Mandatory Paid Sick Leave Requirements Complicate Life for Employers

April 12, 2016
Employers should implement recordkeeping requirements now to be ready for the new 2017 sick leave rules.  

The fad for minimum wage hikes in cities and states across the United States created a wave of mandates requiring employers provide paid sick leave for their employees. As of January 1, 2017, federal contractors and subcontractors will face the same requirement nationwide.

Paid sick leave laws add complexity, costs and new liability for any employer. Because advocates enjoyed their initial and most widespread success at the municipal and local level, employers with operations in different cities are stuck with widely varying laws and formulas to figure out how many hours worked equal an hour of sick leave. Employers in California must obey differing laws adopted by cities throughout the state along with a state law.

How complicated can this be? Recently a law firm sent clients a bulletin summarizing paid sick leave laws in Seattle, SeaTac, Tacoma and Spokane, Washington, which ran to more than 4,000 words. The states of California, Connecticut, Massachusetts, Oregon and Vermont already have sick leave laws in force.

The Labor Department recently proposed regulations to implement President Obama’s 2015 order that federal contractors and subcontractors provide employees with paid sick leave, starting in January 2017. Although expected, the rulemaking contains some real surprises.

Covered employees can accrue up to 56 hours (seven days) of paid sick leave each year, and carry over accrued, unused sick leave from year to year, until they hit a 56‑hour annual accrual cap. This applies to DOL's definition of covered contracts—where work is performed on or "in connection with" contract requirements. Subcontractors’ employees get one hour of paid sick leave for every 30 hours they work on federal contracts.

The "in connection with" definition is where things get tricky. DOL says this connection exists when an employee’'s work can be deemed necessary to the performance of a contract, but isn’t directly engaged in performing the services called for by the contract. (Also, the new rules say "hours worked" will include paid time-off—such as paid vacations and even paid sick leave!)

As a result, an employer with one or more federal contracts won’t need to include all its employees in the formula, or even include all the hours worked by employees who do some work on these contracts. The bad news is that this means the employer will need to maintain payroll records and adopt methods for separating non-covered work from covered work.

Employees can use paid sick leave to deal with their own mental or physical illness or to care for a child, parent, spouse, domestic partner, or anyone else "related by blood or affinity" in the equivalent of a family relationship. Reasons for paid leave can include dealing with domestic violence, sexual assault or stalking, and time needed to obtain healthcare or counseling, relocation and assistance from a victim services organization, and to help with related legal action for themselves or a relative.

Don't wait—employers should implement recordkeeping requirements now, urge attorneys for the law firm of Bass, Berry & Sims. If you already offer paid sick leave it may turn out to be adequate to meet the new standards, but keep in mind that existing policies must comply with the new accrual, carryover, usage and other requirements.

"A failure to ensure compliance could be met with harsh consequences, particularly for any employer who is deliberately ignorant," the attorneys warn. A good idea would be to obtain expert help in altering and managing payroll systems. It also is smart to get legal advice about how to handle an employee leave request without risking a lawsuit under the new rules.  

David Sparkman is founding editor of ACWI Advance (, the newsletter of the American Chain of Warehouses Inc., as well as a member of the MH&L Editorial Advisory Board.

About the Author

David Sparkman | founding editor

David Sparkman is founding editor of ACWI Advance (, the newsletter of the American Chain of Warehouses Inc. He also heads David Sparkman Consulting, a Washington D.C. area public relations and communications firm. Prior to these he was director of industry relations for the International Warehouse Logistics Association.  Sparkman has also been a freelance writer, specializing in logistics and freight transportation. He has served as vice president of communications for the American Moving and Storage Association, director of communications for the National Private Truck Council, and for two decades with American Trucking Associations on its weekly newspaper, Transport Topics.

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