Small Business Sick Leave Guide

With the coronavirus still heavily impacting America, business owners are faced with essential workers needing time off. Additionally, the flu season slated to arrive in December, can also greatly affect your team.

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Before required legislation was put in place, paid sick days were not a given for most employees. Zenefits reports that a recent study found 29% of America’s private sector workforce (34 million-plus) do not have access to paid sick time. These workers have the difficult choice to work while sick or lose wages. For many who work in an office with others, that can mean spreading illnesses or getting sicker.

The good news is that some small businesses are re-considering or re-evaluating their existing paid sick days policies in light of the pandemic. In addition to supporting your workers, a solid sick leave policy can be helpful to increase productivity and recruit new employees.

What is an average sick time?

On average, workers in private industry received 7 days of sick leave per year at 1 year of service. The average also was 7 days at 5 and 10 years of service and 8 sick days per year at 20 years of service. You may not have long-time employees with years of working steadily for your company. Those workers, especially during this pandemic, should also have sick time outlined in a detailed yet easy-to-understand sick leave policy. (See new requirements in light of the pandemic below)

Is sick leave legally required?

Currently, there are no federal legal requirements for paid sick leave. For businesses subject to the Family and Medical Leave Act (FMLA), the Act does require unpaid sick leave. FMLA provides for up to 12 weeks of unpaid leave for certain medical situations for either the employee or a member of the employee's immediate family. In many instances paid leave may be substituted for unpaid FMLA leave. Employees are eligible to take FMLA leave if they have worked for their employer for at least 12 months, and have worked for at least 1,250 hours over the previous 12 months, and work at a location where at least 50 employees are employed by the employer within 75 miles.

Although there are no federal requirements, thirteen states and Washington D.C. have enacted laws to require paid sick leave. (You can find the list from the National Conference of State Legislators.)

Legal sick leave requirements in light of 2020 pandemic

The Families First Coronavirus Response Act changes employers’ responsibilities. Now, small businesses (those with fewer than 500 employees) must provide full-time employees with 80 hours of paid sick leave for corona-related purposes, including to self-isolate or care for a family member or child. Employees are to receive their full wages during this time. The Department of Labor’s Wage and Hour Division enforces the new law’s paid leave requirements that are effective through December 31, 2020.

Generally, the Act provides that employees of covered employers are eligible for:

  • Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined (pursuant to Federal, State, or local government order or advice of a health care provider), and/or experiencing COVID-19 symptoms and seeking a medical diagnosis; or
  • Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine (pursuant to Federal, State, or local government order or advice of a health care provider), or to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor; and
  • Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee, who has been employed for at least 30 calendar days, is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.

Additionally, employers are also required to provide 10 weeks of paid family leave for employees who can’t work because they’re caring for children. Employers are required to provide two-thirds of an employee’s pay if that is the case.

Because this is difficult for many struggling small businesses, employers will receive a tax credit to help offset costs. Numerous business owners received PPP loans during the pandemic to assist them and their employees during this time.


What is included in a sick leave policy?

Sick leave can take many forms — from half-days off to weeks (or even months) to address a serious health condition. Business owners should put guidelines for sick leave in writing and provide that information to all employees.

A strong sick leave policy will outline:

  • Time available to employees and how it is calculated
  • If time off for illness is paid, unpaid, or a combination of both
  • Whether staff members need to provide documentation or approval from the business leaders to take off time to recover

For a sample template of a sick leave policy, review this PDF document from SHRM, the Society for Human Resource Management.

Why detailed recordkeeping is important

To stay competitive and account for unforeseen circumstances, like a widespread flu outbreak or coronavirus pandemic, businesses have to offer benefits. But when an employer creates a sick days policy, it also creates recordkeeping issues.

Before establishing a new policy, employers should create a single bank of “paid time off” (PTO) to be accrued for vacation, sick days and other absences, or to separate each one out by type.

A single PTO bank equals less time policing employees’ reasons for being absent, and offers flexibility. Many, many employees use up earned PTO. But when sick days are separated from vacation time, most workers try not to use up those days, preferring to save them for a future need. Your policy should also cover workers who knowingly come to work ill.

Rewarding employees for being healthy

A relatively new strategy for business owners is to set up an employee health program. Instead of demanding that your workers practice healthy habits, you can offer financial incentives and other perks. For example, WebMD recently provided all employees with pedometers to track their steps along with information to support taking at least 10,000 steps a day. The step count populated into a spreadsheet and employees received gift cards for top performance. Although you may not have the funds for this type of program, business owners should look for affordable ways to offer employees the opportunity to get healthy at work. Ideas include:

  • Offer employees 30 minutes of their workday to go to the gym.
  • Let employees take two 15-minute walk breaks during the workday.
  • Provide healthy snacks such as fresh fruits and vegetables, nuts and whole grains.
  • Host an employee wellness day once a month that involves fun activities and healthy foods.
  • Start a company sports team.
  • Turn regular conference room meetings into walking meetings.
  • Encourage employees to park further away from the building.
  • Make signs to encourage employees to take the stairs instead of elevators.
  • Lead a 10-minute deckercise session once a day.
  • Start meetings off with a 5-minute guided meditation or breathing session.
  • Bring in a yoga instructor once a week for 30 minutes.
  • Create wellness challenges that involve co-workers working together in teams.
  • Allow employees to take time off to compete in marathons, volunteer in the community or participate in any other wellness related activities.

Review Small Business Health Program and the COVID-19 Outbreak from the SmartBiz Small Business Blog for special considerations during the coronavirus pandemic.

Work/life balance for yourself and your employees is important in addition to healthy habits. Our blog post, 5 Simple Ways to Make Your Small Business Employees Happy, goes into more detail.