At ten employees, unpaid sick leave becomes paid
Philadelphia’s Promoting Healthy Families and Workplaces Ordinance has been in force since 2015, and it applies to every employer with people working in the city — including the four-person company that assumes it is too small to be covered.
Size determines whether the leave is paid. It does not determine whether you owe it.
| Employees | Obligation |
|---|---|
| Fewer than 10 | Up to 40 hours of unpaid sick leave a year |
| 10 or more | Up to 40 hours of paid sick leave a year |
Crossing from nine employees to ten converts an unpaid entitlement into a paid one. Nothing arrives in the post to tell you.
How accrual works
One hour for every 40 hours worked, overtime included. Exempt employees are treated as working a 40-hour week or their normal workweek, whichever is less.
Accrual starts on day one. Not after probation, not after 90 days.
Use can be delayed to day 90. This is the distinction that gets missed: you may require a 90-day waiting period before an employee uses accrued time, but they accrue from their first hour regardless. Someone who leaves at day 80 accrued leave they never got to use — which is correct under the ordinance, but only if your system was accruing it.
Carryover is unlimited. Unused time rolls over year to year. What you may cap is annual usage at 40 hours. Those are different limits and conflating them is a common error.
The chain business rule
This one catches franchises and multi-location operators.
An employer with fewer than ten employees is normally in the unpaid tier. But a chain business — defined as establishments trading under the same name in 15 or more locations, wherever those locations are — is subject to the paid requirement even with fewer than ten employees inside Philadelphia.
So a six-person Philadelphia location of a twenty-location brand owes paid sick leave. The headcount test that applies to everyone else does not apply to you.
Who is not covered
The ordinance excludes independent contractors, seasonal employees, employees hired for terms shorter than six months, interns, adjunct professors, pool employees in healthcare, state and federal employees, and employees covered by a bona fide collective bargaining agreement.
Note that some excluded categories still count toward your employee total even though they are not themselves entitled. Worth getting right before you conclude you are under ten.
What it can be used for
Broader than “I have a cold”:
- Diagnosis, care or treatment of a physical or mental health condition, for the employee or a family member
- Preventive care
- Absences related to domestic violence, sexual assault or stalking
Notice, documentation and records
The employee gives notice. Where the need is foreseeable — a scheduled appointment — they must give notice and make a reasonable effort to schedule it without disrupting operations. “Reasonable effort” is undefined in the ordinance, which is a genuine ambiguity.
They are not required to find cover. You cannot condition leave on an employee arranging their own replacement.
Documentation only after two consecutive days. For absences longer than that, you may require reasonable documentation — a health care provider’s note, a police report, or similar.
You must notify employees of their rights. In the handbook, and posted where other notices are posted. The City publishes a poster in multiple languages. Remote workers need electronic access.
Keep records for two years, covering both accrual and use. If a complaint is filed, the records are the case.
Where companies go wrong
Assuming a generous PTO policy covers it. It might, but only if it meets the ordinance on every term — accrual rate, permitted uses, carryover, documentation limits, and the absence of any requirement to find cover. Most standard PTO policies fail on at least one.
Starting accrual after probation. Accrual begins at hire. Only usage can be deferred.
Capping carryover. You can cap use. You cannot cap rollover.
Forgetting the poster. Cheap to fix, and a clean finding against you if it is missing.
If you employ people in more than one city
Philadelphia’s ordinance is one of many, and they do not align — different accrual rates, different caps, different definitions of a family member. Pittsburgh’s rules differ from Philadelphia’s within the same state.
The approach that works is a single policy written to satisfy the most generous requirement on each individual term, rather than a stack of parallel policies your managers have to choose between. That is what we build in leave management, and how it interacts with FMLA and state leave is covered there too.
This is general information, not legal advice. The ordinance is enforced by the Philadelphia Department of Labor, and specific situations should be reviewed with employment counsel.