Q&A: Front-loaded PTO policies create problems with Washington paid sick leave
The Question: We are trying to prepare for the implementation of the Washington paid sick leave going into effect on January 1, 2018. We have locations in Bellevue and Olympia, Washington, as well as in Eugene, Oregon. We front-load our paid time off (PTO) at the beginning of the calendar year and don’t carry over any remaining PTO at the end of the calendar year. We know we are in compliance with Oregon’s paid sick leave. Will our policy also comply with Washington’s new paid sick leave law?
The Answer: No, you will need to make changes to your carryover policy to comply with the law, and you may want to reconsider your front-loading approach. The Washington paid sick leave (WPSL) law allows the use of an existing paid time off (PTO) plan, provided it meets the minimum requirements including allowing carryover into the following year of up to 40 hours of any accrued and unused sick leave. Also, there is no cap on accrual of WPSL, so any front-loaded PTO must meet the minimum amount of leave the employee would accrue. Under the law, leave accrues at a rate of 1 hour of paid sick leave for every 40 hours worked, with no cap on the accrual. An employee would not accrue leave during vacations, use of paid or unpaid leaves, or during holidays, because the employee doesn’t work during these times. The lack of a cap on accrual of the leave also means that in situations where your employees work varying hours of overtime, you may be unable to determine the actual number of hours of leave an employee will accrue during the year at the time of front-loading. Even when front-loading the leave, you will still need to determine how many hours of WPSL each employee accrued in each pay period, how much WPSL was used in each pay period, and how much total WPSL the employee has to use. You will also need to ensure you have front-loaded the correct amount of WPSL and immediately correct any deficiencies. The WPSL law is very different from other states’ paid sick leave laws and the local ordinances requiring paid sick leave. Coordinating the various states’ leave laws and local ordinances is very complex and will take much planning. So although the law allows employers to use PTO policies and front-load the leave, it might not be the easiest method of providing the leave to your employees.