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As of July 1, 2016, federal law requires employers to provide employees with at least four days of sick time off per year, accruing at a rate of one day for every 30 hours worked. This necessitates changes in payroll and accounting practices to accommodate this new liability, which does not appear on the balance sheet. Employers must also track sick leave separately, complicating accounting processes. Additionally, if a company has a Paid Time Off (PTO) policy, it must exceed the minimum sick leave requirement of four days to be compliant. However, PTO must be paid out when an employee leaves the company, presenting further challenges for employers.
