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HR Insights: Paid Sick Leave combined with PTO

Is it against the law to have Paid Sick Leave combined with PTO?

HR Insights: Expert answers to common HR Questions

Scenario:

"I thought we were required to give employees a separate paid sick leave bank to comply with the new paid sick leave law, but I heard about another employer who is using PTO instead? I'm concerned that offering PTO for this purpose might be against the law."


Answer:

Good news – you can offer PTO to your employees to satisfy the Colorado Healthy Families and Workplaces Act (HFWA) without having to add a separate paid sick leave bank. (Paid Sick Leave combined with PTO)

CDLE’s website states (https://cdle.colorado.gov/hfwa):


Paid leave in a PTO policy, or a Collective Bargaining Agreement, can satisfy HFWA, if it covers all the same conditions or needs, at the same pay rate, and with no tougher requirements (documentation, notice, etc.) than HFWA (see Colorado Wage Protection Rules, specifically Rules 3.5.4 and 3.5.8).


What this means is that you can use your PTO policy for paid sick leave as long as it meets the minimum requirements of HFWA, which include accruing a minimum of one hour for every 30 hours worked (on regular and overtime hours), allowing employees to access their leave for HFWA-qualifying reasons without any repercussions, keeping the same documentation and notice requirements, and paying employees their paid sick leave hours at their regular rate of pay.


One thing to keep in mind is that in Colorado, PTO, just like Vacation, is required to be paid out at time of separation, whether voluntary or involuntary. If you decide to use PTO to satisfy the HFWA paid sick leave requirements, these hours are also required to be paid out at time of separation and are required to carry over from year to year. A bank of paid sick hours is not required to be paid at separation but is required to carry over up to a minimum cap of 48 hours*.


Combining paid sick leave and PTO/vacation can be one way to allow employees flexibility in how they use their paid leave for whatever purpose they choose – including HFWA qualifying reasons. It can also simplify the paid leave administration for the employer, as you only have to track one policy.


Employers that want to implement a combined PTO policy should be aware of specific state regulations, like in Colorado, which prohibits the forfeiture of accrued PTO. This means if employees accumulate PTO hours under a PTO policy, you’ll want to consult with Human Resources if you want to make changes to your paid leave structure in the future.


*HFWA encourages employers to be more generous with paid sick leave, whether under a paid sick leave bank or PTO bank, the minimum cap allowable under the law is 48, but employers can allow employees to accrue at a higher rate per hour worked and can have a higher cap than the minimum.

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