Think juggling PTO and sick leave policies is hard? Try doing it across 10 different states, all with their rules.

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If you're managing HR or running a business with employees in multiple states, you already know how tricky paid leave compliance can be. And in 2025, it’s only getting more complicated.

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Right now, 19 states and Washington, D.C. have passed laws requiring employers to provide paid sick leave. More are joining in, including Alaska, Missouri, and Nebraska with new laws taking effect this year.

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The problem is that each state has its rules on who qualifies, how leave is earned, and how much employees can use. That means what works in New York might get you in trouble in California.

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This matters because non-compliance can result in significant fines, legal issues, and dissatisfied employees. On the other side, getting it right helps you build trust with your team, avoid legal risks, and show your people you care.

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In this article, we’ll break down what’s changing in 2025, highlight the biggest compliance challenges for multi-state businesses, and give you tips to stay on top of sick leave and PTO laws.

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An Overview of Paid Sick Leave and PTO in 2025

As the U.S. labor laws continue to change, it’s becoming more challenging to stay compliant with multi-state sick leave and PTO laws in 2025.

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With several states implementing or expanding paid sick leave mandates, employers operating in multiple jurisdictions must be proactive in understanding and adapting to these regulatory changes.

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Here is an overview of the new state-paid sick leave laws taking effect in 2025 and important local ordinances that may also impact your compliance strategy.

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Alaska: Paid Sick Leave Effective July 1, 2025

Alaska's new paid sick leave law mandates that employees accrue one hour of paid sick leave for every 30 hours worked.

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Employers with 15 or more employees must allow up to 56 hours of paid sick leave annually, while those with fewer than 15 employees are required to provide up to 40 hours per year. Certain exemptions apply, including minors under 18 working less than 30 hours per week.

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Missouri: Paid Sick Leave Law Effective May 1, 2025

Missouri's Proposition A requires employers to provide paid sick leave (effective May 1, 2025). Employees accrue one hour of paid sick leave for every 30 hours worked.

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Employers with 15 or more employees may cap usage at 56 hours per year, while smaller employers may cap it at 40 hours. Employers must provide written notice of the policy to employees by April 15, 2025.

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Nebraska: Paid Sick Leave Law Effective October 1, 2025

Nebraska's Healthy Families and Workplaces Act mandates paid sick leave for most employees, effective October 1, 2025.

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Employees accrue one hour of paid sick leave for every 30 hours worked. Employers with 20 or more employees must provide up to 56 hours annually, while those with fewer than 20 employees are required to offer up to 40 hours.

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Connecticut: Expansion of Paid Sick Leave Effective January 1, 2025

Connecticut is expanding its paid sick leave law in phases:

• January 1, 2025: Applies to employers with 25 or more employees.
• January 1, 2026: Applies to employers with 11 or more employees.
• January 1, 2027: Applies to all employers, regardless of size.

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Employees accrue one hour of paid sick leave for every 30 hours worked, up to 40 hours annually. The law now covers a broader range of occupations and allows use for various health-related reasons.

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Michigan: Earned Sick Time Act Effective February 21, 2025

Michigan's Earned Sick Time Act, effective February 21, 2025, requires employers to provide paid sick leave to employees.

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Employees accrue one hour of paid sick leave for every 30 hours worked. Employers with more than 10 employees must allow up to 72 hours annually, while those with 10 or fewer employees are required to provide up to 40 hours.

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Employees can use sick leave for personal or family health needs, including issues related to domestic violence or sexual assault.

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Local Jurisdictions with Specific Requirements

In addition to state laws, various local jurisdictions have their paid sick leave and PTO requirements.

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For example, cities in California and Chicago have specific mandates that employers must follow. Stay informed about local regulations to ensure full compliance across all operating areas.

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Compliance Challenges for Multi-State Employers

Managing paid sick leave and PTO across multiple states in 2025 is a challenging task for employers. It requires a careful approach to ensure compliance and avoid potential penalties.

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Here are the top compliance challenges that multi-state employers face:

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Differences in Accrual Rates, Caps, and Carryover Policies

State laws differ in how employees accrue sick leave and PTO, the maximum amounts they can accumulate, and the rules for carrying over unused time:

• Accrual Rates: While many states mandate accrual at a rate of one hour per 30 hours worked, others have different standards. For example, Nevada requires PTO accrual at approximately 0.01923 hours per hour worked, totaling 40 hours annually.
• Caps and Carryover: Some states allow employees to carry over unused sick leave to the next year, subject to annual usage caps. New Mexico permits carryover of up to 64 hours, but employers aren't obligated to pay out unused balances upon separation.

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These discrepancies require tailored policies for each jurisdiction to ensure compliance.

