In Sickness and in Health: Paid Sick Leave Comes to California July 1, 2015
If you have at least one employee working in California, you are a covered employer under that state’s paid sick leave law.
This article was published in the June 24, 2015, issue of the National Law Review.
The right of an employee to accrue and take leave under California’s new Healthy Workplaces, Healthy Families Act of 2014 (the “Healthy Workplace Act”) begins July 1, 2015, six months after the January 1, 2015, effective date of the Act.
The rationale behind the delayed effective date – besides staying consistent with California’s long-standing tradition of creating mass confusion – was to require employers to provide their employees with the notice required by California Labor Code § 2810.5(h) as well as an opportunity to update employee handbooks and policies before the effective date of the accrual period.
The Healthy Workplace Act requires that employers provide paid sick leave to any employee who, on or after July 1, 2015, works in California for 30 or more days within a year from the commencement of his or her employment. Employees begin accruing sick leave after 30 days of employment and can begin using paid sick leave after they have worked for the employer for 90 days. Under the new law, California employees accrue paid sick days at a minimum rate of one hour per every thirty hours worked. Employees who are considered exempt under one of the Industrial Welfare Commission’s wage orders are presumed to work 40 hours per workweek, unless the employee’s normal workweek is less than 40 hours. Yes, you read that right. Just like Disneyland’s famous all-inclusive weekend packages, the definition of “employee” under the Healthy Workplace Act is also all-inclusive of exempt and non-exempt employees alike, as well as part-time, seasonal, and temporary employees as long as the employee meets the minimum work requirements. Everyone gets in on the party.
Although the Act is exceedingly broad on who is entitled to paid sick leave, it does permit employers to cap an employee’s use of paid sick leave to 24 hours during each year of employment or calendar year. For those of you following along with a greater math pedigree than me, you’re saying to yourself, “wait a minute, that means that employees can accrue more sick leave than they can use.” And right you are. The new law accounts for this by allowing employees to carry over accrued but unused, time from year to year. The right to carry-over also means the employee continues to accrue time even after exhausting the maximum amount of sick leave entitlement within a given year. Nonetheless, employers may choose to cap an employee’s annual accrual of paid sick leave to 48 hours per year.
What if you are an employer who has PTO policies (which cover absences due to illness) already in place that are more generous to establishing a healthy workplace than what is required by California’s Healthy Workplace Act? Fear not. The Act provides an exception for employers who meet each of the minimum use, accrual, and carry-over requirements. The Act also excludes employees covered by valid collective bargaining agreements (that is, union-represented employees) so long as certain conditions are met.
Employers should utilize the last week before the law goes into effect to confirm with their payroll department (or outside payroll processing vendors) that their sick leave accrual and use policies will be accurately reported on pay stubs (to avoid claims under a separate California law that imposes liability for incorrect pay statements). Employers also should take this time to ensure that their employee handbooks contain the new California paid sick leave requirements as well as get on the same page with their human resources representatives regarding use of sick leave.