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The Employer’s Guide to Sick Leave

Key Takeaways

1. It is inevitable at one time or another that an employee will fall ill at some stage during their employment period. If they are a long term employee, this could be a few times over the course of their work life. Many countries have laws that require employers to provide paid sick leave entitlements to their employees.

2. Having stringent or no paid sick leave entitlements to employees can actually cost companies more in the long run. It can also cause employees to burnout, especially if they believe they cannot afford to take days off in fear of being dismissed.

3. To help support their employees, some companies offer extra sick leave entitlements on top of any statutory requirements. In the USA specifically, paid sick leave is a non-mandatory federal requirement for private companies to offer, so it is common as an added benefit as part of employment contracts.

4. A Global PEO can support your company to ensure you are meeting all sick leave entitlement requirements when hiring workers in other countries.

Everyone gets sick from time to time. That is why many countries have mandated laws and regulations for sick pay entitlements for employees that employers are obligated to provide in their employment contracts. However, timeframes, pay and eligibility requirements differ vastly between countries, making it sometimes difficult for international companies to navigate when hiring workers in other countries. This is an employer’s guide to sick leave.   

What is Sick Leave?

The definition of sick leave varies from country to country. However, each variation usually follows the premise of permitted and paid time off from work to cater to personal health needs, generally illness. As all illnesses vary in length, there is usually differences in timeframes and pay depending on the illness that needs time off to recover from.

As a form of (usually) paid leave, sick leave is in the same category as annual vacation leave and compensatory leave

Often paid sick leave constitutes an additional cost to the employer and is treated as part of the total payroll burden. However, in other cases, government schemes step in to provide payments to workers. 

Short Term Sick Leave

Most employees that fall ill will usually only require a few days off to recover, otherwise known as short term sick leave. What is considered short term leave will differ between countries but generally will cover anywhere from 1 day to 30 days off. This can be time off consecutively or spread out throughout the year covering multiple instances of illness. 

  • Some short-term illnesses can include:

  • Common cold or Flu
    Mild gastronomical issues
    Headaches and migraines
    Non-serious injuries
    Stress and anxiety

There is research that stipulates an importance for employers to provide favorable short term sick leave entitlements and coverage to offset the chances of future long term illnesses. Offering short term sick pay entitlements can stop employees coming in unwell, which can result in other employees getting ill, while affecting the overall productivity of the sick employee. Too much leniency can run the risk of employees taking advantage and using entitled sick leave days when not suffering from actual illnesses that would entitle this leave. It is important for employers to manage this trade-off effectively, so that it does not affect their business negatively.

Another condition that has attracted a lot of attention in recent years is employee burnout. Employee burnout is an occupational phenomenon of a build-up of job related stress that results in physical or emotional exhaustion. It is often accompanied by thoughts of incompetence and a loss of identity. Employee burnout in severe cases can incur higher financial costs to a company due to illnesses brought on by prolonged periods of stress. In some cases, an employee will leave the company entirely.

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Long Term Sick Leave

What constitutes long term sick leave also differs between countries but is generally anything over 30 days or 4 consecutive weeks that an employee needs to take off due to a more serious unexpected medical condition.

  • Long term sick leave can include:

  • An accident at work
    Cancer
    Cardiovascular diseases 
    Musculoskeletal diseases 
    Mental illness
    The worsening of an existing or chronic medical condition

Long-term sick leave is more difficult to manage, both for the employee for obvious reasons, but also for employers. There are two stages that need to be managed by an employer. The first stage is managing the time of absence of an employee, and the second stage is when they return to work following their long-term sick leave period. Employers may have to find replacements to fill the sick employees’ shoes while they are off, adjust when they return to work and potentially amend their work duties if their illness impairs them in any way.

One of the common questions is whether it’s possible to terminate an employee’s contract if they require long-term sick leave. Most of the time, in many developed nations, there are stringent labor laws that forbid termination on ill-health grounds. Many countries also have strict discrimination laws that make it  unlawful to terminate an employee on grounds of disability resulting from illness.

The Difference Between Paid and Unpaid Sick Leave

Sick leave, both short and long term should not be mistaken for unpaid leave or extended leave. Unpaid leave is exactly that, time off from work without any form of compensation and is usually asked to be taken voluntarily by an employee. Usually, this means that an employee has used up all their entitled sick leave days or other leave entitlement days and are requesting extra time off knowing they will not be paid for this time. Upon any approval by employers for a period of extended leave request means that the employee will keep their job. Requests for unpaid time off can vary in length, but usually are no longer than a maximum of 3 months.

Country examples for legally mandated sick leave entitlements

As mentioned, the conditions for pay, timeframes and eligibility differ immensely between every country.

United Kingdom (UK)

In the UK, short and long-term sick leave is required by law, known as Statutory Sick Pay (SSP). Employees do not have to provide proof of illness by a medical professional unless they are ill for more than 7 days. Long-term illnesses are any time off that is longer than 4 weeks. Employees who take this time to recover from long-term illness are still eligible for annual leave entitlements. The minimum SSP amount starts at £99.35 per week for up to 28 weeks unless the company has its own sick pay scheme in place. You can learn more about employee benefits in the UK, here.

United States (USA)

In the USA, there are no federal requirements for a private company to offer paid sick leave. They can, however, take up to 12 weeks unpaid sick leave by law. At the state level, some states do have laws that make it a mandatory requirement to offer some paid sick days to employees. In some cases, employees can use these days to look after sick family members as well. Some companies choose to offer paid sick leave as a non-cash, ‘in kind’ benefit, in employment contracts.

Australia

Australia has strict National Employment Standards and make paid sick leave mandatory for all workers except those in casual employment. On average, full-time employees are entitled to at least 10 days paid sick leave, and if it is not used will accumulate over the entire time they are employed with each employer. This means there is no maximum of sick days an employer can take if they have accumulated enough.

Germany

Under German law, if an employee falls ill, they are entitled to their full salary for the first 6 weeks of their illness. After the 6 weeks, statutory health insurance that is obligated to be provided by all employers can kick in and cover the remainder of the time off that is required for the employee to recover.

Spain

Spain has just introduced a new progressive policy as an extra term of leave on top of sick leave called menstrual leave. This policy caters to women who experience severe menstrual symptoms, allowing them to take up to 3 days off a month.

How Can a Global PEO Help Manage Sick Leave?

A global PEO or a Professional Employer Organisation can help manage sick leave entitlements, as well as any other country-specific mandated benefits when hiring foreign workers, improving the overall employee experience. A Global PEO can also provide health insurance for remote workers, which can put remote employees’ minds at ease when they do get sick, and prevent employee burnout from not managing their work-life balance properly in countries with high medical costs. Global PEOs are experts in hiring talent from anywhere in the world, while looking after compliance and payroll matters for each country’s labor laws.

Conclusion

If you are looking to expand your business or hire employees in a new country, but are finding it difficult navigate foreign labor laws, then a Global PEO such as Horizons can help. Horizons is a leading global PEO that can support businesses internationally by managing leave and benefits, while taking care of foreign payroll and compliance obligations related to employment.

Frequently Asked Questions (FAQ)

Open and honest communication between you and an employer is important when asking for to take time off to recover from an unexpected illness. It is crucial to check if any policies exist within the company on how to go about letting your employer know you are taking time off due to illness.

Whether or not you can take sick leave without hassle really comes down to which country you live in. However, many countries have mandated rules around paid sick leave entitlements. You should take sick leave anytime you fall ill and only return to work when you have fully recovered.

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