters Should Know About Paid Sick Leave
Paid sick leave (PSL) is an important topic that is constantly evolving. Whether you run contractors through your own back-office or outsource to a back-office service provider, you need to be familiar with this employment law area that affects both you and your contractors.
If you don’t currently place contractors in a geographical area that requires PSL or has it on an upcoming ballot, the lack of PSL laws at the federal level may have left you uninformed on this subject.
Since 2013, the number of cities and states requiring PSL has more than tripled. This number will likely continue to grow since 21 other states are currently considering statewide legislation. If PSL does not impact you now, it probably will soon.
If you run your own back-office (particularly if you place contractors in more than one U.S. location), there are many variables to consider. Below are eight things to know about paid sick leave laws:
#1—Staying ‘in the know’
Keeping on top of the new areas mandating PSL is easier said than done. The requirements are enacted either at the state or municipal level, so finding a single source to provide you with updates is unlikely. You must be proactive about searching out new bills on ballots, whether they pass or fail, and the specific compliance requirements that take effect if they do pass.
#2—Will it affect you?
Not all PSL laws affect every employer within a location the same way. Certain requirements—whether an employer is liable, whether the leave time must be paid, and how much time must be provided—vary based on the size and industry of the employer.
Paid sick leave is handled differently by every location, which makes keeping track of the variances an administrative burden on you. The effective accrual date, the rate of accrual, the maximum accrual, the maximum usage, the end-of-year carryover, and the rehire provisions and policies can all vary greatly.
#4—One law trumps another
Sometimes, a location can be affected by PSL laws at both the state and local level. For example, San Francisco has a city-specific PSL law, but the city is also covered by the California statewide PSL law. The San Francisco City ordinance is more generous in the amount of sick time allowed per year, but the California state law is richer in regards to the rehire provision. When faced with this situation, the employer must provide whichever provision or benefit is more generous to the employee.
Each location with a PSL law requires that the employer of record notify the employee of their PSL entitlements. Making the issue even more complicated, some locations provide model notices for employers to use, but in most cases the employer has to create their own.
As the employer of record, you must track accruals carefully and provide employees a way to access updated records indicating the leave they have earned and are allowed to use. Depending on the laws in place, the record keeping and retention requirements may vary a great deal.
The guidelines for rehire provisions vary by location, but they generally state that if an employee is rehired within a certain number of months, the employer is required to restore any accrued and unused paid sick leave. Again, this reinstatement is not a client-specific requirement; it is based on location. Therefore, an employee who ends a contract with one client and begins another with a different client in the same location necessitates that you (the employer of record) observe the applicable rehire requirements.
The most common PSL accrual rate is one hour of leave for every 30 hours of work time. You must decide how you will handle this added cost. Will your agency account for it within your own back-office pricing structure, or invoice the cost back to the client?
As you can see, PSL is not an easy area of employment law to navigate. This article offers only an overview of some of the important PSL considerations, and it is likely to become even more complex over time.
The issue of potential PSL rehire provision reciprocity between locations has yet to be addressed. Furthermore, even if a nationwide mandate is someday put into effect, it may not simplify things for all employers. It will come down to whether employers are still required to provide the more generous provision or benefit of all applicable PSL laws.
If this sounds like a headache to track and implement within your own office, consider outsourcing to a back-office service provider. Make sure that you select a provider that will put the necessary effort into ongoing tracking and observation of the changes in law.
After all, you want to be certain that they will completely take the burden off YOU.