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Labor Law: Setting rules for paid-time off

8341715093_7ba86300c3Employers frequently ask whether the law requires that they provide paid sick leave or vacation to their employees and, if so, how much must they provide. The issue of paid sick leave is in the news since California just became the second state to mandate paid sick leave, second only to Connecticut.

There is no federal law that requires employers to offer paid sick leave. While employees might be entitled to time off as a reasonable accommodation under the Americans with Disabilities Act, or under the Family Medical Leave Act, the law does not require that the time off be paid. So, while federal law mandates time off under certain circumstances, all the mandates require only unpaid time off.

In addition, there is no state law in Virginia that requires employers to offer paid sick leave for employees. Neither federal law, nor Virginia law, require that employees offer paid vacation.

Most employers do offer some form of paid sick leave or vacation. In these situations, multiple legal issues arise around use of these benefits. Here are some tips to make sure that your organization properly administers its paid time off.

Offer paid time off in lieu of “Vacation” and “Sick Leave” policies

Traditionally, employees received a separate bucket of vacation, and a separate bucket of sick leave to use as needed. Unfortunately, employees generally viewed the “sick leave” as an entitlement, and this led to more abuse. Employers are trending to provide only paid time off (“PTO”). However, I suggest if your organization implements PTO, that it also provide some form of short-term disability benefit.

Under this program, the employee will have a multiple-day waiting period before the paid benefit kicks in, and this prevents fraud because the employee must use available PTO during the waiting period. In addition, employees who use short-term disability benefits generally can’t take the time intermittently. Employers can then protect employees who need to take a multiple week medical leave of absence for things like pregnancy or an illness. However, the likelihood of fraud is diminished.

Require that paid leave run concurrently with unpaid protected leave

Employers can require that employees use any paid time off available when taking protected leave (i.e.: FMLA). Under this requirement, the paid time off runs concurrently with time off under FMLA. For employers, a policy such as this prevents an employee from taking a twelve week leave under FMLA and then a week later using her two weeks of PTO. The short-term disability benefit would also run concurrently with leave taken pursuant to FMLA.

Make your attendance policy work for you

Employers who provide paid time off can put requirements on how the time off is taken. For example, attendance policies should outline specifically that paid time off must be approved, in advance. The policy should make clear that unexpected or sporadic time off his highly disruptive, and unless the time off is protected by law, the employee cannot take excessive unexpected time off.

It is suggested if an employee has more than three instances in six months it is excessive and the employee should be coached, or disciplined if it continues. The policy should note, where true, that regular reliable attendance is an essential function of most jobs (or all jobs presumably), and therefore, it is necessary for employees to be on time at work each day as scheduled. Managers need to consistently enforce the policy as well. Employees need to know that just because they have paid time off available doesn’t mean they can just come and go as they please until the time is depleted.

Providing paid time is a benefit that most employees expect, and frankly, deserve. Employers who want to retain top talent need to have a robust paid time off program. However, implementing some ground rules around the time off will prevent abuse and still add value to your organization.

Photo Credit: Jeff S. PhotoArt via Compfight cc

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