When choosing between Paid Sick Leave’s (PSL’s) accrual method or the up-front (lump sum) method of distributing PSL, there are advantages and disadvantages to both. Additionally, the work schedules, OT requirements, wage orders, and number of full-time, part-time, seasonal/temporary employees are unique to each employer. So much to consider! Here are a few simple considerations you might like to review. Remember, you CAN change your distribution method – preferably with strategic planning, cost analysis, and advance notice.
Up-Front (Lump Sum) Method:
- Easy to administer: one lump sum distribution and no carry over. If administration and tracking is easy, then it’s cost effective.
- May not be fair to all employees: employees who work only a very few hours per week, or who don’t work a full year, will get an equal amount of PSL as those employees who work full-time (and OT).
- Note: You could give regular, full-time employees more than 3 days of PSL, and give part-time and seasonal/temporary employees the legal minimum of 3 days. This is allowed because you would give different benefits to different employee classifications.
- This may be easier to administer if all of your other benefits are based on an accrual method. The set-up is already established and there cost effective.
- If you don’t have the accrual method already set-up in your system, it may be burdensome and time consuming to set-up. That’s expensive.
- This method is fair to all employees because the amount of PSL they earn is directly correlated to how much time they work.
- With no accrual cap, full-time employees can accrue almost 9 days of PSL – more when you count OT. If you have lots of full-time employees and lots of OT, this could be expensive.
- Note: You can cap accruals and carry-over at 6 days.
Source: Article by Kathrine Parsons, SPHR-CA, TPO
Copyright 2015 TPO The HR Experts 2015 – all rights reserved. www.tpohr.com
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