Under what conditions is an employer required to accrue a lability for sick pay? Under what conditions is an employer permitted but not required to accrue a liability for sick pay?

Liability is a binding debt that is ought to be paid to another business. These are undergone so as to fund the day-to-day activities of a business.

Employer must accrue a liability for the non-availability if certain criteria are met:

• Employer’s liability to provide payment for future leave is obtained from the past services provided by them.

• Employees’ rights to paid leaves either vest or accumulate.

• Employer’s payment of the remuneration is predictable.

• Employer can logically estimate the value of its debt.

Conditions under which an employer is allowed but are not needed to accrue a liability for sick pay. These are:

• If sick pay advantages are disbursed after completion, accrual is needed.

• If sick pay advantages can be carried forward but do not vest, accrual is allowed but not essential.