“We have been using PTO instead of separate vacation and sick leave policies. However, I heard we may want to reconsider because of California’s new sick leave law. How will that affect our PTO?”
My HR Survival Tip
As you may have heard, California has passed a sick leave law that requires ALL employees to earn 1 hour of paid sick leave for every 30 hours worked, up to a minimum of 6 paid days. You can design your policy so employees can only use as low as 3 sick days per year.
PTO (Paid Time Off) is a policy that combines all personal time off, such as vacation and sick leave, rather than having separate policies. If the amount of your PTO accrual is at least as much as the sick leave law requires, your PTO is sufficient to cover you under the this law.
However, before doing your happy dance, you might want to consider a few quirks of this new sick leave law. First, time off for sick leave is protected… which means you can’t count any of their sick time off toward attendance issues. When you’re using PTO, the entire amount of the PTO is protected leave because it includes sick leave.
Second, employees may use the time off in small increments. In theory, your employees could use their whole PTO balance in 2-hour increments. If you have a policy requiring whole days off for PTO, sick leave is merged with your PTO so you lose control over the use of it. They could use their whole PTO balance in 2-hour increments with no advance notice.
Have I worried you? Let’s take it a step further… Sam requests next Monday off as a PTO day. However, you know someone else already has that day off so you don’t approve the request. Monday morning comes and Sam calls in sick. You can’t do anything; you can’t hold it against him. That time off is protected.
I don’t want to completely discourage you from keeping your PTO. I’ve always been a big advocate of it because it’s great for recruiting and helps (I mean, used to help) control abuse of sick leave. If you have mostly exempt (salaried) employees with few attendance issues, continuing with PTO may still work very well for you.
My next post will cover the pitfalls of using separate vacation and sick leave. You’ll see the new law doesn’t leave us with an easy decision between PTO or separate vacation and sick leave policies.
Hi…we currently provide an accrual vacation policy and provide 5 sick days given at the beginning of the year. The sick days balances zero at the end of the year. Can we in 2015, reduce our sick days to the minimum 24 hours and stay compliant and continue with our accrued vacation policy?
Hi Dominique,
Yes, you can change your sick leave policy but you need to do it correctly. You can pop 24 hours in on January 1st but you need the balance to keep running the next year because the law says they can accrue 6 days. This means you’d add 24 hours 1/1/15 and then another 24 hours on 1/1/16 to their remaining balance from 2015. Also make sure your new policy states they can only use 24 hours per calendar year. See my next post for a little more information about how this affects your vacation policy.