Payroll setup: Sick leave policies

Paid sick leave is an optional benefit that employers may grant to employees. Several employers address the issue of periodic absence from work due to ill health by providing employees with a limited number of paid days off per year often referred to as “sick days”. This type of plan is usually found in workplace policies or collective agreements. However, some provinces and territories require employers to provide unpaid sick leave.

Before you run payroll (and even before you add your first employee) it is helpful to set policies for paid sick leave:

1. Go to Employees.
2. Select or add your employee.
3. Under Profile, select Edit in the Pay types section.
4. In the Time off pay policies section, select the Sick pay dropdown and select Add new sick pay policy.
5. Enter the frequency that the sick time will accrue and the maximum hours of sick leave the employee can bank. For example, if the employee is granted 10 hours of sick time at the beginning of the year and the time expires at the end of the year, you will input the following in each field:

• Accrual Frequency: At the beginning of the year
• Hours earned per year: 10 hours
• Maximum Available: 10 hours. When the employee’s sick time reaches this amount, no more sick hours will be added until the banked amount is less than the number you entered.

7. Click OK to save the policy.

Note: A sick pay policy needs to be set up for each employee you are granting sick pay.

You can review this article for more information on sick pay laws and regulation by individual province and territory.

For more details, watch our video on setting up Payroll.