Price sick leave into labor burden by calculating accrued hours, checking caps and paid-leave thresholds, then applying wages and expected use.
Key takeaways
- Collect hours worked, base wages and Oregon headcount before calculating leave.
- Check state limits and eligibility before pricing the allowance.
- Keep expected use separate from accrual in your spreadsheet.
- Show sick leave on its own line in the loaded rate.
You pay for hours nobody spent on the job, and the state rules decide how many of those hours each worker builds up. Many estimators handle this with a flat percentage added to every rate and move on. That works until a crew in one of these states costs more than the bid assumed, and the cause is usually a rule that was misread, not a bad percentage.
This post walks through the three rules in the order you would apply them on a bid. It assumes you already have a base wage for each classification and a loaded rate built from payroll taxes, insurance and other burden. Sick leave is one line in that build-up, but it needs its own calculation because each state measures accrual differently. Washington counts hours worked and adds a waiting period before the leave can be used. New Jersey counts hours worked with an annual cap. Oregon counts hours worked with a cap, and whether the leave is paid at all depends on the employer's headcount.
The rules below come from the state agency pages linked in each step. Read those pages before you bid, because agencies revise their guidance and a blog post cannot keep up with those changes.
To keep the math concrete, this post uses one hypothetical worker: a journeyman on a base wage taken from your own rate sheet, working a full year of paid hours. Swap in your own figures when you build the real rate. The ratios in each rule stay the same from job to job, but the dollar results do not.
1. Sort each crew by state and collect the inputs
Start with a list of every crew, classification and worker, and tag each one with the state where the work is performed. Do not assume the company's home state controls. If a crew based in one state works a job across the line, ask your payroll or legal adviser which state's rules govern those hours. State agency guidance does not settle that question on its own.
For each worker, collect three inputs. The first is expected hours worked for the year, including overtime. The Washington, New Jersey and Oregon rules all accrue sick leave on hours worked, but additional hours do not increase the New Jersey or Oregon allowance once the applicable cap is reached. The second is the classification's base wage, which you already have from your rate sheet. The third is the number of employees the company has in Oregon and whether it has a location in Portland. You need that headcount only if you bid Oregon work, and many estimators do not have it on hand. Get it from HR or payroll before you finalize an Oregon bid, because the threshold changes whether the leave is paid.
Keep one spreadsheet row for each worker. Columns for state, expected hours, base wage and the Oregon headcount flag will let you run the same calculation on every crew without retyping anything. For related scheduling inputs, see construction overtime cost.
2. Washington: one hour for every 40 hours worked, with a 90-day wait
The Washington Department of Labor & Industries sets the accrual rate in plain terms: "You must earn at least one hour of paid sick leave for every 40 hours you work." The same agency page confirms the baseline obligation: "Employers in Washington State are required to provide paid sick leave to their employees." For a bid, that means every Washington worker in your rate sheet builds sick leave, and the allowance belongs in the rate for each worker.
The second Washington rule affects timing more than cost. The same page says: "You may begin using earned paid sick leave 90 calendar days after your first day of work with your employer." A worker cannot use earned leave until the waiting period has passed. For a short job with a crew that turns over quickly, some workers may leave before they can use any of the leave they built up. That lowers the expected cost of the sick leave allowance for those workers, but only if you can show from your own records that the turnover pattern is real. Do not assume it on a long job.
Here is the Washington math. At one hour for every 40 hours worked, the leave a worker builds is a fixed fraction of hours worked. Multiply that fraction by the base wage to get the cost for each hour worked if every hour of leave were used. Before applying the formula, check the full Washington page for any annual limit on use and adjust the Washington line if one applies.
Note the difference between accrual and use. The rate above is what the worker builds, and it sets the ceiling for the allowance. The actual cost depends on how much of that leave your crews take. Step 5 covers how to set that share.
3. New Jersey: one hour for every 30 hours worked, with a benefit-year cap
The New Jersey Department of Labor and Workforce Development states the accrual rate this way: "Earn one hour of earned sick leave for every 30 hours you work." The agency's page includes a worked example: "For example: Work 40 hours/week and earn 5.33 hours of sick leave in 4 weeks." Use that example as a check on your own arithmetic before you rely on the formula in a spreadsheet.
The cap is the rule that catches estimators. The same page sets the required maximum at 40 hours of leave in each benefit year. A flat accrual calculation overstates the required allowance once a worker's accrual would pass the cap, which happens for workers with many hours worked in a benefit year. Multiply that capped figure by the base wage and divide by paid hours to get the cost for each paid hour.
A part-time worker below the cap works differently. That worker's uncapped accrual is a larger share of hours worked than a full-time worker's capped accrual. That is why the cap has to be checked against each worker's hours and not applied as a single company-wide number.
Whether unused leave carries over, pays out or resets is outside what this post covers, so check the full New Jersey page before you assume how a worker's balance will look at the end of a benefit year.
4. Oregon: accrual, annual cap and paid-leave headcount
The Oregon Bureau of Labor and Industries sets the accrual rate and the annual cap in one sentence: "Employees earn at least 1 hour of protected sick time for every 30 hours of work, up to 40 hours per year." The rate matches New Jersey, and the cap matches too. The difference is the second question the estimator has to answer: whether the employer must pay for the leave at all.
