What you need to know about California’s new Paid Sick Leave
The paid sick leave law went into effect January 1, 2015, but employers are not required to provide paid sick leave to eligible employees until July 1, 2015. The new law is Labor Code Section 245 et seq.
Beginning January 1, 2015, employers must provide notice to all employees about the law. A copy of the compliant notice is here. Beginning January 1, 2015 employers must also start using a new Wage Theft Notice whenever non-exempt employees are hired. The new Wage Theft Notice is here.
If employers already have a paid sick leave or paid time off (“PTO”) policy that meets or exceeds the law’s requirements, then those employers do not need to provide any additional time. If employers do not have such a policy they will have until July 1, 2015 to develop and implement it. All employers are encouraged to review their policies to determine if they are compliant.
Here are the requirements:
1. Who is eligible?
Employees who work 30 or more days a year in California are entitled to paid sick leave. This means on-call employees or seasonal employees who work less than 30 days a year are not entitled to the leave.
Very few employees are excluded from the law. Some employees covered by collective bargaining agreements, some in-home support service employees, and some air carrier employees are excluded. Everyone else is covered as long as they work 30 or more days a year in California. This means part-time, temporary and seasonal employees, as well as regular full-time employees and those who are compensated on commission.
2. What must employers provide?
Employers must provide employees with no less than 24 hours or three days of paid sick leave, or equivalent paid leave, such as PTO, for employee use each year. Because the law uses the words “no less than” employees who work 10 hour days are entitled to at least 30 hours of paid sick leave to equate to their three days of work. And employees who work six hour days are entitled to the 24 hours of paid sick leave, which in their case would equate to four paid sick days.
If an employer provides employees with the full amount of leave in the beginning of the year, the employer does not have to accrue or carry over paid sick leave. The employer must provide the employee with at least 24 hours or three paid sick days for employee use for each year of employment or calendar year or 12-month basis.
3. How is the sick leave accrued?
If employers do not provide paid sick leave in a lump sum at the beginning of the year, employees are to accrue paid sick days at a rate of not less than one hour per every 30 hours worked beginning on July 1, 2015, or on the employee’s hire date if hired after July 1, 2015. Employees must be allowed to carry over any accrued, but unused sick leave into the next year, but employers may cap the employee’s accrual at 48 hours or six days of paid sick leave.
4. What rights do employers have to limit the use of paid sick leave?
Employers can require that employees work at least 90 days before using any accrued sick leave. This works as a probationary period. Employers can limit the amount of paid sick leave employees can take in one year to 24 hours or three days.
5. At what rate is the sick leave paid?
The rate of pay for sick leave is the employee’s regular hourly rate. If the employee’s pay fluctuates because of different hourly rates, commissions, bonuses or piece rates in the 90 days of employment before taking accrued sick leave, 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 of the prior 90 days of employment. This is a significant change for employers who normally pay a straight hourly wage for vacation or sick time.
6. How is sick leave tracked?
The new law requires employers to show the accrued sick leave on employees’ pay stubs or on a document issued the same day as the paycheck. This poses significant issues for employers that provide unlimited time off to exempt employees. There is no exclusion for such employees, which means employers must begin tracking paid sick days for these employees.
7. What happens to accrued sick leave when employment terminates?
Unlike accrued vacation time, employees are not entitled to accrued but unused sick leave at termination.
California Labor Commissioner Issues Required Postings for New Paid Sick Leave Law
The California Labor Commissioner recently issued the Paid Sick Leave poster template and Wage Notice for employers to use as of January 1, 2015 in compliance with California’s new paid sick leave law, AB 1522. Employers do not need to use these documents in their workplace, but if they create their own posters and notices, the information must be the same. Employers can find the Labor Commissioner issued posting here and the Wage Notice here.
Although the posting and wage notices are to be used as of January 1, 2015, employees’ entitlement to paid sick days does not go into effect until July 1, 2015. For legal guidance on implementing the new law contact Jennifer Phillips by clicking here.