I got a chuckle out of seeing Vermont’s definition of a “large” employer for purposes of their new sick leave law – a company with six or more employees. I suppose in Vermont chihuahuas are large dogs, Smart cars are large automobiles, and a family with an only child becomes a large family. Vermont is not alone as another wave of new state and local regulations are moving across the country. Each new law has differing definitions — and you must comply with federal, state, and local regulations if you want to remain in business.
Sometimes it may feel as if some states are trying to shut down small business with their never-ending regulations. Truly “large” employers may have more options that they can utilize to soften the bite out of those regulations, or they may simply have more money than a small employer. The point is, big corporations have only to wait until their small business competition folds up. Small businesses have fewer options: 1) they can move their business to another state; 2) the small business owner can make less profit; 3) the owner can pay less to his/her employees; 5) the business can charge more for its products or services; 4) or shut down and retire early. Not very attractive options when you otherwise love the area you are in, cannot afford to make any less profit, must pay employees enough to keep them from quitting, cannot afford to price your self out of the market, and you’re too damn young to start sitting on the porch.
Most of these new sick leave laws suggest you can “frontload” the paid sick time for your employees. In general, the idea is that employees accrue sick time and it becomes available to them after a waiting period – usually 90 days. But to avoid the “hassles” of managing the sick time accrual, some states recommend that you can just frontload the amount of time you expect them to accrue in a year. This is a grand idea if you don’t mind paying out sick time for employees who leave before the year is out. If your small company is one that deals with high turnover, this may be a horrible recommendation for your bottom line. It is also bad idea to frontload time that requires accrual for another reason – it opens the door to an even more onerous rules in the future. If states believe businesses choose to frontload, it will soon demand you frontload. If states feel it doesn’t bother you to pay out sick time that hasn’t been earned, don’t be surprised when the law suggests it doesn’t have to be earned. Oh, and don’t expect to get that unearned pay returned to you by the employee who left before their paid time off accrued. Do your due diligence and track usage and accrual.
We salute the small business owner that soldiers on despite all the pits and trapfalls in his or her path. We know, we are a small business too. Pipkins may be able to help you manage the rules and regulations concerning absence management to stay in compliance — sick leave, FMLA, PTO, ADA, and my personal favorite –paid time off for whatever reason. We will be happy to help and won’t cost you an arm and a leg.