REMINDER: California Employers Are Required to Provide Paid Sick Leave Beginning July 1

Beginning July 1, state law will require all California employers to annually provide at least 3 days of paid sick leave to their employees.  The Healthy Workplaces, Healthy Families Act of 2014 (AB 1522) applies to all California employees (including part-time) who work at least 30 days a year, regardless of the employer’s size.  In response to the law, we have outlined a series of paid sick-leave policies that comply with the new law.

To begin, employers have two options for determining paid sick leave for their employees: 1) an accrual approach in which employees accumulate hours of paid sick-leave time for a certain number of hours worked; or 2) a yearly-basis approach in which employees are given a set number of paid sick-leave days for the entire year on January 1.

Accrual Policy

• All employees will accrue paid sick leave at the rate of at least one hour per every 30 hours worked.  Exempt employees are assumed to work 40 hours per week, unless their normal workweek is less than 40 hours.
• Employers may limit use of paid sick leave to three days, or 24 hours, per year even if the employee has accrued more leave.
• Employers can also cap accrual at six days, or 48 hours, and prevent an employee from accruing additional paid sick leave until they deplete their sick leave bank.
• Accrued and unused paid sick leave will carry over to the following year.
• Paid sick leave will begin to accrue on July 1, 2015.  If the employee is hired after July 1, 2015, paid sick leave will begin to accrue when employment begins.
• Employees may begin to use paid sick leave on the 90th day of employment.  After the 90th day, paid sick leave may be used as it is accrued.

Yearly-Basis Policy

• All employees will have three days, or 24 hours, of paid sick leave per year.
• Employers provide the full amount of paid sick leave on January 1 of each year.
• Employees cannot carry over unused paid sick leave to the following year.

Employees must provide notification in advance to their employer if the need for paid sick leave is foreseeable.  If not foreseeable, the employee must provide notice of the need for leave to their employer as soon as practicable.

The Act requires employers to permit employees to take paid sick leave in increments of two hours or smaller, and the employer must provide notice of the employee’s remaining paid sick-leave hours on the employee’s wage statement or in a separate document provided with the employee’s wages.  Employers must also keep records documenting the employee’s hours worked, and paid sick days accrued and used, for at least three years.

The Act also permits employees to use paid sick leave to seek medical, psychological, legal, or other remedies and care relating to domestic violence, sexual assault, or stalking.  In addition to personal use, employees may use paid sick leave for the care of the employee’s child (regardless of age or dependency), spouse, registered domestic partner, parent, grandparent, grandchild, or sibling.

Paid sick leave must be paid at the employee’s hourly wage on the next regular pay date immediately after the leave.  Exceptions to this rule include employees that have had different hourly rates in the 90 days preceding the sick leave, employees that earn commissions, and nonexempt salaried employees.  Employers determine the rate of pay for these exceptions by dividing the employee’s total wages, not including overtime pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment.

Employers do not need to pay out any accrued and unused sick leave at the time of employment separation.  If, however, the employer re-hires an employee within a year, it must reinstate the unused paid sick leave.

Finally, the Act requires all employers to display a poster in a conspicuous place informing employees of their rights under the Act.  The poster can be found here: https://goo.gl/Ivj8tN.

Violations of the Act may result in monetary penalties.  For example, if paid sick days are unlawfully withheld from an employee, the employer may have to pay the greater of the paid sick leave value or $250.  Each violation also carries a $50 penalty for each day the violation occurred or continued.  Failure to display the required poster has a $100 penalty per offense.  And if the employer fails to keep accurate records of the hours worked and the number of paid sick-leave hours accrued and used for three years, the employee is presumed to be entitled to the full number of hours of paid sick leave permitted by the law.

Employers who already have a paid-leave policy that satisfies the requirements of the Healthy Workplaces, Healthy Families Act of 2014 do not need to provide additional days of paid sick leave.  All employers, however, should review their policies to ensure that they comply with all of the Act’s requirements.  If you have any questions regarding your current paid-leave policy, or any other legal inquiries, please contact the attorneys of Carlson & Jayakumar at (949) 222-2008 or visit us at www.cjattorneys.com.

By Jehan N. Jayakumar, Keith W. Carlson, and Jasmine Dos Santos