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Differences in Employer Size Thresholds and Employee Eligibility

Eligibility requirements for providing paid sick leave often depend on the size of the employer and the nature of employment:

• Employer Size Thresholds: In Connecticut, the paid sick leave law is expanding to cover all employers by 2027, with a phased implementation based on employer size.
• Employee Eligibility: Some states exclude certain categories of workers. For instance, Nebraska's recent legislative changes exempt businesses with 10 or fewer employees and exclude younger teens and temporary agricultural workers from paid sick leave benefits.

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Such variations require employers to assess their obligations carefully in each state where they operate.

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Conflicts Between Company PTO Policies and State-Mandated Sick Leave Laws

Employers often implement unified PTO policies that combine vacation and sick leave. However, these policies can conflict with specific state mandates:

• Usage Restrictions: State laws may require that sick leave be available for use as it accrues, whereas company policies might impose waiting periods or require advance notice, leading to non-compliance.
• Payout Obligations: Some states mandate the payout of unused PTO upon termination, which may not align with company policies designed to minimize such liabilities.

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Employers must reconcile their internal policies with state requirements to avoid legal challenges.

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Administrative Complexities in Tracking and Managing Leave Across Multiple Jurisdictions

Managing diverse leave laws across various states introduces significant administrative burdens:

• Policy Management: Employers need to maintain and update multiple leave policies to comply with differing state laws, which can be resource-intensive.
• Training and Communication: HR personnel and managers must be informed about the specific leave laws applicable in their jurisdictions. Regular training and clear communication help prevent inadvertent non-compliance.

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Implement solid HR systems and processes to effectively manage these complexities.

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How to Ensure Compliance

Implementing targeted strategies (such as policy audits, maximizing technology, and providing comprehensive training) can streamline compliance efforts and support a compliant workplace culture.

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Here are tips to help you align your practices with the complex multi-state sick leave and PTO laws:

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Policy Review and Alignment

• Regularly review your PTO and sick leave policies to ensure they align with state-specific requirements. For instance, Illinois' Paid Leave for All Workers Act mandates that employees accrue one hour of paid leave for every 40 hours worked.
• While aligning with the strictest state laws, ensure your policies are consistent and easy to manage. This reduces administrative complexity and ensures fairness across your workforce.
• Regularly consult resources like the Employer State Compliance Roadmap to stay updated on state-specific leave requirements.

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Technology Integration

• Use platforms such as ADP, BambooHR, or Rippling, which offer features tailored for multi-state compliance, including automated leave tracking and real-time reporting. 
• Configure your HR software to reflect state-specific leave laws, including accrual rates, caps, and carryover policies.
• Ensure your leave management system integrates seamlessly with payroll to accurately calculate and process leave balances.

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Manager and HR Training

• Create comprehensive training sessions for HR personnel and managers to understand state-specific leave laws and their implications.
• Enroll HR staff in programs like the FMLA State Requirements Update: Compliance for 2025 to deepen their understanding of state-specific leave laws.
• Implement ongoing training sessions to keep HR personnel and managers updated on legislative changes and best practices.

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Employee Communication

• Ensure your employee handbook reflects current leave policies and state-specific requirements.
• Regularly communicate any changes in leave policies to employees through emails, intranet posts, or meetings.
• Make leave policies easily accessible to employees through your company's HR portal or employee self-service platform.

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Legal Consultation

• Consult with legal professionals specializing in employment law to manage complex multi-state compliance issues.
• Regularly have your leave policies reviewed by legal experts to ensure they comply with current laws and regulations.
• Work with legal consultants to anticipate and prepare for upcoming changes in leave laws that may affect your organization.

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Best Practices for Multi-State Leave Management

Effectively managing leave across multiple states in 2025 requires an approach that balances legal compliance, operational efficiency, and employee satisfaction. You can manage the complexities of multi-state leave laws by implementing the following best practices:

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Develop a Centralized Leave Management System

Businesses operating in multiple states must implement a centralized leave management system. Such systems allow HR departments to:

• Monitor accruals, balances, and usage in real time.
• Automate adherence to state-specific leave laws, including accrual rates and carryover policies.
• Simplify leave requests, approvals, and reporting through a unified platform.

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By centralizing leave data, you can reduce administrative burdens and minimize errors associated with manual tracking.

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Standardize Leave Request and Approval Processes

Establishing standardized procedures for leave requests and approvals ensures consistency and fairness across all locations. Important components include:

• Clear Guidelines: Define notice periods, required documentation, and approval hierarchies.
• Automated Workflows: Use leave management software to automate approval processes and notifications.
• Transparent Communication: Ensure employees are informed about policies and procedures through accessible channels.

