Effective July 1, 2015: New Mandatory Paid Sick Leave Law in California

The Healthy Workplaces, Healthy Families Act of 2014 becomes effective July 1, 2015, and requires all California employers to provide their employees with at least 3 days (24 hours) of paid sick leave per year.

Further, the new law applies to all employees (non-exempt, exempt, temporary, part-time, and seasonal) who work in California 30 days or more in a year. The only employees not included are: (1) union-represented employees covered by a collective bargaining agreement which expressly provides for paid sick leave, final and binding arbitration, and other requirements; (2) employees in the construction industry covered by a collective bargaining agreement that satisfies certain criteria; (3) providers of certain in-home services; and (4) employees of an air carrier flight deck or cabin crew members who receive paid time off equal to the requirements of the new law.

The new mandatory paid sick leave law requires the following:

  • Sick leave usage: 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 leave bank.) Employers may also set a minimum increment not to exceed two hours for use of paid sick leave. If foreseeable, employees must provide reasonable advance notification, orally or in writing, of the need to use sick leave. 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 work.
  • How it is Accrued: 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 equals approximately 1.3 hours per week, or 5.3 hours per month, for employees who work 40 hours a week (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.
  • Sick Leave Pay Rate: 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 worked in the full pay periods in the prior 90 days of employment. Payment for sick leave must be made no later than the payday for the next regular payroll period after the sick leave was taken.
  • Carry-over / cap on accrual: 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.
  • Valid reasons for 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.
  • Interaction with other 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.
  • No pay-out 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. However, if an employee separates from an employer and is rehired within one year, previously unused paid sick days must be reinstated.
  • Notice / 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 new 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.
  • No discrimination or retaliation: Employers may not deny an employee the right to use accrued sick days, discharge, threaten to discharge, demote, suspend, or in any manner discriminate against an employee for using or attempting to use accrued sick days. The law creates a presumption (rebuttable) of unlawful retaliation if an employer takes an adverse employment action within 30 days of an 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.
  • Record-keeping requirements: Employers must keep for at least three years records documenting the hours worked and paid sick days accrued and used by each employee, and if requested must make such records available for the employee to inspect.