I work with small to mid size businesses in the Auburn area supporting their Office, Bookkeeping and Payroll needs. I try to stay on top of what is going on out there so I can give my clients the best service possible. I recently attended a business luncheon in Auburn and the topic was “Legal Updates for 2015.” Although the topic sounded incredibly boring, to my surprise it wasn’t. The speaker was David W. Tyra, an Attorney with Kronick Moskovitz Tiedemann & Girard.
One item that David spoke about was the “Healthy Workplaces, Healthy Families Act of 2014.” You might be wondering why Suzanne is informing you of old news from 2014. First of all, very few small businesses are even aware of this Act. Second, it will need to be implemented in your workplace by July 1, 2015 if you have employees on payroll.
Summary overview of the Healthy Workplaces, Healthy Families of Act of 2014
I am going to give you a simple summary and then will tell you where you can go to get ….the rest of the story. Better yet, I’ll provide you a link. The Healthy Workplaces, Healthy Families of Act of 2014 basically states that you must provide paid sick leave to all employees. “All” means “All” and that includes temporary as well as part time workers. Anyone on your payroll that has worked at least 90 days for you gets paid sick leave. They are entitled to 24 hours a year or 3 days a year whichever is greater. For example, if you have an employee that works 9 hour days they will need to be paid 27 hours a year.
How much do I pay my employees for sick pay?
Hourly employees are paid out at their regular hourly rate. You will need figure out what that rate is for those on salary or commission. To do so you will take the total wages for a full pay period and subtract any overtime pay. Take the hours worked in a full pay period and subtract any overtime hours. Next you will take your total wages and divide by your total hours to determine their hourly rate. Last but not least, double check that this is correct by clicking on the link that I will provide at the end of this article and get advice from those “in the know.”
What steps does your business need to take to implement?
- Revise your employee handbooks
- Notify your employees
- Post an updated poster in your break room
- Decide if you want to accrue sick time or give the employee 3 days up front
- Make sure whomever handles your Payroll knows about this Act
- Modify your Payroll stub if needed (Sick time balance must be on each paystub)
Accrue or Not to Accrue that is the question
You basically have two options to administer keeping track of sick time and they are:
- You can give all your employees 3 days of sick pay up front for the year.
- You can accrue your employee’s sick pay throughout the year making sure that by the end of the year they have accrued 3 days.
Pros & Cons of how you administer
Let’s say you hire Sam and he has worked for you for 30 days. Your policy is to give your employees the 3 days sick pay up front. After 30 days Sam will see his 3 days of sick pay available on his paystub. Sam suddenly becomes sick and takes three days off. He comes back to work for a few days and then decides the job isn’t working out so he quits. Sam worked for you for a little over 1 month yet he got to use a years’ worth of sick pay.
Another scenario would be that Sam decided not to quit and he stays on your payroll for a year. The next year he is given 3 sick days up front again. If he doesn’t use them that year they don’t rollover to the next year. The next year he will simply get 3 new ones.
Now let’s talk about Sara. She is hired on at your brother’s company. Their policy is to accrue the sick time. Sara is very healthy and didn’t need to take any of her sick time her first year. Since your brother’s company uses the accrual method for sick time her hours will roll over and the beginning of her second year she will have 6 hours of sick time accrued. If she has another healthy year she will start with 9 hours the following year and so on. You can see this could really add up. There are obviously pros and cons to both methods so you will need to determine which one make the most sense for your business.
How can I become informed and stay on top of legal issues that might affect my business?
One of the business owners at the meeting I attended asked how it was possible for small business owners to know about things like this. Basically the reply was that in the eyes of the court ignorance is no excuse. I see that in this case ignorance wouldn’t be bliss either.
If you would like to keep up with legal issues like this I suggest that you sign up for a free subscription on Kronick Moskovitz Tiedemann & Girard’s website www.kmtg.com. There are many different subscriptions you can be added to so be sure to select “Labor and Employment.”
I hope you found my first blog helpful!
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