A Critical Analysis of Sick Leave Pay Benefit

People look for a job or profession that does not only fit their degree, ability, expertise and financial needs.

A job should have an encompassing totality that will address both the compensation and other equally important benefits of an employee. In fact, benefits are a significant component of a worker’s over-all compensation package. This is because benefits, when coupled with a just and rewarding compensation, are a primary motivator for a worker. Thus, companies continue to come up with different manners of rewarding employees for their performance.Sick leave is one such incentive or benefit that appreciates an employee for accomplishing a given task. It is generally given by employers to their employees as an additional compensation for them to be more drawn, persisted and inspired in their respective jobs. The surrounding conditions of sick leave differ by nation, government, and the concerned industry. Despite its varying legal provisions and that its availability depends on some debatable components, it will always be fair and motivating to note that sick leave benefit is essential to the professional upliftment and satisfaction of an employee.

One way to inspire employees to work on their expected tasks to the best level of their performance is the introduction or giving of “add-ins” benefits such as the provision of paid sick leave. Allotting the sick leave pay as part of the compensation package has been generally used by companies in their attempt to foster happy and contented employees. This is because in doing so, a win-win strategy is being utilized where in happy employees are motivated to work well. This idea will then produce an acceptable and excellent result that in turn will be beneficial to the employer.The additional perk of paid sick leave is aimed to increase the economic security of every employee. For the purpose of concentrating on one of the important benefits, this paper will focus on one paid incentive: the sick leave. What is sick pay leave? Sick leave is a condition or situation where in an employee takes time off from work or could not report for work because of sickness.

Hence, sick pay leave refers to an employee benefit that constitutes leave payment, generally and usually in monetary compensation.It is a paid leave that is taken by an employee during his or her period(s) of illness, thus the term sickness pay or sick pay. According to the U. S.

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Family and Medical and Leave Act of 1993 or FMLA, sick pay or paid sick leave is an employee right that entitles one to have or accumulate up to 12 weeks of leave or absence from work to care for yourself or family member(s) in the event of sickness or serious health condition. This authorizes an employee not to lose his or her current job or other benefits (cited in Employee Issues, 2003).In the United States, a lot of American employers provide payment for sick leave. On other instances, some employers even increase sick leave pay when their employees resigned or fired from work.

The content site About. com cited the online legal source Nolo. com which said that there are no government laws that authorize or legally order the payment of sick leave. In this view, sick pay leave is generally taken as a strictly voluntary benefit given by employers to their employees.Employers normally provide this as an incentive to attract and retain their employees (cited in About. com, 1996).

According to the same content site, employees can avail or are authorized to sick leave pay if their employers offer such benefit. Availing of such benefit is or should be in compliance with the terms and conditions of the employment contract binding the employee and his or her employer. Since it is self-imposed, the employer has the call about the components of the sick pay leave.For instance, the company requires the employee filing for paid sick leave to submit a medical certificate or doctor’s note (About. com, 1996). Sick Pay Leave History According to the Encyclopedia of Small Business, the provision of benefits has traced its popularity after the World War II. It is the period when salary restrictions resulted in employers having difficulty in offering competitive wages. The situation caused the employers to give additional benefits to the required monetary compensation in order to attract, retain, and inspire their employees to accomplish their expected task.

Since then, the provision of such incentive is practiced in present day workplace. The said source added that the benefits are not in cash rewards but they have monetary amount. Unlike the regular or required compensation, a lot of these additional benefits are not subjected to tax (Encyclopedia of Small Business, 2007). The Encyclopedia of Small Business added that the law does not require a lot of benefits. However, they are generally and usually included in the over-all compensation packages offered to employees by a majority of employers.The same source stated that for the past decades, some of the common benefits given to employees are the “health insurance, accidental death and dismemberment insurance, some form of retirement plan (including profit-sharing, stock option programs, 401(k) and employee stock ownership plans), vacation and holiday pay, and sick leave” (Encyclopedia of Small Business, 2007). How does the benefit works? What entitles an employee to be paid when he or she is sick differs according to each job considerations.

Accordingly, there are also various sick pay systems already in place.The provision of paid sick leave or even the entitlement of an employee to a sick leave differs in judicial practice of every country, government, and even a particular industry. An employee can avail of such benefit depending on several considerations. One of these considerations is the employee’s status of employment, which pertains to whether the employee is holding only a casual status or already a permanent employee. Under the provisions of paid sick leave, an employee is generally provided a certain number of days a year as compensated leave of absence due to sickness.

This usual condition being practiced in current workplace set-up requires the employees to submit a medical certificate. The benefits work according to specific procedures of the company. Typically, an employee will relay his or her leave through various means on the first day of absence from work. Majority of employers generally allow up to two days of sick leave and do not require medical certificate. For extended period of sick leave, the employer would demand a medical certificate from the employee.

