Paid Family Leave vs. Paid Sick Leave: What’s the Difference?

As a small business owner, you likely offer your employees a number of fringe benefits, including vacation or personal days, but you’ll also want to be aware of the different laws surrounding other types of time off, the rules of which are not up to you. 

As part of the latest coronavirus aid bills, there are now federal regulations around paid sick leave and family leave policies. However, prior to this, there were no federal laws requiring employers to offer paid leave for either of these instances. Some states, on the other hand, had their own rules and requirements.

In this guide, we’ll explain the new rules around paid sick leave and family leave as it relates to COVID-19, as well as the state regulations you’ll need to know to create your own company policies in the future. 

Read on to get the answers to all of your questions about paid sick and family leave laws.   

Federal Regulations Around Paid Family and Sick Leave

Previously, there was no federal law that required employers to provide paid family and medical leave, but there was a law around unpaid family leave. This federal law is known as the Family and Medical Leave Act (FMLA). There was no federal unpaid law equivalent for paid sick leave.

Now, however, there are federal laws requiring both paid family leave and paid sick leave for eligible employees. The Families First Coronavirus Response Act requires small businesses (those with fewer than 500 employees) to provide 80 hours of paid sick leave to full-time employees who need to self-isolate, care for a sick family member, or care for a child.

Additionally, employers must provide 10 weeks of paid family leave to employees who need to care for their children because their school or daycare facility has closed. For paid family leave, the employer is required to pay two-thirds of an employee’s wages, while they pay full wages for sick leave.

Under this legislation, small businesses can receive a tax credit to cover this cost. The CARES Act also mandates that SBA 7(a) loans and SBA Emergency Economic Injury Disaster loans can be used to cover these expenses.

State Regulations Around Paid Family and Sick Leave

While there are currently federal regulations dictating paid family and sick leave policies, this is not the norm. Due to the previous lack of federally mandated paid time off, both paid family leave and sick leave laws were left to the state. Since 2012, 11 states (and Washington, D.C.) have enacted paid sick leave laws. Since 2004, eight states (and Washington, D.C.) have enacted paid family and medical leave laws. 

To ensure that your business is compliant with your state, you’ll want to understand both laws and which employers they affect.

Paid Family Leave

Paid family leave, or family leave insurance, gives employees paid time off to deal with qualifying family-related situations. What employees can use the paid leave for varies by state. 

Most states lump family and medical leave, or family and medical leave insurance (FMLI), together under one law. This is why paid family leave (PFL) is often referred to as paid family and medical leave (PFML). However, some states (such as California) separate paid family and medical leave under different laws. 

Like unemployment insurance programs, paid family and medical leave benefits are distributed by the state. Paid family leave benefits are a percentage of the employee’s regular wages. The program is funded by employees, employers, or both. 

When it comes to paid family leave, there are a number of things you need to keep in mind. Ask yourself questions like:

  1. Does my state have paid family leave laws? 
  2. Does my state’s law apply to my business? 
  3. Which employees can take leave?
  4. What (and who) can employees use leave for? 
  5. Do I pay, or do my employees pay? How much? 
  6. When do I stop withholding or contributing to the fund? 
  7. What percentage of their regular wages should eligible employees expect to receive? 

Employees must pay into the program for a set period of time that the state determines before being eligible for leave. The state also determines the number of weeks the employee can take per year for paid leave. The state also sets a wage base, which determines when employers stop withholding or contributing to the fund. 

Generally, employees can use paid family leave to bond with a new child, care for a family member with a serious health condition, or deal with their own serious health condition. 

Some states also let employees use time in response to a family member being on active duty, to donate an organ or bone marrow, or to deal with violence- or assault-related issues. 

Paid Sick Leave

On the other hand, paid sick leave is time off an employee accrues and can use when they are sick. Unlike paid family leave, paid sick leave is paid for and distributed by the employer. It is not a state fund that employees and employers pay into. 

Paid sick leave laws simply require employers to pay employees their regular wages for time off when they are sick. 

Employees accrue paid sick leave hours based on a state-determined accrual rate. For example, an employee might accrue one hour of paid sick leave for every 30 hours worked. There’s also a state-mandated cap (except for in Washington state) on the number of hours an employee can accrue. 

When it comes to paid sick leave, ask yourself questions like:

  1. Does my state have paid sick leave laws?
  2. Does my state’s law apply to my business?
  3. Which employees can take sick leave?
  4. What can employees use leave for? 
  5. What is the accrual rate, and is there a cap?
  6. Can employees carry over unused time from year to year? 

Generally, employees can use paid sick leave if they are sick, seeking care or treatment due to an injury or illness, or seeking preventive care or treatment. 

Some states also let employees use paid sick leave if a family member is ill or injured. And, some state laws let employees take paid sick leave to take time following a violence- or assault-related incident, deal with a public health emergency, or attend a child’s school function. 

Although your state may not have a state-mandated paid sick leave law, your city might. Be sure you check to see whether there’s a city-mandated paid sick leave law that applies to you, as well. 

State-by-State Breakdown

With this background on the difference between paid family and sick leave in mind, you’re probably ready to learn what this all means for your business. 

Aside from the state of New York, all the states with paid family leave also have mandated paid sick leave laws. So, what are these states?

The following states have both paid sick leave and paid family leave laws:

  • California
  • Connecticut
  • Washington, D.C.
  • Massachusetts
  • New Jersey
  • Oregon*
  • Rhode Island
  • Washington

*Contributions for Oregon’s paid family leave program begin in 2022. 

