HR Expert Q & A – Paid Sick Leave

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.

Accrual Method:

  • 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

This document has been provided for informational purposes only and is not intended and should not be construed to constitute legal advice. Please contact your employment attorney in connection with any fact-specific situation in which you intend to take significant employment action. Readers agree that they will not hold Payroll Masters in indemnity and Payroll Masters assumes no liability. Payroll Masters is not engaged in rendering legal or accounting services. Therefore, Payroll Masters assumes no responsibility for claims arising from the use or implementation of the above information. 

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