Making Sense of Your Sick Policy…

By Lena Bodin, MBA, SPHR, SHRM-SCP (June, 2021)

Recently, a business acquaintance who is the President of a small company shared something. Just before the COVID-19 pandemic, one of his long-time employees went out sick for several weeks. Since the company never had a sick policy this employee received full pay for the duration of the absence including the NYS paid sick days. Needless to say, the company didn’t even realize that it could still have processed the illness under NYS Mandatory Disability which would have subsidized some of the cost to the company. My friend since then had an Employee Handbook established which clearly communicated their new “sick policy” along with many other important policies.

It is not unusual for smaller companies to allow the 5 mandated paid sick days without any formal policy in place for someone who needs more time off. But as we can see in the story above, situations can happen which ends up being costly for any size company.

Most companies have some established policy around vacations but may be informal for other types of paid leave. This can open up a can of worms, especially if a company arbitrarily determines who gets “other” paid time off. Therefore, a properly communicated paid time off policy which includes sick/disability, bereavement, and for larger companies, FMLA provisions becomes very important for proper management of your workforce, not to mention, keeping payroll costs under control.

In addition to the mandatory paid sick leave in New York and New Jersey, there are mandatory disability payment provisions that employers need to be aware of. State Disability payments of up to six months are usually payable after an employee has been out sick for at least 7 calendar days with substantiation by a physician. In addition, companies with 50 or more employees may be subject to the provision of FMLA which requires unpaid sick leave for qualified illnesses under this law.

Research shows that companies may allow anywhere from 3 to 8 sick days to their union and non-union employees. This covers incidental sick days for the first week before State Disability kicks in. Traditionally, companies had a “use it or lose it” policy for sick days in any given calendar year. However, under the New York State mandate, unused sick days must be carried over. In this case you can have a paid sick policy which works alongside your mandatory policies such as State Disability and FMLA.

Prior to the passage of the Family and Medical Leave Act and NYS and NJ Paid Sick Leave, sick policies were fairly straight forward to write and administer. But now, all polices that cover leave (vacation, sick time, FMLA, maternity leave, short-term and long-term disability, etc.) need to be developed together so that it is clear which time is used first, when absences are paid, etc.

Whichever way your company chooses to go with your sick policy, the most important step is to have an established policy which is clearly communicated to all employees. The logical thing is to have it included in your company Employee Handbook. Developing your sick policy needs to be coordinated with your other policies such as State Disability, Short Term Disability and, if applicable, FMLA. If you don’t have the expertise in-house, you should consider working with a consultant or consulting firm to help you develop your program.