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<< Back to FAQ/Fact list Q: We are trying to get a handle on our policies. We have staff members who have negative sick leave balances. Can we legally transfer their vacation into their sick leave to help reduce their balance? Also, if they resign or are terminated before the sick leave is paid back, can we legally deduct that from their last paycheck? A: Since legal requirements vary from state to state, you should check with a local employment attorney to find out whether you can properly deduct sick leave pay from an employee’s paycheck at termination. Many states do not allow such a deduction to be made, and certainly not without written authorization from the employee. Caution is the key when considering deductions from an employee’s paycheck. The best way to get around this issue is to only pay sick leave after it has been earned. Some organizations allow an employee to use vacation leave to cover for sick time, especially if the sick leave account has been exhausted. If the sick time is covered by the federal or a state Family and Medical Leave Act, the employee may have the choice to use vacation time after sick leave has been used. A trend we see is the combining of sick and vacation time to Paid Time Off, which can be used for either instance. The key is if an hourly non-exempt employee has used up available leave (for the purpose noted in the policy), any additional time taken off should be unpaid. For salaried or exempt employees, it will depend on the amount of time taken, state law and the impact on their weekly salary. Keep in mind, if you provide one employee with an extra benefit, you may be setting precedent for this to be provided to other employees.
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