Sick leave
Sick leave is paid or unpaid time away from work for an employee’s own illness, injury, medical appointment, or care of a family member.
Outside covered federal contracts (Executive Order 13706), federal law does not require private employers to offer paid sick days. The obligation comes from state and local laws plus your own policy. Roughly a third of states and dozens of cities and counties now run paid sick leave programs. They commonly give an employee one hour of leave for every 30 or 40 hours worked. With employees in several locations, you generally apply the most generous rule reaching each one.
How does sick pay run through payroll?
Accrual, usage, and the payroll earning are three separate movements. An approved absence reduces a balance. It creates a paid earning only when the policy says the leave is paid and the balance covers it. An approved request against an insufficient balance should surface as an exception before payroll is approved, not quietly create pay.
| CASE | PAYROLL TREATMENT |
|---|---|
| Own sick leave policy | Its own earning type, separate from PTO and holiday pay |
| Combined PTO bank | Sick days paid as PTO; the bank still has to meet each state or local sick leave rule |
| Employer-paid sick wages | Taxable wages subject to withholding and employment taxes, on a pay statement line separate from regular hours |
| Third-party sick pay | A separate path, with its own year-end reporting and sometimes its own state registration |
- U.S. Department of Labor, Sick Leave
- U.S. Department of Labor, Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors
General information, not legal or tax advice. Apply current federal and state rules with qualified guidance.