State Sick Pay Laws in 2026: Mid-Year Compliance Review for Payroll & HR

Overview:

State and local sick pay requirements continue to create compliance pressure for employers in 2026, especially as more organizations manage employees across multiple states, cities, worksites, and remote or hybrid arrangements. Paid sick leave rules can affect accrual, carryover, usage limits, eligibility, notice requirements, existing PTO policies, payroll tracking, and recordkeeping. A policy that appears simple at the company level may become difficult to administer once state and city requirements are applied employee by employee.

The challenge becomes even more complicated when sick pay connects with third-party providers, disability plans, tax withholding, and year-end reporting. Payroll and HR teams need to understand who is responsible for withholding and reporting, how third-party sick pay should be handled, how W-2 reporting applies, and how state disability programs may affect both the employee and the employer. These issues are especially important during a mid-year review because mistakes in setup, withholding, reporting, or provider coordination can become harder to correct later in the year.

This webinar will provide a mid-year review of current and pending state and city sick pay requirements, including sick leave accrual obligations employers may need to provide. The session will also review third-party sick pay arrangements, W-2 reporting requirements, tax withholding and reporting responsibilities, waiting periods before disability benefits begin, and state disability plan considerations, including how these plans are funded and how claims may affect employers.

Areas Covered:

• Review different types of ways companies can choose to handle third party sick pay with their providers.
• State and City review of current legislation of sick accruals that must be provided to employees.
• W-2 reporting requirements for third party sick pay.
• What tax should be withheld and reported and by whom?
• How to handle waiting periods before disability starts
• State Disability plan review from tax that funds them to how the claims affect employers.

Handouts Including:

• Mid-Year State & City Sick Pay Compliance Review Checklist
• Sick Pay Compliance Scenarios: PTO, Remote Workers, Third-Party Sick Pay, and Disability Claims

Why should you attend?

Sick pay compliance has become harder to manage because employers are dealing with different state and city rules, changing accrual requirements, local ordinances, PTO policy questions, and payroll tracking responsibilities. A policy that works in one location may create problems in another, especially when employees work across multiple states or cities.

Payroll and HR teams also need to understand how sick pay is handled when a third-party provider is involved. Withholding, reporting responsibility, W-2 treatment, waiting periods, disability plans, and state disability fund rules can create confusion if the employer and provider are not aligned.

This webinar will help attendees review the sick pay issues that matter during a mid-year compliance check. Participants will gain a clearer understanding of current and pending state and city requirements, third-party sick pay handling, tax withholding and reporting responsibilities, W-2 reporting, and state disability plan considerations so they can identify gaps before year-end reporting and compliance problems arise.

Who will benefit?

This webinar is designed for professionals responsible for sick pay compliance, payroll tax reporting, leave administration, third-party sick pay coordination, and state disability plan handling. It will be especially useful for those who manage payroll, HR, benefits, compliance, or reporting obligations across one or more states; those include:

• Payroll Managers/Payroll Directors
• Payroll Administrators/Payroll Tax Managers
• Payroll Tax Specialists/HR Managers
• HR Directors/Benefits Managers
• Benefits Administrators/Leave of Absence Administrators
• HR Compliance Managers/Compensation and Benefits Professionals
• Payroll Compliance Specialists/Total Rewards Managers
• Finance Managers Involved in Payroll/Accounting Managers Involved in Payroll
• Controllers/CFOs of Small and Mid-Sized Employers
• Business Owners with Multi-State Employees/Office Managers Handling Payroll and HR
• Third-Party Payroll Provider Representatives
• PEO and HR Outsourcing Professionals/Employment Tax Consultants
• CPA Advisors Supporting Employer Payroll Compliance