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Standardization helps maintain operational continuity and supports compliance with different state laws. 

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Regularly Monitor Legislative Changes

State and local leave laws are subject to frequent changes. To stay compliant:

• Engage with legal services or use compliance management software that provides real-time updates on legislative changes.
• Periodically review and update leave policies to reflect new laws and regulations.
• Work with legal professionals to interpret complex regulations and ensure policies are aligned with current laws. 

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Implement a Universal PTO Policy

A universal PTO policy can simplify leave management across multiple states. Advantages include the following:

• Reduce complexity by consolidating various leave types into a single PTO bank.
• Allow employees to use time off as needed without distinguishing between sick leave, vacation, or personal days.
• In some cases, a universal PTO policy may help mitigate issues related to accrual caps and payout requirements.

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However, such a policy must comply with state-specific regulations, as some states have mandates regarding sick leave and PTO accruals.

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What are the Differences Between PTO and Sick Leave?

The image below illustrates the differences between PTO and sick leave:

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To choose the right policy, consider your workforce's needs and the jurisdictions in which you operate. A combined PTO policy offers flexibility but must be carefully structured to comply with all applicable sick leave laws.

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Alternatively, maintaining separate sick leave and vacation policies can ensure compliance but may be more complex to administer.

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Multi-state employers must stay informed about the specific requirements in each location to ensure policies meet or exceed local mandates.

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Simplify Multi-State Sick Leave and PTO Compliance in 2025 with Hirechore

Managing the challenges of multi-state sick leave and PTO laws can be tough for businesses that operate across various jurisdictions. With each state having its regulations, maintaining compliance requires attention to detail.

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Hirechore offers comprehensive solutions to streamline this process:

• Automated Compliance Tracking: Hirechore automates the monitoring of state-specific leave laws, ensuring your business remains compliant with the latest regulations. This includes tracking accrual rates, usage caps, and carryover policies across different states.
• Centralized Leave Management System: The platform consolidates all leave data into a single system, providing HR teams with a comprehensive overview. This system facilitates efficient leave tracking, approval workflows, and reporting, minimizing errors and ensuring timely compliance.

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Maximizing Hirechore's comprehensive HR and compliance solutions can help you manage the challenges of multi-state sick leave and PTO laws. This not only reduces legal risks but also enhances operational efficiency, thus allowing your HR team to focus on organizational growth. Learn more.

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FAQs

What are multi-state sick leave laws?

Multi-state sick leave laws are the different state-level regulations in the United States that govern how employers must provide paid or unpaid sick leave to their employees across different states.

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The features include the following:

• Each state (and sometimes even cities or counties) can set its rules regarding accrual rates, usage, carryover limits, eligibility, and documentation for sick leave.
• Some states legally mandate sick leave, while others leave it up to the employer.
• There is currently no federal law mandating paid sick leave for all employees, so compliance depends entirely on state and local laws.
• Businesses operating in multiple states must tailor their leave policies to meet the most generous law applicable in each jurisdiction or adopt a universal policy that meets or exceeds all relevant standards.

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How do you manage long-term sick leave?

Here’s how to manage long-term sick leave:

• Stay in touch with the employee supportively and respectfully.
• Outline procedures, documentation, and return-to-work expectations.
• Collaborate with the employees and medical professionals to monitor progress.
• Gradually reintegrate the employee with reduced hours or duties.
• Get expert guidance on fitness for work and adjustments.
• Understand employee rights to avoid discrimination or wrongful dismissal.
• Use temporary staff or redistribute tasks to maintain productivity.
• Communicate openly and acknowledge extra effort from others.
• Document all interactions and decisions for accountability and compliance.

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Can one PTO policy cover all state sick leave requirements?

Yes, one PTO policy can cover all state sick leave requirements, but only if it meets or exceeds the strictest provisions of each applicable state and local law.

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The PTO policy must:

• Provide at least the minimum accrual rate required by the most generous state or city.
• Allow employees to use PTO for sick leave–related reasons (e.g., illness, preventive care, caring for a family member, domestic violence recovery).
• Not impose stricter notice or documentation requirements than those allowed by any applicable jurisdiction.
• Include carryover and reinstatement provisions where legally mandated.
• Apply to all eligible employees, including part-time and temporary workers, where required.

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What are the penalties for non-compliance with state sick leave laws?

The penalties include the following:

• States may impose per-violation fines (e.g., up to $4,000 in California).
• Employers must compensate denied wages plus possible liquidated damages.
• Employees can sue; companies may face class actions and pay attorney fees.
• Violations can trigger audits by labor departments.
• Non-compliance can damage employer branding.

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