The following state only has paid family leave laws:

  • New York 

The following states only have paid sick leave laws: 

  • Arizona
  • Maryland
  • Michigan
  • Vermont

Something else you should keep in mind is that Maine also has a paid leave law starting in 2021 where employees accrue paid time off based on their hours worked. However, Maine is the only state where employees can use the time off for any reason, not just when they’re sick

The following chart shows the states with paid family leave laws, paid sick leave laws, or both. Take a look at which states have which types of laws on the books:

State Paid Family Leave Laws Paid Sick Leave Laws
Arizona
X
California
X
X
Connecticut
X
X
Maine
X*
Maryland
X
Massachusetts
X
X
Michigan
X
New Jersey
X
X
New York
X
Oregon
X
X*
Rhode Island
X
X
Vermont
X
Washington
X
X
Washington, D.C.
X
X

 

Keep in mind that all employees must pay into the state paid family leave fund (except Washington, D.C.). 

Check out a brief overview of which employers the law(s) affect, how much paid sick leave employees can accrue, and who contributes to the paid family leave fund. 

Arizona

Arizona has a paid sick leave law that applies to employers of all sizes. 

Employers accrue paid sick leave at a rate of one hour per 30 hours worked. This means an employee would need to work 240 hours to get eight hours of sick leave (a typical workday). 

California

California has both paid sick leave and paid family leave laws. California’s paid sick leave law applies to employers of all sizes. California’s paid family leave law applies to all employers, too. 

When it comes to California’s paid sick leave law, employees accrue paid sick leave at a rate of one hour per 30 hours worked. And for the paid family leave law, employees pay into the fund—employers are just responsible for withholding and remitting it. 

Connecticut

Connecticut has both paid family and paid sick leave laws. The state’s sick leave law only applies to employers with 50 or more employees. Connecticut’s paid family leave program (beginning January 2021) affects all employers. 

Connecticut employees accrue paid sick leave at a rate of one hour per 40 hours worked. And, the state’s PFL program is employee-funded.  

Maryland

Maryland has a paid sick leave law. If you’re an employer in Maryland with 15 or more employees, you need to offer them paid sick leave. 

Employees get one hour of paid sick leave per 30 hours worked. 

Massachusetts

If you’re an employer in Massachusetts, you may be subject to both paid family and sick leave laws. 

If you have 11 or more employees, you have to offer paid sick leave. The accrual rate is one hour per 30 hours worked. And if you have fewer than 11 employees, you must offer unpaid sick leave. 

When it comes to paid family leave, you must contribute an employer portion if you have 25 or more employees. 

Michigan

Michigan has a paid sick leave law that employers with 50 or more employees must follow.

If you’re a Michigan employer with 50 or more employees, your employees get one hour for every 35 hours they work. 

New Jersey

New Jersey employers need to be mindful of the state’s paid sick leave and paid family leave laws. All employers need to give employees paid sick leave. Only employees pay into the PFL fund. 

Employees will receive one hour of paid sick leave for every 30 hours worked. 

New York

New York has a paid family leave law. If you’re a New York employer, you need to withhold the contribution rate from your employees’ wages. But, you don’t need to pay into the fund. 

Oregon

If you’re an Oregon employer, you have both paid sick and family leave laws to be mindful of. 

You must provide paid sick leave if you have at least 10 employees. 

Beginning in 2022, you’ll withhold from all employee wages for the fund and contribute an employer portion if you have 25 or more employees. 

Rhode Island

The state of Rhode Island has both paid sick and family leave laws. 

You’ll pay employees for sick time if you have 18 or more employees. If you have fewer than 18 employees, you will need to give your employees unpaid time off when they’re sick. Employees accrue one hour of sick time per 35 hours worked. 

Employers do not contribute to the paid family leave program, but you do have to withhold and remit the employee contribution.  

Vermont

Vermont only has a paid sick leave law, which says that all employers must offer paid sick leave. Employees get one hour of paid time off per 52 hours worked. 

Washington 

The state of Washington has both paid sick and family leave laws. All employers must provide paid sick leave. Employers with 50 or more employees must contribute an employer portion for the paid family leave fund. All employers must withhold the employee portion.

Employees accrue one hour of paid sick leave for every 40 hours worked. 

Washington, D.C.

Washington, D.C. has both paid sick leave and paid family leave laws. Both laws apply to all employers, and their paid family leave law is entirely employer-funded. 

The accrual rate for paid sick leave depends on employer size. If you have fewer than 25 employees, your employees will accrue one hour per 87 hours worked. If you have between 25 and 99 employees, your employees accrue one hour per 43 worked. And if you have 100 or more employees, your employees accrue one hour per 37 hours of work.  

The Bottom Line

To sum up, here’s a quick rundown of the three key differences between paid family and paid sick leave:

  • When an employee uses paid family leave, they receive a percentage of their regular wages; when an employee uses paid sick leave, they receive their full wages
  • Employees, employers, or both pay into a state fund for paid family leave; employers pay employees directly for paid sick leave
  • After working at a business for a certain number of days, an employee gets a lump amount of weeks off for PFL; employees earn paid sick leave as they work 

Most states’ labor or employment departments run their paid sick or family leave programs. If you have any other questions about paid sick or family leave, you can check with your state.

Rachel Blakely-Gray

Rachel Blakely-Gray is a content writer at Patriot Software, LLC. Patriot Software offers affordable accounting and payroll software for small business owners. At Patriot, Rachel enjoys providing actionable, growth-oriented content.
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