This election year, the issue of paid sick leave is one of growing concern for employers, labor organizations, and legislators across the country. Since the beginning of the year, 12 states and the District of Columbia have seen the introduction of new legislation requiring employers to offer their employees paid sick leave in various forms. San Francisco and Washington, D.C. recently enacted legislature requiring employers to allow their staff to begin accumulating paid sick time based on hours worked. In May, New Jersey approved legislation requiring companies to offer six weeks of paid leave to workers wishing to care for a new child or sick relative. And in Ohio, advocacy groups are working to place a paid sick leave mandate on the November ballot requiring the accrual of paid sick time immediately upon beginning employment.

The Push for Paid Leave

The growing movement to make paid sick leave a basic labor standard in the United States stems from the fact that nearly half of all American workers are currently ineligible to receive pay for time missed due to illness (source: Bureau of Labor Statistics). Workers argue that when they become ill, they are forced to choose between going to work sick or missing wages - or, in some cases, risking a reprimand or dismissal.

Challenges for Employers

Employers, on the other hand, claim that covering the cost of mandatory paid sick time may force them to cut jobs, reduce employee wages and benefits, or even to go out of business altogether.

Meanwhile, in states where mandatory sick time legislation has already been enacted, keeping track of the varying laws from state to state presents nationwide employers with another challenge altogether. In New Jersey, for example, employees are required to partially fund their own paid leave through a payroll deduction, and must use accrued vacation time before accessing their allotted paid sick leave. In San Francisco, accrual of paid leave is tied to hours actually worked, while in Maine employers who voluntarily offer paid sick leave must follow state regulations regarding the flexibility of its use.

Employers operating in multiple states with varying laws regarding paid leave are charged with the time-consuming task of ensuring each employee is paid in compliance with his or her state's laws. Those who fail to comply leave themselves subject to potential litigation and heavy penalties.

How Outsourcing May Help

For companies who lack the time and capacity necessary to keep up with varying sick leave laws across state lines, outsourcing employment through a nationwide employer of record may provide some much-needed relief. As the legal employer of record, these organizations assume responsibility for paying employees in compliance with their individual state's laws. Employers operating out of one state but wishing to open additional offices in another can put their out-of-state staff on the employer of record's payroll and no longer have to deal with compliance issues regarding that state's labor laws: those responsibilities shift to the outsourcing company. Utilizing the expertise and nationwide capability of these types of organizations can help save businesses time and hassle, while dramatically reducing their risk of noncompliance.