Understanding Mandatory Paid Sick Leave and Your Independent Contractors

Mandatory paid sick leave must be provided to your employees…but what about your independent contractors?

Mandatory paid sick leave…

Who would have guessed that this aspect of employment can be confusing?

Perhaps you feel that you already know ALL about paid time off. I might say “That’s great. However, I really need to hone in on this to ensure that you know exactly when you as an employer must provide sick pay”.

Why?

A solid understanding of when you must offer mandatory paid sick leave is crucial to ensure that you are in compliance with labor laws.

Nobody…and I mean nobody, wants the Department of Labor knocking on their door because they didn’t know which of their workers were entitled to sick pay!

Are my independent contractors entitled to mandatory paid sick leave?

Short answer – No

Long answer?

Well, let’s use Emily Employee and Frank Freelancer to draw a comparison.

As an independent contractor, Frank Freelancer is not entitled to mandatory paid sick leave.

But Emily Employee is entitled under employment regulations if they are applicable in her city or state.

This means that she can take time off if she is unwell or needs to care for a family member’s health without repercussions. As an employer, it’s Barbara Business-Owner’s responsibility to provide this paid sick leave to Emily to comply with labor laws.  All cities and states have different regulations on how an employee can use this mandatory time off so be sure you are following the appropriate regulation. 

What if my independent contractor wants some time off?

Your freelancers are more than welcome to take as much time off as they need. However, you would not be obligated to pay them for their time off. Rather, you might come to agreement that work and payments would be delivered around their leave or put on hold until their schedule allows them to move forward with the agreed upon scope of work.

When does mandatory paid sick leave become a problem?

Great question.

Remember that sick leave  is reserved exclusively for employees.

Let’s say however you have an independent contractor who is starting to expect paid vacation or sick leave.

If one could reasonably look at work that they do for your company or by drawing a comparison to an employee who is holding a comparable position to them – and assume that they would be paid sick leave – you may have a problem – and that worker may have cause to file a complaint.

For example, if Barbara Business-Owner feels as though Frank Freelancer should be treated as an employee with benefits, but was hired, managed, and paid as an independent contractor, this can lead to serious violations of labor laws.

If something seems like a mismatch it most likely is and needs immediate attention!

So what is the solution?

It is important for you as a business owner to assess the nature of the relationship between your business and your workers. The classification of your workers must reflect the nature of their engagement with your business.

There are a number of factors that define if your workers are meeting regulatory parameters of independent contractors. Factors such as Behavioral Control, Financial Control, Relationship of the Parties, and Nature of Work.

The most important tip I have for you is to be proactive and have open conversations with your workers.

Sometimes freelancers feel as though they should be entitled to mandatory sick pay and other employee benefits, but they don’t know how to bring up their concerns.

Therefore, it is your responsibility as a business owner to pose these questions to your workers and evaluate any concerns seriously. Ensure that you seek legal guidance to help resolve the issue appropriately.

You don’t want the Department of Labor knocking at your door for an audit because you didn’t realize you were supposed to be providing mandatory paid sick leave to one of your workers.

And that is what we are here for!

We want to help you to leverage all the advantages of hiring independent contractors without the risk of an audit.

Now, you may not want the Department of Labor taking a deep dive into your business and your workers. So allow me!

During our consultation, we will take a look into your relationship with your workers, and determine if you need to make any changes.

Contact us today to prevent an audit tomorrow!

ClearPath is a leading Human Resources Outsourcing company focusing on assisting employers to leverage the independent contractor labor market. We’re committed to helping business owners stay compliant and minimize the risks associated with their contingent labor requirements.

No Legal Advice Intended. This article includes general information about legal issues and developments in the law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. You need to contact a lawyer licensed in your jurisdiction for advice on specific legal issues.