The Oregon page ties the pay obligation to headcount. It says: "Protected sick leave is also paid time when an employer has 10 or more Oregon employees (six or more if they have a location in Portland)." For an estimator, that means the Oregon allowance has two branches. If the company meets the threshold, the leave is accrued, protected and paid, so the cost goes in the rate. If the company falls below the threshold, the page ties the paid obligation to the headcount, so the allowance may be zero for those workers. Confirm the below-threshold treatment on the full page before you set a zero line, because a bid built on that assumption is hard to defend later.
Check the company's actual locations and not only its total head count.
Because the cost depends on headcount, do not let a single Oregon rate sit unchanged across a multi-year bid. If the company's Oregon headcount sits near 10, or near 6 for a Portland location, rerun the calculation when the headcount changes.
5. Turn each rule into a percentage of paid hours
Once you have each state's rule, convert it into a cost for each paid hour. The conversion has three parts: the accrual, the cap and the expected use.
First, compute accrued hours for each worker. For Washington, divide hours worked by 40, subject to the source check in step 2. For New Jersey and Oregon, divide hours worked by 30, then take the lower of that result and 40 for the applicable period. Use the Oregon result only if the company meets the paid threshold in step 4.
Second, multiply the accrued hours by the base wage to get the value of the leave if every hour were used. Then divide by paid hours to get the cost for each paid hour.
Third, apply an expected use share. The state rules set how much leave a worker builds, but they do not tell you how much of it your crews will take. Use your own records of sick time taken on similar work. If you have no records, budget the full accrual, which gives the highest allowance and the most conservative bid. Be explicit about which choice you made, so the number can be checked later.
Oregon below the threshold is zero in this model, subject to the step 4 check. Multiply the full-use results by your expected use share if you have one. A share of half, for example, halves each result. Keep the use share as its own input in the spreadsheet so you can change it without rebuilding the sheet.
Watch the part-time case. The cap changes the answer for full-time crews, but a part-time worker below the cap carries a higher share of the cost for each paid hour in New Jersey and Oregon than a full-time worker does. The rate can therefore run higher for part-time crews. Run the calculation by worker or by crew class rather than by state, and avoid averaging the cap across a mixed crew.
Illustrative example: a short accrual calculation
Using illustrative inputs, a worker has 30 hours worked and a base wage of 20 dollars. In New Jersey, those hours earn 1 hour of leave, below the cap. At full use, that leave costs 20 dollars. Divide the leave cost by the paid hours used in the rate sheet to find the hourly allowance; keep that denominator separate from hours worked.
6. Add the sick leave line to the loaded hourly rate
Put sick leave on its own line in the burden build-up. Do not hide it inside a general benefits percentage. The reason is practical: each of these three states has its own rule, and a separate line lets you change one state's number when a rule changes without reopening the whole rate.
Start from the base wage for the classification. For a Washington worker, add the sick leave line, calculated at full use, as its own line beneath the base. Show those as two lines in the rate sheet, so the reader can see which part of the rate comes from the state rule. Other burden lines, such as payroll taxes, insurance and vacation or holiday pay, go in their own lines as well.
Apply payroll taxes to the sick leave allowance if your burden method applies them to wages paid. Sick pay is paid wages, so it may carry the same employer taxes as regular wages, but the exact treatment depends on your tax setup and how your payroll system records the leave. Confirm that with your payroll provider rather than assuming it. Review employer payroll tax rules alongside that check.
Label each rate by state. A crew that works in Washington and one that works in Oregon may share a classification and a base wage, yet the sick leave line will differ. A single blended rate hides that difference and makes it hard to see which crew is driving the number. Keep one rate for each state and classification, and note the headcount assumption on the Oregon rate so it can be reviewed when the company's Oregon headcount changes.
7. Test the rate against real hours and the source pages
Run the finished calculation against a real schedule before you submit the bid. Pick one worker from each state and classification, use their actual scheduled hours for the job, and check the output against the hand math in steps 2 through 4. If the two disagree, the spreadsheet formula is most likely the problem. Check the divisor, the cap and the headcount test first.
Then check each rule against its source. Confirm the accrual divisor, the cap, the waiting period and the Oregon headcount threshold on the linked pages. Write down the page address and the day you looked at it in the bid file, next to the rate. If a reviewer asks where a number came from, you can point to the page and the day you checked it, instead of relying on memory or someone else's notes.
Last, flag the cases that are most likely to change during the job. A Washington worker hired for a short job may not reach the waiting period, which lowers the realistic cost but only if the job length is firm. An Oregon company near the headcount line may cross it or drop below it mid-job. A New Jersey worker with a heavy overtime schedule may hit the 40-hour cap early in the year. Note each of these as a condition on the bid, so the cost is tracked when it changes rather than found at year-end.
With the rules sorted, the calculation takes a few minutes for each crew. The harder part is keeping the inputs current, so put a review date on each state's rate and recheck the source page on that date.
Today, pick one worker and calculate the sick leave line by hand, then compare it with the rate sheet before changing other crew rates.
How should you check the sick leave line?
Should you use hours worked or paid hours?
Use hours worked to calculate accrual and paid hours as the denominator when calculating the allowance for each paid hour.
What if you have no sick leave use records?
Budget full use of the calculated allowance, subject to the applicable limits, and record that assumption beside the rate.
Related guides: Arizona sick time: 5 numbers for labor burden · Employer FICA rates to add to labor burden: 2 figures · Sick leave burden: 3 checks before pricing crew hours.