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Legal considerations in eliminating sick pay benefits

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in FMLA Guidelines,Human Resources

Q. Is it legal in the state of Colorado for an employer to take away paid employee sick leave? If sick leave is a benefit, can the employer suddenly decide that it’s going to take it away, or does it have to pay you for the hours? Can the employer be required to freeze it for you to use if you need it? Can it be forced to pay accrued sick leave if you leave the company?

A. Colorado law does not require private-sector employers to offer sick pay, and so it is the employer’s choice whether to offer it.

Accordingly, an employer also can decide to stop offering it, unless there is some type of enforceable agreement in place (a handbook might in some circumstances be enforceable) that limits its ability to end this benefit.

If an employer decides to stop offering sick pay, it must permit employees to retain earned and vested sick pay only if the “sick pay” could be considered “wages” for purposes of the Colorado Wage Act. That statute expressly provides that “vacation pay” meets the definition of wages, but the statute does not mention “sick pay.” Therefore, there is no conclusive answer to offer, but if there is a dispute, the terms of the handbook may be significant.

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