How to Determine Accrued Sick Pay for Part-Time Employees
Not every company is required to pay departing part-time employees for accrued sick time. If company policy is to pay employees for unused sick pay, though, the business must track how much sick pay each part-time employee has earned and accrue the balance in case it needs to pay it out.
There's no federal law that requires employers to offer paid sick leave. Some states -- Connecticut, California, Massachusetts and Oregon -- and several municipalities do require that employees receive paid sick leave.
Even if an employee does receive paid sick time, there's no federal requirement that employees be compensated for accrued sick days. However, some states -- like California, for example -- do require that accrued sick days be paid to departing employees if the sick time is considered paid time off. In California, sick time is considered paid time off if an employer combines vacation days and sick leave into one bank and allows employees to use paid days for either purpose. In this situation, the employer would be required to pay part-time employees for accrued sick time.
Regardless of state or local laws, some companies agree to pay departing employees for accrued sick leave as an employment incentive.
Use the company handbook or employment contracts to determine at what rate part-time employees accrue sick leave and verify that accrued sick leave must be paid out.
Determine the beginning balance of sick pay. This is the amount of sick pay that was accrued as of the beginning of the accounting period. For example, if you're calculating accrued sick pay for 2013 and part-time employees had accrued $1,000 of sick pay as of December 31, 2012, the beginning balance is $1,000.
Calculate how much sick time the part-time employee earned during the accounting period. To do this, multiply the number of months worked by the rate that employees earn sick time. For example, say your part-time employee worked 12 months in the accounting period and earned half a day of sick leave every two months. Sick time earned is 12 months multiplied by 0.5 days, or 6 sick days.
Subtract the amount of sick days used during the year by the part-time employees from the amount earned to find accrued sick time for the accounting period. For example, if the part-time employees collectively used 4 sick days in 2013, accrued sick leave is 6 days minus 4 days for a total of 2 days.
Multiply accrued sick leave by the employee's daily rate of pay to find accrued sick pay. If, for example, the part-time employee earns $20 an hour and works 6 hours a day, the daily rate of pay is $120. Accrued sick pay would be $120 multiplied by the 2 accrued days for a total of $240.
Add net sick pay accrued to the beginning balance to find accrued sick pay as of the end of the accounting period. In this example, that would be $1,000 plus $240 for a total of $1,240.