July Ushers in New Paid Sick Leave Requirements for California Employers

By Jennifer A. Grady, Esq. and Gayane Khechoomian, Esq.

sick leaveOn July 1, 2015, a new law affecting millions of Californians went into effect requiring that employers – both public and private – provide paid sick leave to all their employees. Under the new law, employers will have to modify or update existing paid sick leave or time off policies, as well as payroll, recordkeeping, and employee notice procedures.

The “Healthy, Workplace, Healthy Families Act” (AB-1522) signed into effect by Governor Edmund G. Brown Jr. applies to all employees who work in California for thirty (30) or more days in a year. The law defines “employer” as any person employing another under any appointment or contract of hire” regardless of how many (or few) employees they have, and covers employees whether they are full-time, part-time, seasonal, or temporary. Specifically, the new provision provides that employees who work thirty (30) or more days within a year from commencement of their employment will earn a minimum of one hour of paid sick leave for every thirty (30) hours worked.

Employees become entitled to their sick leave beginning on the ninetieth (90th) date of employment. However, an employer may limit an employee’s use of paid sick days to 24 hours—or three (3) days—in each year of employment, which results in no carryover requirements. Click HERE for the full text of the new law.

New posting, notice, and recordkeeping requirements

A new poster detailing paid sick leave will be prepared by the California Labor Commissioner that employers are required to post at the workplace. In addition, the Wage Theft Prevention Act’s New Hire Notice is amended to include information about paid sick leave.  Employers will also be required to provide written notice of the amount of paid sick leave or PTO available to the employee each pay day – a requirement that can be satisfied by including the accrued hours on employees’ itemized wage statements. Records documenting the hours worked and paid sick days accrued and used by an employee must be kept for at least three years, and made available to employees upon request, pursuant to the California Labor Code.

Some of the key provisions of the law include: 

  • Employers may provide paid leave by either accrual under the new law, or by granting paid sick days in advance.  An employer that already has a Paid Time Off (PTO) policy in place that provides leave for the same purposes, and under the same conditions as specified in the law, is not required to provide additional paid sick days.
  • Paid sick leave accrues and carries over to the following year, but employers may cap the sick leave to forty-eight (48) hours, or (6) days in that year. Additionally, no carryover leave is required if employers provide twenty-four (24) hours or three (3) days of paid sick leave up front in the beginning of the year. With one important exception, accrued sick leave carries over to the following year of employment.
  • Unused and accrued sick leave does not get cashed out at termination. However, a terminated employee who is rehired within one year is entitled to reinstatement of their sick leave for immediate use.
  • Employers with existing PTO policies that combine vacation and paid sick leave are required to pay out accrued, unused PTO at termination of employment.
  • Employers may set a “reasonable” minimum increment for sick leave as long as it does not exceed two (2) hours.
  • Employers must pay out sick leave pay no later than the payday for the next regular payroll period, and it must be paid at the employee’s regular hourly wage.
  • Certain types of “employees” are exempt from the law, as determined in California Labor Code § 245.5. An employee who is exempt from overtime requirements as an administrative, executive, or professional employee under a wage order of the Industrial Welfare Commission is deemed to work 40 hours per workweek for the purposes of this section, unless the employee’s normal workweek is less than 40 hours, in which case the employee shall accrue paid sick days based upon that normal workweek.
  • The law does not amend California’s kincare law, which requires that an employer permit employees to use half of any paid leave each year that they may use for their own illness to care for a family member. For example, an employer that provides 6 days of sick leave to employees, must still allow employees to use half of those days (3) to care for certain family members. The family members under the kin care law are different from those under the Healthy Workplaces, Healthy Families Act of 2014.

The reasoning behind the Healthy Workplaces, Healthy Families Act of 2014

The public policy rationale behind this new law is to ensure that California’s workers are able to address their health needs by taking paid time off for sick leave, and as a result, this early treatment and prevention should have the effect of decreasing health care costs statewide. Employee sick days may be used for “diagnosis, care, or treatment of an existing health condition of, or preventive care for, an employee or an employee’s family member,” including children, parents, spouses, domestic partners, siblings, grandchildren and grandparents; they may also be used for an employee who is a victim of domestic violence, sexual assault or stalking to obtain relief, including medical attention and psychological counseling. The law also provides that employers are prohibited from discriminating or retaliating against an employee who requests paid sick days and prohibits an employer from denying the right to use available sick leave.  Adverse action taken within thirty (30) days of a request may be deemed retaliation, subjecting the employer to liability

Ambiguities and consequences of non-compliance 

Employers should probably treat the 24 hours, or three (3) days of paid sick time requirement as protected and given up front at the beginning of the year. Even if an employee works less than 8 hours a day, employer should provide the full 24 hours of paid sick time. Unfortunately, the law leaves several questions unanswered, including whether or not an employer may require a doctor’s note, or other proof required in order to prove that the time off was taken for a qualified reason, thus warranting pay.

Another issue is that while the law is silent on the matter of overtime, these hours will likely count towards paid sick days. Despite the ambiguities in the legislation, it is clear is that employers may not deny their employees the right to use available sick leave. Because the law went into effect on July 1, 2015, employers should update their employment policies as soon as possible in order to avoid penalties, lawsuits, and other remedies that may be brEmployeeHandbook_Pop_6467ought under the new law.

The law provides the Labor Commissioner authority to impose specified administrative fines for violations. It also authorizes the commissioner or the Attorney General to recover specified civil penalties, as well as attorney’s fees, costs, and interest, against an offender who violates these provisions on behalf of the aggrieved.

To ensure that your business remains compliant with this new law, consult a licensed California employment attorney. Employee Handbooks should be updated annually in order to keep up with the changes in California employment law.

To schedule a complimentary 15-minute consultation with The Grady Firm’s employment attorneys, call (323) 450-9010, or fill out a Contact Request Form.  The Grady Firm attorneys can update your business’ company policies/Employee Handbook, create new policies, prepare employment forms, and explain the detailed nuances of the new law.

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