How to Craft a Fair and Compliant Sick Leave Policy: An Employer's Guide

When developing a comprehensive sick leave policy, there are a few things that employers need to keep in mind. It has to be compliant with local, state, and federal laws. Additionally, a sick leave policy needs to be clear, well-thought, and well-documented. Sick leave is particularly for those days when employees need time off work due to medical reasons, and it needs to be crafted in a way that is sensitive, compassionate, and supportive to employees. It should be fair to both sides - you as the employer and to your employees.

Crafting Sick Leave Policy

It doesn't stop there; once a policy is crafted, you need to ensure as an employer that it's communicated well to your employees - whether it be through bulletin boards, email, the onboarding education process, the company's portal, or any other means your company uses to communicate with your employees.

An easy way to create or update a sick leave policy is by addressing some important questions. Whether you're a small business owner or an established business looking to update your sick leave policy, this guide is for you. In this how-to guide, we’ve used a questioning format to help you, as an employer, thoughtfully consider all factors necessary to craft a compliant and fair sick leave policy. By following this step-by-step approach, you can develop a policy that benefits your business, is thorough and legally compliant, and supports your employees' well-being. Let’s begin!

Step by Step Guide in Creating a Fair Sick Leave Policy:

1. Define Your Sick Leave Policy

Combined PTO vs. Separate Sick Leave Policy: Decide whether you want to combine sick leave with other types of paid leave like vacation days or if you prefer to allocate a specific number of sick leave days per year. Some companies have a single PTO policy for all types of leave, while others keep sick leave separate from other types of paid leave. Choose the option that best suits your workforce. For more information, read Sick Leave vs PTO.

2. Define Eligibility

Who is eligible for sick leave? Are all employees eligible, or only those with a certain tenure?
What documentation or proof, if any, do employees need to provide when they take sick leave?
Can employees use sick leave immediately upon hire, or must they wait a certain period? A sample scenario to consider is the California paid sick leave where they would allow sick leave utilization for employees who have satisfied the 90-day employment period.
Are there provisions for part-time or temporary employees regarding sick leave?
Can sick leave be used to care for family members, or is it strictly for employee use?

3. Establish Sick Leave Calculations and Verify Compliance with State Laws

How many hours or days of sick leave do employees receive per year?
How is sick leave calculated and/or determined? Do you only follow what the state laws dictate? Or do you factor in their hours worked, length of service, or position in your company?
What are the state mandates or laws regarding sick leave? For example, California requires 40 hours of paid sick leave per year for employees who have been working for the same employer for at least 30 days within a year and have been working for at least 90 days for that same employer prior to taking sick leave. Check your state and make sure you remain compliant.

4. Clarify Sick Leave Accrual

How and when do employees accrue sick leave? Is it given in a lump-sum at the start of each year or is it accrued? If through accrual, when do they receive the sick leave allocation? Here, it’s important to clearly outline the accrual process, detailing whether sick leave is earned monthly, quarterly, or annually.
Do employees have an increased sick leave accrual the longer they stay with the company? Here, you need to specify if the accrual rate increases relative to the employees’ years of service.

5. Define Sick Leave Usage Procedures

What is the process for requesting sick leave—is there an online system to use, or is it a manual form that needs to be filled out and submitted to a manager?
What are the requirements you expect as an employer to grant the employee’s sick leave request? Do they need to submit a doctor’s note or a medical certificate to return to work after their sick leave?
If applicable, how many days in advance must employees provide notice for taking sick leave? All these details should be carefully considered and clearly communicated to your employees, ensuring they understand the procedures for utilizing sick leave should the need arise. Remember, the simpler the sick leave request process, the easier it is for employees to use, which helps keep them happy and feeling valued.
What happens if an employee runs out of sick leave allocation? Do you allow extended sick leave? If yes, is it with pay, or without? Make provisions clear for situations when employees deplete their sick leave.

6. Establish Sick Leave Notification and Approval Procedures

Who should employees notify if they need sick leave, and what is the preferred method of notification (email, phone call, HR system, etc.)?
Is there a specific timeframe within which employees must inform their supervisors? What is the procedure for notifying the employer in emergency situations where advance notice is not possible?
What is the approval process? How do employers notify the employees that their sick leave request is approved or denied?

7. Define Rollover Policy for Unused Sick Leave

Are there any carryover or rollover provisions if sick leave is unused at the end of the year?
If your organization allows sick leave carryover, do you have a cap on the number of days, or do you allow unlimited sick leave rollovers?
Does the state or local government have specific laws or regulations you need to be aware of regarding unused sick leave? For example, California states “…an employer may limit or cap the overall amount of sick leave an employee may accrue to 10 days or 80 hours, whichever is more.” This is why it’s important to keep up to date on your local and state laws and/or regulations.
What are the provisions for unused sick leave when an employee leaves the company, whether due to retirement, resignation, or termination? Does the policy include converting unused sick leave into a cash payout or other benefits? Specify the procedure for handling unused sick leave under different departure scenarios to ensure clarity and fairness for all employees.

8. Communicate Your Sick Leave Policy with Your Employees Effectively

Once you’ve crafted or updated your company’s sick leave policy, the next step is to communicate it effectively to your employees. This ensures they understand the ins and outs of the policy. Here are some strategies you can use to effectively communicate your new or updated sick leave policy to your employees.

Incorporate into Onboarding: Ensure that the new or updated sick leave policy is included in the onboarding process for new hires. This ensures that all employees, new and existing, are aware of the policy.
Include in Employee Handbook: Make sure the sick leave policy is clearly outlined in the employee handbook. This provides a permanent reference for employees.
Hold a Meeting or Workshop: Organize a meeting or workshop to introduce the new or updated sick leave policy. This allows employees to ask questions and get immediate clarification.
Distribute Written Materials: Provide a detailed document outlining the sick leave policy, which includes the accrual process, usage, FAQs, and handling of unused leave. This document can be distributed through email, posted on the company intranet, shared via other digital platforms, or handed out in print.
Use Visual Aids: Create infographics or flowcharts that summarize the key points of the sick leave policy. Visual aids can make the information more accessible and easier to understand.
Send Regular Reminders: Send periodic reminders about the sick leave policy, especially during flu season or other times when sick leave might be more common.
Designate and Brief Points of Contact: Identify specific people or teams, such as HR or managers, who can address any questions or concerns about the sick leave policy. Brief these points of contact on the details of the policy so they can effectively communicate and enforce it within their teams.
Establish Feedback Channels: Establish channels for employees to provide feedback or ask questions about the sick leave policy. This can help identify any areas of confusion and improve overall understanding.

For tips and effective strategies on communicating PTO policies to employees, read: Communicating PTO Policies to Employees: An Employer's Guide.

Conclusion

In essence, the questions outlined in each step above are just a few of the important considerations you, as an employer, should keep in mind. The answers to these questions will guide you in crafting a compliant and fair sick leave policy. A comprehensive policy should address the whats, the whens, and the hows. Make sure that your employees are also well-informed about how sick leave is accrued and what happens to unused sick leave at the end of the year. Clear communication and documentation of these details will help foster a transparent and supportive work environment. Remember, as an employer, a well-structured sick leave policy not only supports employees during times of illness but also contributes to their overall well-being and the smooth operation of the organization.