Philadelphia Paid Sick Leave: What Small Employers Have to Do

Who is covered

Philadelphia’s paid sick leave law is called the Promoting Healthy Families and Workplaces ordinance. It lives in Chapter 9-4100 of the Philadelphia Code. It covers workers based on where they work, not where they live.

The test is simple. An employee is covered if they work 40 or more hours in a calendar year inside Philadelphia city limits. That is the only hours test. There is no separate full-time requirement.

That means part-time workers count. A person who lives in Montgomery County and comes into your Center City office one day a week counts, because one day a week adds up to far more than 40 hours a year.

The law does leave out some workers. Excluded groups include seasonal workers hired for 16 weeks or less in a calendar year, employees hired for a term of less than 6 months, independent contractors, adjunct professors, students working for their own school, on-call health care pool employees, government employees, and non-probationary employees covered by a union contract.

The location of your headquarters does not matter. If your company sits in King of Prussia but one salesperson spends 40 or more hours a year working at client sites in the city, that salesperson is covered for the hours worked in Philadelphia.

Paid or unpaid: the 10-employee line

Every covered employer has to provide sick time. The question is whether you pay for it.

If you have 10 or more employees, the sick time is paid. If you have fewer than 10, the time is unpaid, but the employee still has the legal right to take it and you cannot punish them for using it.

There is one exception. A chain establishment, meaning a location that does business under a trade name used by 15 or more locations anywhere, must provide paid sick time no matter how many employees it has. This is true no matter who owns each location.

How you count to 10 matters, and the counting rules are not the same across every Philadelphia ordinance. Do not assume the headcount you use for another City rule applies here. Section 9-4103(5) of the code says an employer that employs fewer than 10 employees for at least 40 weeks in a calendar year does not have to provide paid sick time. It must still provide unpaid, job-protected time. For this count, the code includes everyone working for you for pay in a given week, whether full time, part time, or temporary. The City’s 2016 regulations count only employees who work 40 or more hours a year in the city, and updated regulations proposed in 2026 are not final.

If you are close to the line, treat this as a live question. Because of the 40-week test, the answer turns on the calendar year, not on the day you hire your tenth person. Track your headcount week by week, and ask your advisor to check your count before you decide which side of the line you fall on.

Accrual, cap, waiting period, carryover, and no payout at separation

The accrual rule is the same for paid and unpaid leave. Employees earn 1 hour of sick time for every 40 hours they work in Philadelphia. Accrual stops at 40 hours in a year.

Philadelphia Code section 9-4104 is the section that sets out accrual. Your payroll or time system should be able to compute this from hours worked. If your system cannot tag hours by work location, you will need to track city hours separately.

New employees can begin using accrued time on the 90th calendar day after they start. They earn time from the start; they simply cannot use it during that first window.

Unused time carries over into the next calendar year. The one exception: if you give employees at least 40 hours of sick time at the start of each calendar year, you do not have to carry over unused time. Either way, the law does not require you to let an employee use more than 40 hours of sick time in a calendar year. Section 9-4104(6) of the code sets these rules.

You do not have to pay out unused sick time when an employee leaves. Section 9-4104(9) of the code says so. Sick time under this ordinance is a protected benefit while employed, not a wage owed at separation. Your handbook can say so plainly.

What counts as a qualifying use

Employees can use sick time for their own illness, injury, or medical care. They can also use it to care for a family member who is ill, injured, or needs medical care. Preventive care, such as a checkup, counts.

The ordinance also covers what is often called safe time. That means time off connected to domestic violence, sexual assault, or stalking, whether for the employee or a family member. Uses in this category can include medical attention, counseling, relocation, legal help, or help from a victim services organization.

You may ask for reasonable documentation only when sick time lasts more than 2 consecutive days. Keep the request reasonable and consistent. Section 9-4105(5) of the code lists what counts as reasonable documentation, and it is the place to start before you write a documentation policy.

What changed under the POWER Act

In 2025, City Council passed the Protect Our Workers, Enforce Rights Act, called the POWER Act. The Mayor signed it on May 27, 2025 and it took effect immediately. It amended several worker protection laws at once, including paid sick leave. Our POWER Act explainer covers the full law.

For sick leave, four changes matter most.

First, records. You used to have to keep sick leave records for two years. You now have to keep them for three.

Second, a presumption. If the City asks for your records and you cannot produce adequate records within 30 days (or any extension the City grants), the law presumes you violated the ordinance. The burden shifts to you. The sick leave law already had a version of this rule. The POWER Act added the 30-day deadline.

Third, tipped workers. The paid sick leave rate for tipped workers is now tied to the tipped rate used under the City’s Fair Workweek law. If you run a restaurant, bar, or salon with tipped staff, your sick pay rate is no longer just the base hourly wage.

Fourth, two groups gained leave rights. Probationary employees covered by a union contract now earn sick time under this law. And under the City’s separate domestic worker law, you must now give domestic workers paid leave time, without waiting for a City portable benefits system. If you employ a nanny, house cleaner, or privately paid home aide in the city, this applies to you.

The City’s Office of Worker Protections published an employer memo on August 19, 2025 summarizing these changes. Read it alongside the ordinance.

Recordkeeping and the posting requirement

Keep three years of records for every covered employee. At a minimum, that means hours worked with dates, sick time accrued, sick time used, and sick time paid. The POWER Act treats missing or inconsistent records as evidence against you, so this is not paperwork you can rebuild later.

Your payroll system probably stores most of this already. The gap is usually the location tag. If you have employees who split time between the city and the suburbs, make sure the record shows which hours were worked in Philadelphia.

You must also post the City’s paid sick leave notice where employees can see it. The current notice is available on the City’s paid sick leave page. If your team is remote or spread across sites, post it in each physical workplace and distribute it electronically as well.

The Office of Worker Protections also publishes separate posters for the City’s other worker protection laws, such as the wage theft law. Under the POWER Act, you must give notice of each one that covers your workers.

Common mistakes

Counting only city residents. The test is where the work happens, not where the employee sleeps. A Delaware County resident who commutes into the city is covered. A Philadelphia resident who works entirely at your Conshohocken office is not covered by this ordinance for those hours.

Forgetting remote and hybrid workers who come in occasionally. An employee who works from home in Bucks County but comes to your Philadelphia office twice a month will cross 40 hours in the city within a few months. Track those days.

Assuming fewer than 10 employees means no obligation. Small employers still have to allow the time, protect the job, keep records, and post the notice. The only difference is pay.

Using the wrong headcount definition. As noted above, each Philadelphia ordinance counts employees its own way. Ogletree’s overview of Philadelphia ordinances is a good reminder that the same company can be on different sides of the line for different rules.

Keeping only two years of records. The retention period is now three years. If your document retention policy still says two, update it.

Paying tipped staff sick time at the base wage. Under the POWER Act, the sick leave rate for tipped workers is tied to the Fair Workweek tipped rate. Check your payroll setup for tipped employees.

Denying safe time because it does not look like illness. Time off related to domestic violence, sexual assault, or stalking is a qualifying use. Train whoever approves time off so they recognize it.

Checklist

Use this list to check your setup. For every other Philadelphia rule that turns on headcount, see the Philadelphia employer checklist.