Upon return to work, the employee needs to accomplish a sickness absence form.In addition, depending on the location of work, an employee will be asked to immediately go back to his or her work. There may also be instances that a return to work or back to work interview will be conducted. An employee is also asked to inform the company whatever hospital treatment he or she received. Sick leaves may be caused by prolonged medical conditions, critical or serious health conditions, and medical conditions caused by accident. In other countries, the government gives a minimum provision of annual five days’ paid sick leave when an employee has a continued six months of employment.After each consequent one-year period, the state gives an additional five days sick leave with pay.

According to the Labor Department of new Zealand, for instance, sick leave can be availed in times of illness and injury of an employee. This can also be asked when the employee’s immediate family member, such as his or her spouse, children and elderly parent, are ill or have suffered serious health condition and injury that requires medical attention.During instances when an employee is not yet entitled to a paid sick leave (e. g.

the employee does not yet hold a regular position because he or she has been with the company for only less than 6 months), flexibility may be done in order to accommodate the benefit. The employer and the employee can enter into a particular agreement where any sick leave taken is regarded as an advance that can be deducted in the event that the next entitlement occurs (New Zealand Department of Labour, 2004). Eligibility to sick leave pay The payment for an employee’s absence from work due to sickness usually depends on his or her status of employment or based on the terms and conditions specified in the contract of employment.The written or verbal agreement between the employer and the employee that will determine the sick leave payment may be implied by what is the traditional custom and practice of a particular country. The United Kingdom government for example has its specific conditions on how one employee becomes eligible for the sick leave pay benefit. According to its Central Office of Information, if the employer has its own sick pay system, an employee must be compensated or paid according to what is due under the said scheme.In the absence of any entitlement under the company scheme, the employer is still required to pay an eligible employee the Statutory Sick Pay or SSP (UK Central Office of Information, 2005). When an employee starts his or her employment, the employer must give a “written statement of employment particulars” within the first two months upon the start of work (UK Central Office of Information, 2005).

Based on this, the information about the employee’s sick pay scheme would be determined.According to a typical benefit scheme, an employee becomes eligible for the sick leave pay benefit after he or she accumulated the required or minimum period of service such as the three-month probationary period. Thereafter, an eligible employee will then get his or her normal compensation during the times that he or she is absent from work due to sickness. An employee’s eligibility to the said benefit is further upheld by having him or her get a half-pay for a later period before any sick leave that an employee takes becomes uncompensated (UK Central Office of Information, 2005). Sick Leave Pay RulesAs a general rule, sick leave is a kind of absence from work afforded to employees who need to have time off from work because of sickness or a personal situation concerning their family members. Because almost all employees occasionally require such particular absence, the establishment of a clear, governing and guiding principle about sick leave is essential.

Sick leave is literally self-explanatory and may constitute from basically all kinds of illnesses, from an ordinary cold to a more critical health condition that requires the employee to leave work for a certain period to receive the right treatment.It can also be extended to cover instances such as sickness of immediate family members. Depending on the employee’s eligibility, sick leave can be paid or compensated according to a particular state law or specific guidelines set by a company (Encyclopedia of Small Business, 2007). A lot of companies in most countries assign a specified period for sick leave, e. g. , five sick leave days in one year. In the event of unused sick days leave, it is the company’s discretion whether to allow an employee to roll over or add the unused number of days for sick leave to the next year.

On the other hand, there are companies who pay the employee who did not take available number of days for sick leave, in other forms. These include converting the unused sick leave into cash or fringe benefits and giving extra days for vacation (Encyclopedia of Small Business, 2007). Levy (2000), in his article in Business First, talked about the topic on employee attendance and described the three characters of employees that majority of businesses have to handle. The Encyclopedia of Small Business cited Levy who said that ordinarily, few employees will seldom be off from work due to sickness.

According to Levy, these employees think of themselves as “superman” or “superwoman” and make themselves appear that they can still work or do their tasks even if they are not feeling well. The second character of employees constitutes the majority who utilize limited or a few number of sick days annually. These employees take time off from work that is just well within the company’s policy.

The last group, who comprises about less than 10 percent of the total number of employees, are the ones who maximize the number of days of being absent from work because of illness.Moreover, they also use other kinds of leave such as vacation leave, oftentimes citing sickness as the reason. These kind of employees are the ones who cannot clearly draw the line between what is actually feeling sick and the condition of just “not feeling well. ” This attitude, in turn, manifests poor performance on unnecessary absences from work. If these employees change for the better especially regarding their attendance record, it would have a great positive effect on their performance and will turn to be beneficial to the company (cited in Encyclopedia of Small Business, 2007).Meanwhile, the rule differs during instances when other small companies do not provide or even pay sick leave.

This is mainly because of the practice of per hour basis where a lot of the employees are compensated according to their number of work hours instead of a regular of fixed salary. In this kind of work set-up, employees are generally discouraged from being absent from work or having uncalled time off. This is the principle of no-work, no-pay where employees not reporting for work will not receive a salary.In determining compensation for sick leave, it is a policy for every company to have Bundy clocks or official attendance records. Employers use these devices to monitor or know the exact number of hours a specific employee has worked in a day so that they can be compensated accurately (Encyclopedia of Small Business, 2007).

