BC Sick Pay treatment in QBO Online

accu1 · ‎January 20, 2022

Hi,

The issue is that QBO Payroll sick pay leave balance is currently shown in hours on online employee paystubs. My understanding of newly established paid sick days in BC is that it is primarily based on max 5 "Days" a year for eligible employees. Then for each sick day you pay the employee their average pay day of the last 30 calendar days before sick days. The way we currently pay employees is changing this average pay in hours and pay it as sick leave. It is good up to this point. However, to keep the sick balance for employee pay stubs you have to record the entitled sick leave in hours (Current options are 40 "HOURS" max a year. QBO payroll then deduct the sick hours from the entitlement and show the balance as available "HOURS" on pay stub. This is where it goes wrong. The available sick hours shown on employee paystub is only correct for the day after the sick leave. Because the average previous 30 calendar pay day changes day to day. When employee get sick the available sick hours shown on their paystub is not necessarily available. Moreover, the hours may be available on paper, but the employee might have already used all 5 "DAY". My recommendation: Change (or make available for BC) in QBO Payroll software the record keeping from "HOURS" to "Days". How you are going to design it on pay stub for calculation and presentation is up to QBO Payroll software engineers. It is the right thing to do. BC sick leave max is legally 5 DAYS a year not necessarily 40 hours a year (There are many employees who work less than 8 hours a day).

Please let me know if there are other work arounds to address this issue.

Jen_D · ‎January 21, 2022

Thanks for sharing your insights with the sick pay feature in QuickBooks Payroll, accu1.

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McBrideBookkeeping · ‎January 21, 2022

Hey Accu1,

We couldn't agree more. You cannot put 40 hours in there as you'd be admitting liability for that whole amount even if someone reduces hours to an average of 6 per day. After some testing we decided to do our own thing but still utilize the QBO Sick Pay feature. You're welcome to copy what we did, here's an excerpt of what I sent to my clients explaining the work-around we had to use. (Better than using the Gear Icon for Feedback)

There's a couple of Key work-arounds we need to highlight in order for this to work properly.

Quickbooks is only able to Manage Sick Pay as an Hourly allowance
The Legislation is for 5 DAYS @ an average days pay
An Average days pay is calculated WHEN they take a sick day
We cannot 'guess' in advance the hours a person may be entitled to
The good news is that it will reset the 5 days on work anniversaries as intended

Because of these facts we have elected to use the QBO sick pay policy but input 5 hours as "Days". This means so that the "Available" balance which an employee sees on their payslip is actually "Days" (See below)

Sick Days on Payslip instead of hours.png

When we pay out a Sick day to an employee we then calculate the average hours they are entitled to and pay that out. This will be paid at their standard hourly rate and will show as hours "Used". We will then adjust the "Available" # to be less one day. See the image of a payslip below for more clarification. We also intend to make a memo on that payslip to note how many days have been used so far.

Sick hours Used and then Sick DAYS available.png

We realize this may be a little confusing at first but after testing various scenarios internally this method requires the least effort overall. Please update your employees on this change and let them know that "Available" means Days so there's less confusion.

If you want to know how to implement the process in practice send me a message and I'll forward you those instructions as they're a little longer. So far it's working for us. We've had maybe 10-12 claims already across a few clients.

I hope this helps get you on the right track

Please mark this answer as a helpful solution if it answers your question
Thanks
McBride Bookkeeping

accuaccinc · ‎January 22, 2022

Thanks for the suggestion! Yes, this is the work around coming to mind for now! However, the manual process results in increased risk of errors, misuse and in weakened internal controls. QBO Payroll should address the issue quicker.

P.S. Not sure if QBO resets sick leave automatically on work anniversary (or, as some say, on calendar year for current employees). Hopefully it gets resolved before we get to that point.

McBrideBookkeeping · ‎January 22, 2022

Yes I agree,

Better than tracking it on a spreadsheet for now, which is what some of clients have opted to do in this case.

The Work anniversary reset seems to so far in our limited testing. and we're using a 5 "day" balance plus 5 "Day" max in the settings btw.

AJ2013 · ‎March 23, 2022

Hello - We are currently running QB Desktop, but are considering a switch. Can anyone tell me: 1) Does QBO have the ability to capture & report the floating 30 day wage data (and therefore average days wage) needed for the BC Sick (and Stat) calculation? We currently have many casual employees (hence no "standard" day), and use an Excell spreadsheet... which is painful. 2) Does QBO have the abiliyt to track more than one Sick (or other leave) hours? We have a company sick policy in place which differs from the BC Sick schema and are trying to figure out how to make them work in paralell. Thanks very much.

McBrideBookkeeping · ‎March 23, 2022

Hi @AJ2013

Unfortunately not to both questions.

You would need to track average pay somehow yourself, like a spreadsheet.

It can run different sick pay policies but my understanding is the new legislated BC policy is a minimum so if your internal policy exceeds that then it trumps it and you should use your own policy.

FYI QBO Payroll is VERY Limited. For more complex Payroll clients we use a 3rd party

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