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As of July 1, 2016, the federal government mandates that employers provide at least four days of sick time per year, requiring an accrual of one day for every 30 hours worked. This change necessitates adjustments in payroll and accounting to manage this new liability, which won't appear on the balance sheet. Additionally, if a company has a vacation policy, it must be structured as a paid time off (PTO) policy that exceeds the minimum sick leave requirement to comply. However, a challenge arises because PTO must be paid out upon an employee's departure, complicating financial tracking and management.
