Sick Leave Policy Trends by Company Size and Industry

Sick Leave Policy Trends by Company Size and Industry

When considering implementing a new sick leave policy for small business, or reviewing your current policy, you’ll want to consider several questions:

• Is your sick leave policy in line with your company’s values and culture?
• How does your business’s sick leave policy compare to that of your competitors?
• Are your employees happy with your current sick leave policy, and if not, what type of policy might they, and future prospective employees, value?
• Is your sick leave policy—and overall benefits package—cost-effective and sustainable over the long term?

In today’s competitive talent market, it’s vital that businesses carefully consider every aspect of the total compensation package that they can offer to attract and retain suitable employees. Furthermore, it’s important for businesses to understand the complexity and nuance of local laws and policies. For instance, in New York City, there are city-specific policies which differ from other major metros. Paypro’s dedicated team is uniquely qualified to understand local laws and deliver expert considerations to their clients. Needless to say, a comprehensive and law-abiding paid sick leave policy is an increasingly important part of today’s employee benefits packages.

Sick Leave Policy Data

The Bureau of Labor Statistics, using data from the National Compensation Survey, indicates that the number of paid sick leave days varies by length of service and establishment size. 

• Private Industry: The policy data shows that private industry employees, on average, receive seven days of paid sick leave after one year of employment, eight days per year at five and ten years of employment, and nine days per year when they reach 20 years of service. 
• Small Business: The data also shows that smaller businesses (those with fewer than 100 employees) provide, on average, fewer sick days than larger companies.

The Trend Toward Paid Time Off (PTO), Rather Than “Sick Leave”

When an employee isn’t sick, but needs a day off for a personal reason, having to “call in sick” means the employee must compromise his or her integrity. The terms “sick leave” or “sick days” are falling out of favor, as they are rather narrow in scope.

According to the Society for Human Resource Management (SHRM), the number of employers switching to a “paid time off” (PTO) model is increasing. The PTO model does not differentiate between vacation time and sick days. SHRM, using data collected from consulting firm Mercer’s annual Survey on Absence and Disability Management, showed an increase in PTO to 63% of employers polled, up from only 38% five years earlier.

Some of the issues surrounding sick leave that have contributed to its diminishing popularity in favor of PTO include:

• Less strictly defined PTO policies help foster a positive working environment, in contrast to sick leave, which is perceived by some to be archaic. PTO can be seen as a competitive advantage as part of a total compensation package as businesses recruit for top talent in today’s market.
• Employees may feel guilty about being dishonest when using sick days for other legitimate personal reasons that don’t involve sickness. This is not conducive to building a culture of honesty and integrity. Employer-employee relationships that are built on mutual respect and trust lead to higher team engagement and productivity. PTO can help to build trust by eliminating an area ripe for falsehood.
• Employees may feel uncomfortable talking about certain types of illnesses, especially by email or telephone. PTO affords employees a greater degree of privacy.
• When employees feel that they need a day off due to mental exhaustion or after a sleepless night, they may worry that taking a sick day will be perceived as a sign of weakness. Feelings of guilt can interfere with the ability to relax and unwind, which is why the employee needed to take the time off in the first place.

Ever-Evolving Sick Leave Laws

Despite the trend away from sick leave, we may see the trend towards PTO slowing or even coming to a halt due to changing state and local laws that require employers to provide specific amounts of paid sick leave. The laws vary considerably by region throughout the U.S., and this is causing difficulty for many employers, making the administration of PTO programs and sick leave policy for small business more complicated.

There are differences in the laws pertaining to paid sick leave from state to state, regarding which employees are covered, permitted uses, accrual rates, and waiting periods. To complicate the issue further, some local jurisdictions’ laws differ from state laws, making it more challenging to develop a sick leave policy for small business.

Employee Leave Management

Whatever type of sick leave policy you have in place at your company—or if you do not yet have a set sick leave policy for small business—Paypro can help. Our leave management solutions can be fully customized to suit your business’s unique needs. We offer simplified employee time tracking, along with a range of other workforce management services to help you manage your business more efficiently. Contact us today to set up a consultation.

About The Author

Kayla is the Marketing Manager at Paypro Corporation overseeing all inbound and outbound marketing and sales efforts. She has 7+ years of experience working within the B2B and SaaS based solutions space and thrives on creating messaging and campaigns that introduce products and services to those who need them most.