Effective July 1, 2015, under the newly developed Healthy Workplaces, Healthy Families Act of 2014, all California must provide their California employees with at least 3 days (24 hours) of paid sick leave per year.
New California Paid Sick Leave Law
Where in the past the California Legislature had carved out exceptions for small employers, this law applies to all employees (exempt and non-exempt) who work in California 30 days or more in a year. The Act also includes temporary, party-time, and seasonal employees, and out-of-state employees who work in California 30 or more days in a calendar year.
The only employees not included under this Act are: 1) union-represented employees covered by a valid collective bargaining agreement if the agreement expressly provides for paid sick please, provides for final and binding arbitration of disputes concerning the application of paid sick day provisions, and meets other requirements; 2) employees in the construction industry covered by a valid collective bargaining agreement that meets certain requirements; 3) providers of in-home supportive services under California law; and 4) employees of an air carrier flight deck or cabin crew members who receive compensation time off equal to the amounts in the new statute.
The exact requirements of the new law are as follows:
- Use of Sick Leave: Employees are entitled to use accrued paid sick days beginning on the 90th day of employment. However, at its discretion, an employer may lend paid sick days to an employee in advance of accrual. Employers may limit the amount of sick leave used to 24 hours or 3 days per year. (The law permits employees to accrue more time than they could use in a year so that if the employee gets sick at the beginning of the year, the employee has some time available in his or her sick bank). Employers may also set a minimum increment not to exceed two hours for use of paid sick leave. The employee must provide reasonable advance notification, orally or in writing, of the need to use sick leave, if foreseeable. If the need to use sick leave is not foreseeable, the employee must provide notice as soon as practicable. The employer cannot condition the use of sick leave on the employee finding someone to cover his/her shift.
- Accrual Requirements: Sick days must be accrued at the rate of not less than one hour per every 30 hours worked, beginning at the commencement of employment or July 1, 2015, whichever is later. This equates to approximately 1.3 hours per week, or 5.3 hours per month, for employees who work 40 hours a week. This is however, subject to a permissible accrual cap discussed below. Exempt employees are deemed to work 40 hours per workweek, unless the employee’s normal workweek is less than 40 hours.
- Carry-Over and Cap On Accruals: Unused, accrued sick days must carry over to the next year, up to a permissible accrual cap of 48 hours, or 6 days. However, if employees are given the total amount of sick leave that may be used per year – 24 hours or 3 days – at the beginning of each year, no accrual or carry-over is required.
- Rate of Pay: Sick leave must be paid out at the employee’s hourly wage. If the employee is paid by commission or piece rate, or otherwise has a variable hourly wage, or is a non-exempt, salaried employee, then the rate of pay is calculated by dividing the employee’s total wages (not including overtime premium pay) by the employee’s total hours work in the fully pay periods in the prior 90 days of employment.
- Employers Who Already Have PTO Policies: An employer that already has a paid leave or paid time off (“PTO”) policy is not required to provide additional paid sick leave, provided that the employer makes available an amount of leave that may be used for the same purposes and under the same conditions as the new law, and the policy either: 1) satisfies the accrual, carry-over, and use requirements of the new law; or 2) provides at least 24 hours or 3 days of paid sick leave, or equivalent paid leave or PTO, for employee use at the beginning of each year of employment or calendar year. Employers who already have a PTO policy still must comply with the posting, record-keeping, and other requirements of the new law. Also, employers who combine vacation and sick leave into undifferentiated PTO must continue to pay out all of the PTO upon termination.
- Purpose of Sick Leave: Sick leave may be used for the diagnosis, care, or treatment of an existing health condition of, or preventive care for, an employee or an employee’s family member. The definition of “family member” is broad and includes, for instance, parents-in-law, grandparents, grandchildren, and siblings, among other persons. Sick leave may also be used for victims of domestic violence, sexual assault, or stalking.
- No pay-out for accrued sick leave upon termination: Unlike vacation time, employers are not required to provide compensation to an employee for accrued, unused paid sick days upon separation of employment. A caveat is that if an employee separates from an employer and is rehired within one year, previously unused sick days must be reinstated.
- Notice and Posting Requirements: Employers must provide employees with a written notice that sets forth the amount of paid sick leave available (or PTO provided in lieu of sick leave) on either the employee’s itemized wage statement, or in a separate writing provided on payday. Employers must also display in a conspicuous place a poster telling employees about their rights under the new law, and provide the employees with written notice of the substantive provisions of the new law at the time of hiring. Both the poster, and a template with the new hire information, will be drafted and made available by the Labor Commissioner.
- Record-keeping Requirement: Employers must keep for at least three years records documenting the hours worked and paid sick days accrued and used by each employee, and make such records available for employee inspection, if requested.
- No Discrimination of Retaliation: Employers may not deny an employee the right to use accrued sick days, discharge, and threaten to discharge, demote, suspend, or in any manner take adverse of discriminatory action against an employee for using or attempting to use accrued sick days. There is a presumption of unlawful retaliation, albeit a rebuttable presumption, that if an employer takes an adverse employment action within 30 days of the employee: 1) filing a complaint with the Labor Commissioner or in court alleging violations of the new law; 2) cooperating with an investigation or prosecution of an alleged violation of the new law; or 3) opposing a policy, practice or act that is prohibited by the new law.
If you are an employer and have questions regarding this new law, please contact our Employment Lawyer, Jarin A. Beck, Esq. of Beck Law P.C. to discuss what steps you should take to protect your company. You can reach Jarin A. Beck at (707) 576-7175, or by e-mail at jarin@becklaw.net.