We continue with our series of posts (see prior posts here, here, here, and here) on the new Paid Sick Leave Guidance issued by the Connecticut Department of Labor earlier this month. Today’s post focuses on the “carryover” rules.
Another issue that the Paid Sick Leave addresses is the “carryover” rules — or how much accrued paid sick days an employee can carryover each year.
In the past, some businesses that have offered paid sick days have allowed employees to carryover those paid sick days from year to year — sometimes in an unlimited fashion. In time, this became an employer’s de-facto short-term disability plan. But as insurance offerings have become more sophisticated, employers also began to realize that this could also lead to potential abuse (and a big payout at the end.). Thus, employers began to limit the amount of time that may be carried over.
The new paid sick leave law recognized the potential for abuse too by only allowing service workers to carryover up to 40 hours (5 days) worth of time each year. The CTDOL guidance explains this rule a little further and whether employers can pay employees for their unused paid leave.
Service workers shall be entitled to carryover up to 40 hours of any unused accrued paid sick leave at the end of each calendar year. Service workers are limited to carry over 40 hours each year, regardless of how many hours they have accumulated. Some employers either require or provide their employees with the option of being paid out at the end of the year for any unused paid leave. Because the law provides that service workers “shall be entitled” to carry over any unused paid sick leave, employers cannot require service workers to take the pay out. However, employers may offer the option of pay out in lieu of carry over to service workers as long it is voluntary.
Because the act doesn’t go into effect until January 1, 2012, these carryover provisions won’t apply until the calendar year 2013 starts.
For employers who provide paid time off in lieu of paid sick leave, the guidance still does not specify that the carryover provisions that the employer uses must be the same as the law, but a reading of the law suggests that is the case. Thus, employers should review their PTO policies to determine if they are compliance with these carryover sections.