Lost in the laws? While there are many different things that are important for running a business, one of the most important is your time off policy. The right time off policy can make or break a potential candidate’s decision as to whether to work for your company or not; it can have a great effect on the company culture and the happiness of your employees. There are also certain laws to be followed when it comes to time off, meaning your policy also helps to determine how legally compliant your business is as well. Just take one of these factors into consideration, and you may already feel like you’ve got a challenging task ahead of you—now consider all three. While it may seem simple at first, creating a comprehensive time off policy can quickly spiral into an overwhelming, time-consuming process for all.
At Payday HCM, we understand how difficult and important it is to create a good time off policy. We get plenty of questions from clients about all aspects of their time off policy. We want to ensure all businesses have access to the resources they need to cover every facet of their business, regardless of whether they’re our client or not. Some of the questions we receive most often, though, revolve around the legal requirements of a time off policy, specifically the requirements surrounding sick leave.
So, in this article, we’ll be breaking down five of the common questions that we receive about New Mexico’s paid sick leave law and their answers. The questions we’ll cover are:
- I Have Employees In NM—Am I Required To Offer Paid Sick Leave?
- Do I Have To Offer Paid Sick Leave During An Employee’s Probationary Period?
- Do Employees Accrue More Sick Leave While Working Overtime?
- How Many Hours Of Sick Leave Can An Employee Use Within A Year?
- If An Employee Quits, Do I Have To Pay Out Their Sick Time?
We’ll go into more detail on the specifics of the laws and guidelines that affect each of these different facets of sick leave. By the end of this article, you’ll be equipped with the knowledge you need to approach the time off policy creation process with confidence.
I Have Employees In NM—Am I Required To Offer Paid Sick Leave?
Firstly, we’ll start with one of the most important questions regarding New Mexico’s paid sick leave law: as an employer, are you required to offer paid sick leave?
Answer: Yes, Employers Must Allow Employees To Accrue Paid Sick Leave
The basis of the Healthy Workplaces Act of 2021, the piece of legislation that established the current framework for New Mexico’s paid sick leave law, requires employers to allow employees to accrue and use paid sick leave. The law sets the accrual rate at one hour of paid sick leave earned for every 30 hours worked.
Employees can use their accrued sick leave for their own or a family member’s illness or injury, or legal and family issues. The law requires that employees earn the same hourly rate during their paid sick leave as they would while working and that they receive the same benefits.
Do I Have To Offer Paid Sick Leave During An Employee’s Probationary Period?
Next, we’ll cover whether or not employers are required to offer paid sick leave to employees who have been recently hired and who may be in a probationary period.
Answer: Yes, All Recently Hired Employees Must Accrue Paid Sick Leave
New Mexico law requires employees being accruing paid sick leave upon their hiring date. While your organization may have different policies and procedures when it comes to new hires and possible probationary periods, these rules do not apply to paid sick leave—as soon as an employee starts work, they begin to accrue sick leave.
The same rules apply to businesses that opt to frontload their sick leave as opposed to having employees accrue sick leave. Employers who frontload sick leave must offer their employees 64 hours of paid sick leave for the year. Employees who are hired mid-year may receive a prorated amount of sick leave adjusted for their hire date.
Do Employees Accrue More Sick Leave While Working Overtime?
Next up, we’ll look at how NM’s paid sick leave guidelines intersect with employees working overtime and whether overtime affects how much sick leave an employee accrues.
Answer: Yes, Overtime Hours Worked Do Accrue Sick Leave
The Healthy Workplaces Act and, by extension, the paid sick leave guidelines don’t make any distinction between types of hours worked. The Act defines hours worked just as hours “actually worked,” so not including any vacation time, time spent out of the office, or any sick leave taken.
Therefore, employees who work overtime will still accrue paid sick time while working overtime hours. The accrual rate is the same for overtime and regular working hours. The only exceptions here would be employees who are exempt from overtime under the Fair Labor Standards Act. Exempt employees include certain categories, such as executive, administrative, professional, and outside sales employees.
How Many Hours Of Sick Leave Can An Employee Use Within A Year?
The next question we’ll take a look at is how many hours of paid sick leave employees can actually use within a year.
Answer: Employees Are Permitted To Use At Least 64 Hours Of Paid Sick Leave In A Year
As outlined by the HWA, employees are permitted to use at least 64 hours of accrued paid sick leave within a year. This isn’t a top-end limit, however: employers can choose to allow their employees to use more than 64 hours of paid sick leave within a year, but employers cannot allow employees to use less than 64 hours of paid sick leave within a year.
One other crucial distinction to make here is whether or not accrual is capped at 64 hours. The HWA prohibits employers from capping the amount of sick leave employees can earn in a year. Regardless, employers only have to allow their employees to use 64 hours of paid sick leave within a year, meaning an employee can have more than 64 hours of paid sick leave but can only use 64 of those hours during a year.
If An Employee Quits, Do I Have To Pay Out Their Sick Time?
Finally, we’ll go over the guidelines for paying out earned sick leave and whether employers are required to do so.
Answer: No, Employers Are Not Required To Pay Out Accrued Sick Leave
The HWA does not require employers to pay out any unused paid sick leave upon separation for any reason, including termination, resignation, or retirement. This doesn’t prohibit the practice of paying out unused sick leave, however—employers still have the option of setting a policy of paying out unused sick leave.
This gets slightly complicated when looking at combined PTO policies that still operate on an accrual-based model. Under the New Mexico Wage Payment Act, any accrued paid time off is considered wages, as it is viewed as compensation for hours worked. Therefore, this unused PTO, which includes sick leave, would need to be paid out upon separation.
Unfortunately, the law is somewhat unclear as to whether or not this is the case. For employers who offer a combined PTO policy that doesn’t explicitly state it exists in order to comply with the HWA should consult an employment lawyer for more information regarding whether they are required to pay out sick leave.
Don’t Let Your Leave Policy Get Left Behind
Creating your business’s time off and leave policy is one of the most important steps in establishing the policies and procedures of your organization. That doesn’t make it easy, however. You need to create a leave policy that not only supports your employees and serves their needs, but also is cost-effective for your business and is compliant with any laws or legislation that it may need to be compliant with. Without the proper help and resources, this process can be daunting and feel overwhelming. With the information provided in this article, you’ll have a better idea of what kinds of things need to be included in your time off policy and put you one step closer to creating that ideal time off policy.
Sick leave is only one form of time off. Vacation, medical, family—there are all sorts of different kinds of leave for all sorts of different reasons. When it comes to offering time off, it’s important to know not only what’s required but also what your employees want. A good HR provider can help you ensure your time off policy is both comprehensive and compliant. Check out our list for the top ten HR providers in Albuquerque, NM, to help find your potential partner.
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