Paid Family Leave vs Mandatory Sick Pay

Brandon Business Owner has just scheduled a call with Holly Human Resources to understand why an additional policy for Sick Pay had been added to the Employee Handbook. Brandon was sure that they had already covered everything they needed to based on the Family and Medical Leave Act.

This is when Holly Human Resources explained the importance of local laws: their state had recently enacted additional laws that regulated Sick Pay as well as Family Leave. This is what Holly explained to Brandon.

The FMLA: Just the Beginning

It’s a common misconception that the Federal Family and Medical Leave Act (FMLA), is the same as Paid Family Leave (PFL) or Mandatory Sick Pay (MSP).

The FMLA, established in 1993, is a federal statute that affords eligible employees unpaid, yet job-protected leave for specified family and medical reasons. On the other hand, PFL and Mandatory Sick Pay or Sick Leave are state-level regulations, requiring compliance with laws applicable to the respective states where your employees operate.

These local regulations mandate that eligible employees receive paid compensation during their leave, a distinction which is absent in FMLA provisions.

Paid Family Leave

Paid family leave is a state-specific program that provides employees with paid time off from work to attend to family responsibilities. This ensures that employees receive a percentage of their regular salary while on leave.

Although commonly associated with maternity/paternity leave for the care of newborns, newly adopted children or foster children, paid family leave covers additional cases. It allows workers to take time off to address their own serious health conditions, care for a family member facing a serious health condition or manage family matters arising from a military service member’s deployment.

The parameters of paid family leave programs vary by state. Each state sets forth its own criteria regarding eligibility, duration of leave, and the percentage of wages covered during the leave period.

Presently, only 11 states offer paid family leave, with eligibility often taking into account factors such as the employee’s work history, earnings, and the reason for seeking leave. Eligibility requirements can differ from one state to another.

Mandatory Paid Sick Leave

Paid sick time refers to short-term leave that employees can utilize when they are sick, injured, or undergoing medical treatment. This includes both severe conditions as well as common health issues, such as the flu. Employees may also utilize their sick time to attend to the health needs of a family member.

Distinct from paid vacation time or leave for personal matters, paid sick leave ensures that employees can address their health needs without experiencing a loss of pay and potential financial hardship.

While there is currently no federal mandate, private employers in various states and municipalities across the US are obligated to offer some form of paid sick leave to eligible employees.  Companies operating across multiple states or localities with differing laws must respond to each regulation to ensure compliance with all federal and state laws.

Employers may craft their sick time to be earned based on weekly hours worked or it can be allocated from a predetermined bank of sick time annually. Either way, sick leave is typically required to be calculated to account for the employee’s base pay compensation.

Failure to comply with these paid leave mandates is equivalent to withholding wages, resulting in potential penalties from local agencies.

As Holly finished her explanation to Brandon, she flipped the updated employee handbook to show him what their policy now stated and how it reflected their new state mandates. Brandon thanked Holly for always having their business’s employee compliance up to date.

For a customized employee compliance plan for your business, contact us today.

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.