Pery (1996), on the other hand, stated that small companies should also be conscious of potential judicial problems or traps that result from firing an employee for untimely absences from work, or firing an employee who has been absent from work more than what the company has allowed.This is because sick condition is a determining factor for a company whether to provide compensation or not for the sick leave. According to Perry, “if your business is small enough that you operate as the sole supervisor, you are still open to legal problems if you don’t have a written policy followed to the letter.

Employees who are terminated for excessive absenteeism will sue, claiming discrimination over those employees—possibly the ones who are more vital to your business success—who are absent just as often” (Perry, 1996).Criticisms Employees’ utilization and misuse of sick leave as well the provision of a payment for such benefit is an issue that triggers a fervid reaction or debate from concerned people. The response or arguments are echoed by both the employers and employees. From the view of the company, providing paid sick leave is equivalent to an increase in operational expenses.

There are also instances when the company experiences problems related to income generation because of employees who are absent from work due to sickness.Since the main goal of employers is to increase profits and reduce costs, they consider the provision of sick leave benefit a debatable issue. For them, an employee’s absence from work is an increase in operational costs and loss in productivity. In case of employees in sales, absences can translate to loss in profit. Although the sick leave pay is required by law or dictated by the policy, some employers still have a hard time to see the logic behind compensating employees even if they took a day or days off from work.Somehow, it is a double jeopardy because there is already a loss of productivity yet there is still a need to pay the employee who is eligible for the sick leave pay benefit.

This is because of the fact that the job that the absent employee was supposed to perform on the specific day will be done by another employee(s). Yet, there is still a chance that the job of the absent employee will not be completed by the employee(s) assigned to take the absent employee’s job (Encyclopedia of Small Business, 2007). The benefit of sick leave pay is also open for abuse by dishonest employees.The employers argue the situations where an employee cheats by calling in sick or reporting that he or she could not report to work because of sickness. This practice becomes a habit for cheating employees and implies double loss of income for the employers in terms of production and benefit payment. For employers, it costs a lot of money every time an employee is sick. Moreover, sick leave incentive may eventually have a negative effect on another employee who is asked to do the job of the absent employee (who enjoys the privilege of being paid even if sick).

The substitute employee, especially if he or she is still not eligible, may harbor resentment especially in cases of repeated absence of the regular employee. This practice will in turn affect the morale and productivity of the concerned employee and eventually hurt the company sooner or later. This criticism is usually defended by employees who invoke that payment of sick leave to eligible employees is what is required by the law and is generally observed by the business sector (Encyclopedia of Small Business, 2007). International ComparisonThe conditions surrounding the number of sick leave as well as its compensation vary widely among different industries or companies worldwide. It is a general and standard rule of companies worldwide that employees who have attained a regular status (more than six months of employment) are entitled to the sick leave pay. For example, the required number of days for sick leave annually in the US is five, 20 days for Sweden, and 26 days for Poland per employee (Osterkamp & Rohn, 2007). However, there is no systematic analysis of the potential causes for such variation in number of days in every country.Osterkamp and Rohn (2007) added that two factors are to be considered in this comparison.

These are the objective causes and behavioral reactions. The first factor includes “general health situation, employment of women and older persons. ” The second factor, on the hand, consists of “macroeconomic conditions, like unemployment or the possibility to work outside the official labor market, and to the design of institutions, like the generosity of granting sick leave or the strictness of employment protection”(Osterkamp & Rohn 2007).Pointing out the worldwide comparison, the two authors reported that economically speaking, the primary explanations for the difference in the provisions for sick leave in many countries would be the generosity of compensating sick leave, the sternness of employment security and the employment of the elderly.

Osterkamp and Rohn (2007), however, clarified that the unemployment condition and the employment of the women sector are not contributing factors for the international difference in the sick leave compensation.The two authors concluded their findings by stating that the “institutional variables are an important factor in explaining differences in days of absenteeism due to sickness across countries. ” This implies that the degrees of generosity providing sick leave payment and the strictness of employment security are the contributing factors for the differences of such benefit worldwide (Osterkamp & Rohn 2007). Conclusion The issue of sick leave pay or benefit is significant in the employment sector. As such, it should be treated according to what is legally required and what is generally accepted and practiced by companies worldwide.This incentive serves as a motivation for employees to perform what is expected of them. Thus, it is imperative for employers to recognize that sick leave pay is a motivating factor for the employees as well. Moreover, it is a company obligation that has to be fulfilled.

Nevertheless, in whatever perspective, the sick leave pay benefit should be discussed upon the hiring of the employee. The employers and the employees should reach an agreement regarding this matter so that both parties know their rights and obligations.


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