State sick-leave caps change crew labor burden because each rule sets its own hours, coverage, and leave-year period. Most estimators load paid sick time into hourly labor burden as one percentage and move on. That works when every crew works in one state. Once a crew crosses a state line, one flat rate can hide real differences in how many hours the law requires, who it covers, and when the leave year resets.
Key takeaways
- Load paid sick time for each crew and each state it works in, not as one blended rate.
- New Jersey's law covers hourly and piece-rate workers as well as salaried staff.
- Oregon's 40 hours is a protected floor; keep any extra PTO on its own labeled line.
- For California employers with an annual period that does not start on January 1, the cap changed to 40 hours or 5 days on January 1, 2024. Ask which option the company used.
This post walks through three state rules that show how far the caps can differ: New Jersey, Oregon, and California. The steps below take you from a crew roster to a documented burden line. Every rule, number, or date about a state comes from an official page, linked where it appears. Where a step gives a formula instead of a page's rule, the post says so. Check the current text of each page before you bid.
1. List every crew and every state where its hours fall
Start with a roster, not a rate. For each crew, write down the states where its hours will be worked, the number of hours each crew expects to log in each state during the job, and how each member is paid: hourly, by piece, or on salary.
The pay method matters more than it looks. Burden is usually loaded by trade or by crew, so a crew that splits its time between two states needs its hours split too. If you load one blended rate across a mixed crew, the New Jersey hours and the Oregon hours get the same treatment even when the rules differ.
Keep the roster in the same workbook as your labor rates so the state field travels with the hours. When a foreman moves a crew across a state line for a week, that change should show up in the burden line, not in a note nobody reads again.
Also note the employer's payroll state if it differs from the job state. Confirm which state's rule a given employer must apply to a given crew with your payroll or HR contact before you finalize the numbers. Write the answer down next to the roster row it affects.
2. Pull the sick leave rule for each state
Read the rule from the agency page itself. Each of the three states below uses different wording, and the wording decides what you load.
New Jersey. The New Jersey Department of Labor and Workforce Development says that employers of all sizes must provide full-time, part-time, and temporary employees with up to 40 hours of earned sick leave per year so they can care for themselves or a loved one. The same page says that this law applies to almost all workers in New Jersey, and that it applies no matter how you're paid: salaried, hourly, cash, or piece rate.
For a crew paid by the hour or by the piece, that last line is the important one. A burden model that loads sick time only on salaried staff misses hourly and piece-rate crew members in New Jersey.
The same page also says that you decide the time increments that employees can use their earned sick leave, such as 30 minutes, one hour, half a day, or a full day. The employer sets the increments, and the increments shape how many hours a single absence actually uses. Rounding an absence up to half-day blocks uses more hours than 30-minute blocks when the absence is shorter than a half day; when it fills whole half days, the two can use the same hours. So the estimate should follow the increment the company actually sets, not an assumed one.
Oregon. The Oregon Bureau of Labor and Industries explains that when an employer uses an equivalent plan (here, a PTO policy), the sick time law requires employers to provide protection for at least the first 40 hours in a leave year. The same page adds that nothing prevents employers from offering additional paid or unpaid time after an employee has exhausted their first 40 hours of protected time.
Read those two quotes together. The 40 hours is the protected floor under that arrangement. Any extra PTO a contractor grants is a company decision. Load the extra only if the company's written policy grants it.
California. The California Department of Industrial Relations FAQ covers employers whose annual period does not start on January 1. It says that if an employer uses an annual start date other than January 1 and implements a 12 month use cap, that cap must change to 40 hours or 5 days on January 1, 2024. It also says that the employer has the choice to frontload the two additional days on January 1, 2024 or move the measurement of the yearly period to January 1, 2024 and frontload five days.
That January 1, 2024 date has already passed. For a bid today, the working question is what cap the company currently applies, and whether its leave year was set up under one of the two options the FAQ describes. Ask the company which option it used, if any, and confirm the current text on the page before you finalize the number.
The FAQ quotes above are the parts that bear on a burden estimate, and they are narrow. Read the whole page, and save a copy of the text with the date you read it. If the page changes before the job closes, you will know which version your number came from.
3. Compare the three caps side by side
The table keeps only the facts the three pages state. Use it as a checklist that pairs each cap with its governing period.
Two things stand out. First, every row is tied to a period: a year in New Jersey, a leave year in Oregon, and an annual period in California. A cap without its period cannot be turned into hours for a specific job. Second, the Oregon figure is a floor for one arrangement, not a universal cap, and the California figure applies to a particular situation, a non-January 1 annual period with a 12-month use cap.
Those two qualifications are where estimates most often go wrong. Put them in the spreadsheet next to the number, not in a separate memo that gets lost.
4. Turn each cap into hours for each worker on the job
Now convert the cap into an hours figure. Plan on the page's figure for each covered worker over the job period. For California's 5-day option, use a planning formula, not a page rule: scheduled hours per day times 5.
Three habits keep this honest:
- Plan on the cap, then check it against reality. New Jersey's figure is an upper limit; Oregon's 40 hours is a floor that extra PTO can exceed. If the company has its own usage history, compare it with the cap and use the higher of the two for a conservative estimate. Write down which one you used.
