It’s Sick, Not Vacation Time

“I don’t offer paid vacations so I just let my employees use their sick time however they want.”

Your HR Survival Tip

Allowing your employees to use their paid sick time for anything other than what the law states is putting you at risk legally. California has required paid sick leave for several years and we have approximately 30 localities with laws that are typically more generous and often pickier than California’s law.

The sick leave laws provide a fairly extensive list of reasons why employees may use their available sick leave. However, they are not allowed to use it for other reasons, such as personal time off. The danger you have in allowing all reasons for sick leave is that the available time will be viewed differently legally.

Currently, unused sick leave is not paid out upon separation from the company. Once you allow employees to use the sick leave for other personal reasons, you are automatically converting your sick leave to vacation time. A court decision has stated if you allow sick time to be used like vacation time, it -IS- vacation time and balances must either be used as paid time off or paid out when the employee leaves your company. There is no use it or lose it with vacation time.

Vacation is a true benefit you can choose to offer or not. Once an employee earns vacation time, it must be used or paid out because the state considers earned vacation time the same as cash. If you offer vacation time, the maximum unused balance an employee may have must be at least 150% of their annual amount. So, an employee earning 80 hours per year must be allowed to have an unused balance of at least 120 hours and, if you have no policy limiting the max balance, the time will continue accruing and could become very costly.

None of the sick time laws dictate the paid time off must be called sick time. But the legal details can trip you up because if you call your sick time anything else, you must ensure the policy still meets all the rules of sick time. Review your time off policies and ensure they meet relevant laws.

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