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If we frontloaded 64 hours to an employee who does not use any hours for sick leave, do we have to carryover that 64 hours and frontload another 64 hours at the start of the next year?

Whichever way employees accrue sick leave—whether through frontloading or continuous accrual—at least 64 hours of unused leave must be carried over each year. Yes, that could result in an employee having a balance of 128 hours, even if the employer’s policy limits annual use to 64 hours. If an employee used some of their paid sick leave during the year so they have fewer than 64 hours remaining in their balance, then the employer would have to carry over all unused hours.

Can an employer elect to pay out unused sick leave balances at the end of each year instead of carrying over the hours?

An employer may not require employees with unused leave balances to cash them out but may allow it if it is permissible under their leave policy and the employee elects to do so. Employees with unused accrued leave at the end of the year should have that leave carried over to the next year but cashing out a paid sick leave balance instead is permissible at the employee’s option.

Can you be more specific about who is and is not considered an employee under the Act?

Here are some examples:

  • Individuals performing services in peoples’ home for compensation are covered by the Act unless they are sole proprietors.
  • Independent contractors and subcontractors are not employees under the Act. But employers should be cautious to not misclassify these workers as contractors to avoid having to comply with the Act; the Act includes penalties for doing so. 
  • Corporate officers and company owners might be considered employees under the Act if they perform services for renumeration as set forth in their governing documents such as by-laws, operating agreements, corporate resolutions, etc.
  • Sole proprietors are not considered employees but any other individual performing services for the sole proprietor for remuneration would be. For example, a sole proprietor attorney would not be an employee, but the attorney’s paid legal assistant would be.
  • Employees of charitable, religious, or non-profit organizations are covered by the Act, as distinguished from people volunteering with such organizations.

Can a business use different accrual structures for different categories of employees?

(Example 1: frontload for salaried employees and use accrual of 1 hour per 30 hours worked for hourly or part-time employees. Example 2: frontload for current employees on January 1st each year and use accrual of 1 hour per 30 hours worked for new employees hired during that year.)

Yes, but the business should ensure they are clear about which employees fall within each category, and keep records of hours worked, leave accrued, and leave used for employees in all categories. All employees must also accrue PSL at a rate of at least 1 hour for every 30 hours work regardless of which category they are in.

If an employer frontloads 64 hours, do they still have to track employee hours worked for purposes of accrual?

Yes. Even though employers are not required to permit employees to use more than 64 hours of leave in a year, it is illegal to cap the number of hours an employee can accrue. 64 hours of paid sick leave equates to 1,920 hours worked, so once an employee works more than this in a one-year period, that employee must accrue an additional 1 hour of paid sick leave per every 30 hours worked.

If our company already has a PTO policy that has a more generous accrual rate, are we compliant with the Act?

Not necessarily. Not only must you provide at least the same accrual rate as the Act, but you must also ensure the hours accrued can be used at a minimum for the same purposes and under the same terms and conditions as provided for by the Act. You must track leave usage and be able to provide documentation to establish compliance if an employee files a complaint against you. Also, the Division will require employers to honor their own policies and we will enforce those more generous provisions. Employers in violation could face assessments of improperly denied leave pay, statutory damages, and interest.

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