How a Payroll System Can Handle Paid Sick Leave

  • paid sick leave

California’s new sick leave law went into effect January 1, 2015 but the rights of employees to accrue and take sick leave don’t go into effect until July 1, 2015. That means employers have only a few months to prepare to manage legally required sick leave accruals and payments in payroll if they aren’t already doing so voluntarily. An employer’s payroll software can handle paid sick leave to stay in compliance, avoid mistakes in accrual, and prevent delays from manual processes.

Stay in Compliance

Sick leave accrual and payment through a payroll system helps keep your company in compliance with requirements of the new law.  Accruing sick time according to the right calculation, paying accrued sick leave that has been taken, documenting details on the paystub, and required recordkeeping are all automated. Employee eligibility is setup in payroll and accruals build automatically as hours worked are entered and paid.

Recordkeeping

The recordkeeping required for the new sick leave means tallying an hour of paid sick leave for every 30 hours full time employees work, and tracking how much sick leave is taken. This information must be displayed on the employee’s pay stub.  Employers can limit the amount of paid sick leave employees take to 24 hours, or three days, even though a full time employee can potentially accrue eight days a year. The alternative to the accrual method is to assign 24 hours every year to each employee.

Regardless of the method chosen, a payroll system eliminates the need for manual sick time tally sheets and automatically assigns accruals to the employee record, creating and maintaining a digital record that is easy to use for reporting and referencing.  History of every transaction is archived automatically and retrieving reports is simple.

Run Reports When Needed

When paid sick leave is managed through payroll software, employers can run reports at their convenience when they need to review accruals, hours worked, and time taken.  This prevents chasing down paper records in physical file cabinets or trying to understand spreadsheet calculation errors.

In an administrative sense, it can be easy to comply with the new CA Paid Sick Leave law when payroll software is used to manage it.  Starting accrual based on eligibility, calculating the correct amount of accrued hours, managing use of sick time and reporting and recordkeeping are all automated through a payroll system.

If your company currently does not have a paid sick leave policy in place, PAYDAY has a sample policy available for purchase.

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About the Author:

As Director of Operations, Jessica oversees the day-to-day operations for payroll, human resources, tax, finance and client affairs. She also plays an active role in formulating corporate strategy and developing client programs. Jessica believes a company’s success begins with its people. She strives to build a team encompassing excellence and professionalism, and to play a large role in developing the staff on an ongoing basis. Her passion for strong client relationships drives her in ensuring that clients receive the highest level of personal service and the best products in the industry. Jessica joined PAYDAY in 2004, and quickly advanced to Development Coordinator in 2006, when she took charge of Human Resources. She was promoted to Director of Operations in September, 2011.

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