- Prorate for partial periods. If a worker joins the job partway through a leave year, load only the share of the period that worker is on the payroll for this job. A full-year figure for a three-month assignment overstates the burden.
- Separate protected hours from optional hours. In Oregon, the protected floor and any extra PTO are different things. Carry them on different lines, and label the optional line so nobody mistakes it for a legal requirement.
The result of this step is a line for each worker in each state for the protected hours, plus a separate labeled line for optional PTO, each marked as a legal floor, a company policy, or a usage estimate.
The note matters when someone reviews the bid. A number labeled as a floor from a state page reads differently from a number that reflects the company's own generosity, and a reviewer who sees both merged into one line will assume the wrong one. Keeping the labels separate also makes it easy to remove the optional hours if the company changes its policy before the job starts.
5. Convert sick hours into a burden rate
Once you have hours for each worker, the math is simple. Multiply the sick hours by the worker's base wage to get the sick pay cost for that worker. Then divide that cost by the paid hours the worker logs in the period to get a cost for each paid hour. The result is a rate you can add to the labor line.
Illustrative example: one worker
This example uses made-up figures, not a state rule. A worker is paid 20 dollars an hour, the plan allows 1 sick hour in the job period, and the crew logs 20 paid hours in that period. Sick pay cost is 1 times 20, or 20 dollars. Cost for each paid hour is 20 divided by 20, or 1 dollar.
Run the same calculation for each state, using that state's hours and that state's wage if the rates differ. Do not compute one blended rate and apply it to every crew member. A blend hides the state-by-state difference you just documented.
Before you apply the rate, check with payroll how sick hours are paid in the payroll system. If the system pays them at a different rate than the base wage, for example through a separate pay code, use the rate the system actually pays. Your burden line should match the cost the company will record, not a cleaner number that exists only in the estimate.
Then multiply the rate by the paid hours each crew will log in each state, and add the result to that crew's labor line. Keep the state in the row label so the total for each state can be checked against the job plan.
Two cautions. This line covers paid sick time only. Payroll taxes and insurance on that pay belong in their own burden lines, and this post does not give those rates. For those lines, see employer payroll tax rules. Also, keep the result as a rate for each paid hour, not a lump sum, so the number moves correctly when the schedule changes.
6. Match the hours to the leave year and the reset date
Each source ties its cap to a period, and the timing of the cost depends on that period. Put the reset date in the estimate itself, not only the cap.
California's two options, described in step 2, can place the cost at different points in the job schedule. Confirm with the company how frontloaded hours are made available in practice. The estimate should show when the hours become available, not only how many there are in total.
A job that runs across a reset date can span two cap periods, each with its own cap. Split the hours at the reset date, and label each half with the period it belongs to. If you spread the cost evenly across the project, the first months and the last months may not match what the payroll system records.
Crews also move. A worker who starts the year on one job in one state and finishes on another job in a second state has hours that belong to two different sets of rules. Track those movements by pay period, not by the start date of the job, so the split follows the hours actually worked.
Finally, check whether the company's leave year starts on the same day as its payroll year. If the two differ, a monthly accrual schedule may not line up with a cap that resets on the leave-year date. Ask for the start date in writing and put it on the sheet. For building the schedule, see sick leave accrual rules.
7. Write down the source, the date, and the assumptions
Your burden sheet should carry, for each state line, the cap, the link to the official page, the date you read the page, and the planning assumptions you used. Record the assumptions a later reviewer is most likely to question: whether extra PTO is included, the time increment, the leave-year start date, and which California option the company chose, if any.
Recheck the pages before each bid that crosses a state line or a leave-year boundary. Agency pages get updated, and a rule that was right at one bid can be out of date at the next. The same goes for the company's own policy. When the PTO policy changes, the burden line changes with it, so tie the sheet to the policy version it was built from.
When you hand the sheet to a project manager or an owner's representative, send the cap table from step 3 with it, not only the burden rate. The table shows what the rate is based on, and it lets the next person check a changed number in minutes instead of rebuilding the analysis from the start.
Keep the numbers in this post as planning inputs. They show the shape of the rules: a cap, a period, a floor for one arrangement, and a set of options for another. Your job is to load the right version of each rule into the right crew, in the right state, for the right part of the year, and to show your work so the number can be defended later.
Next step today
Pick one crew from your roster, write down its states and pay method from step 1, and send that row to your payroll or HR contact with the question of which state's rule applies. For a wider set of checks, see sick leave burden checks.
Related guides: Arizona sick time: 5 numbers for labor burden.
Frequently asked questions
Do the caps cover hourly and piece-rate crews?
Yes, for New Jersey: the law applies no matter how you are paid. Load sick time for those crew members too, not only for salaried staff.
Is Oregon's 40 hours a cap?
No. It is a protected floor for an equivalent plan such as PTO, and employers may offer additional paid or unpaid time beyond it. Keep any optional hours on a separate, labeled line.
Does the California cap apply to every employer?
No. It covers employers with an annual start date other than January 1 that use a 12-month use cap.