Drafting a paid sick leave policy

Best practices for companies who want to adopt or update their PSL policies

This article provides guidance for employers that want to implement a PSL policy, either on a voluntary basis or to comply with one or more state or local PSL laws. It discusses preliminary PSL policy considerations, identifying which employees are eligible for paid leave, leave accrual, usage and carryover considerations, notice requirements, qualifying uses for leave, reserving employer rights, and employer best practices.

Adopting paid sick leave (PSL) policies can benefit employers because they:

  • Promote a healthy work environment by encouraging sick employees to stay home
  • Encourage employee wellness by allowing employees to treat illnesses and seek preventive care
  • Boost employee morale
  • Help employers gain a competitive advantage in hiring and benefits offerings
  • Allow employers to get ahead of mandated sick leave, as more jurisdictions continue to pass PSL laws

Many employers also must provide paid sick leave to their employees under various state and local laws. Between April 1 and December 31, 2020, private employers with fewer than 500 employees were expected to provide up to 80 hours of paid sick leave to all employees, with limited exceptions for qualifying reasons under the Emergency Paid Sick Leave Act (EPSLA), enacted as part of the Families First Coronavirus Response Act (FFCRA) in response to the COVID-19 pandemic

Preliminary paid sick policy considerations

Before implementing a PSL policy, employers should determine for every jurisdiction where the employer has employees whether:

  • Any state law mandates PSL.
  • Any city, county, or other municipal law mandates PSL or has been preempted by any subsequently passed state or federal law.
  • The employees perform work on any government contracts covered by the Executive Order signed by President Obama in September 2015, which requires PSL for certain federal contractor employees.
  • PSL legislation has been proposed or is pending.

Employers also should determine whether they are covered by the FFCRA and if so, recognize that FFCRA leave must be provided in addition to—and cannot diminish rights under—an employer's existing policy.

Identify employees covered by the paid sick leave policy

Employers should determine whether all employees are eligible for PSL, including full-time employees, part-time employees, managerial and supervisory employees, and temporary employees. The policy should explicitly state which employees or other service providers are not covered, such as independent contractors, volunteers, and employees subject to a collective bargaining agreement.

Determine leave accrual, usage, and carryover provisions allowed by the paid sick leave policy

Employers should determine how much leave employees accrue or receive under the policy, for example, whether to grant employees their full annual entitlement at the beginning of the year or allow employees to accrue leave based on days worked. The policy should specify when leave begins to accrue and whether covered employees must meet any minimum threshold to accrue leave, such as being employed for a specific amount of time or after working a minimum number of days. It also should indicate whether employees may begin using leave as soon as it is accrued or after working a specific number of hours.

It is important to define the benefit year (generally either the calendar year or a 12-month period designated by the employer) and to establish rules about the carryover of unused accrued leave into the next benefit year. The policy also should not require employees to find a replacement worker for their shift or scheduled hours before taking leave, as most PSL laws prohibit this practice.

Notice requirements for paid sick leave

Employers should specify procedures for employees to provide notice of their leave and require them to schedule their leave in a manner that does not unduly disrupt the employer's business operations. PSL policies typically require employees to provide 3 to 7 days' notice for foreseeable leave and notice as soon as practicable for unforeseeable leave.

Employers also should require employees to speak to their immediate supervisor to provide notice rather than have them leave a message or communicate through a coworker.

Define qualifying uses for paid sick leave

A PSL policy should define allowable reasons for using paid sick leave, which commonly include absences for the care, treatment, or diagnosis of an employee's own or family member's physical or mental illness or condition, and the closure of a workplace or childcare center due to a public health emergency. Some PSL laws also require leave to be used for bereavement, attending a school meeting for the employee's child, or specified activities arising from an employee being the victim of abuse or sexual assault.

Policies that allow leave to care for employees' family members should clearly define the scope of coverage, such as whether "family member" includes foster or adopted children, legally married spouses (including same-sex spouses), domestic partners, parents and children of any spouses or domestic partners, grandparents, siblings and stepsiblings, stepchildren and stepparents, and legal guardian or in loco parentis relationships.

Draft paid sick leave policy language that reserves rights and avoids risk

Employers covered by the FMLA or its state equivalent may reserve the right to require employees to use accrued PSL concurrently with any FMLA or state-equivalent protected leave. The policy should also provide that PSL does not continue to accrue while the employee is on FMLA or other leave, unless otherwise required by applicable law.

Many PSL laws allow employers to request certification that leave was used for a proper purpose under the policy but prevent employers from inquiring about the nature of an employee's medical condition necessitating leave. Employers should clearly define the circumstances under which it can request confirmation that the leave was used consistently under the policy and reserve the right to discipline employees that abuse the policy.

Employers should consider including an anti-retaliation provision, a disclaimer that the policy is not intended to infringe on employees' Section 7 rights under the National Labor Relations Act (NLRA), and a safe-harbor provision under the Genetic Information Nondiscrimination Act (GINA) to avoid liability for the inadvertent receipt of an employee's genetic information.

Employer best practices for paid sick leave policies

Employers should ensure the PSL policy is distributed to all employees by hard copy or electronically and obtain a signed acknowledgment of receipt from each employee. They also should consider providing notice about the policy provisions in multiple languages consistent with the employee population.

It is important that the policy apply consistently to all covered employees and that any exceptions do not make the employer vulnerable to claims of actual or perceived discrimination against a protected class.

Many PSL laws require employers to maintain records of leave accrual and usage for at least 3 years. Employers should ensure all records are clear and that they maintain strict confidentiality and segregation of employees' medical records.

When it comes to the technicalities of labor and employment law, you have no better resource than Practical Law. See for yourself with free access to the Drafting a Paid Sick Leave Policy Checklist, or get expert guidance on Confidentiality Agreements. For access to the complete depth and breadth of Practical Law resources, register for a free trial.

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