Most small businesses can only afford to pay their employees when they are actually working, which means paid sick leave is generally reserved for larger companies and salaried employees only, depending on what state your business operates in. (Some states, like California, require companies of any size to provide a certain amount of paid sick leave to all employees, whether part time, full time, seasonal, exempt or non exempt. The law also allows employees to use their sick leave to care for a variety of family members.) If you don’t operate in a state that requires you to offer paid sick leave, and depending on what federal laws may apply to your business, you may be able to create a plan that even your small business can afford. Tweet This
The loss in productivity to the U.S. economy due to illness in the workplace has been estimated at $160 million annually, with the majority of this coming from people going to work sick. Providing employees access to paid sick days could help increase workplace productivity, decrease turnover and create a healthier workplace.
Many small businesses can’t afford to offer paid sick leave or paid time off in general (PTO), but a federally-run, paid leave insurance program could help smaller businesses to compete with corporations and offer the incentive, which could reduce turnover costs and help support the local economy. When the middle class thrives, small businesses can thrive too, and by helping their employees by offering paid vacation and sick days, the benefits come full circle.
Under the prior administration, paid leave was a priority for the Department of Labor, but under the current administration it’s uncertain if paid leave will still be a priority. While the world waits to see what the next few years will bring, here’s what you can do as a proactive business owner to help combat the PTO and sick leave issue.
Treat Paid Leave as a Reward
Instead of offering a certain amount of vacation time or PTO upfront, you can consider offering them as an incentive. You can base the number of PTO days off on whatever works best for you and your employees: number of years at the company, highest number of sales, best overall performance, etc. This way, you can both offer your employees PTO and encourage them to perform their best while they are at work.
Revamp Your Culture
Do your employees enjoy coming to work? By providing a culture that employees enjoy, you can encourage them to take less time off. Emergencies and illnesses will happen, but by making sure your company culture is a benefit in itself, you can help cut down on turnover costs and unnecessary time off.
Manage Your Cash Flow
If you find yourself in cash flow crunches more often than not, it may seem like you can’t afford to offer extra benefits like PTO, but by better managing your cash flow, you may find you have the funds after all. Take a look at your finances and forecast your flow to see if PTO really is something you could offer employees.
You should consult with a lawyer in your state before creating your PTO policy to make sure you are compliant with any federal, state or city laws. While federally you may not be required to offer PTO to any employees, each state will vary in its laws governing PTO. Some cities even have specific laws that add to its state laws and you’ll need to comply with both.
Get more proactive business owner tips:
- The Proactive Small Business Owner: Securing a Loan
- The Proactive Small Business Owner Series: Navigating Your Taxes and Regulations
- The Proactive Small Business Owner Series: The Affordable Care Act
- The Proactive Small Business Owner Series: Affordable Retirement
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