Sick leave pay or paid sick leave is paid time off entitled to employees when they are absent from work for short- or long-term due to illness, injury, or disability. Employees on paid sick leave receive all or a portion of their salary while ill.
Employees can use paid sick leave for their health or care for their immediate family members, depending on company policies and state laws.
Although state laws or company policies vary, the following situations may qualify for sick pay:
Illness, injury, or health condition
Preventative medical care
Care or treatment of physical or mental illness
Care for a family member who is ill or injured
1. How Much is Sick Pay?
Sick pay typically equals an employee’s regular salary. But some organizations can pay only a portion of the regular salary according to their policy.
2. Is Sick Pay Taxable?
Sick pay is taxable, just like normal salaries and other types of paid time off wages you give your workers.
Unpaid vs Paid Sick Leave
The main difference between paid and unpaid sick leave is that in paid sick leave, employees get compensated during their leave, whereas in unpaid sick leave, they don’t.
Paid sick leave allows employees to take leave from work and care for their or their family members’ health while receiving regular income. Many firms give their employees an authorized length of paid leave, including paid sick leave, so that employees can remain financially secure during their time away from work commitments.
On the other hand, unpaid sick leave doesn't allow employees to receive a regular salary when absent from work due to being injured, sick, or caring for their family members. However, some companies may offer other work benefits, such as health insurance coverage during an employee's unpaid sick leave.
FMLA Regulation on Sick Leave Pay
According to the Family and Medical Leave Act (FMLA), on unpaid sick leave, employers whom FMLA covers only need to pay their employees on sick leave if an employee uses their vacation pay hours for all or some of their FMLA leave period.
FMLA-eligible employees can take up to 12 weeks of unpaid leave if they or their immediate family member need medical attention.
Companies are not required by federal law to offer paid sick leave. The practice of paid sick leave is more prevalent in the public sector than in private companies.
However, many states do have paid sick leave laws, such as Arizona, Connecticut, California, Colorado, Hawaii, Massachusetts, Maryland, Michigan, Nevada, New Jersey, New York, Oregon, Rhode Island, and Washington, D.C,
Though employers do not need to offer this employee benefit if they do business in a state that doesn't have sick leave laws, they can still opt to offer sick or paid sick leave. It will be helpful for employers in the long run.
Advantages of Offering Employees Sick Leave
Though it's not mandatory to offer employees paid sick leave, there are many advantages for employers to offer this benefit to their employees, such as voluntarily
Staying competitive with other businesses
Preventing the spread of sickness in the workplace
Improving employee retention
How Does Sick Leave Accrue?
Employees typically earn one hour of paid sick leave for every 30 or 40 hours worked. This policy mostly depends on the state where the company is running and the size of the workforce at a company.
What About Leftover Sick Leave Hours?
If employees have leftover sick leave hours by the end of the year, then depending on the company policy, employees might:
Cashout earned, unused sick time
Forfeit earned, unused sick time
Carryover earned, unused sick time
Employers can set limits if employees want to carry over or cash out unused sick time. For example, employers might allow employees to carry over up to 24 hours per year. California's Paid Sick Leave Law limits carried-over leave at 48 hours or six days.
Some states have PTO payout laws prohibiting employers from establishing use-it-or-lose-it practices for accrued time off.