Are You Prepared to Comply with California’s New Sick Leave Law by July 1, 2015?

On January 1, 2015, California’s “Healthy Workplaces, Healthy Families Act of 2014,” known as California’s Paid Sick Leave Law, went into effect. Starting on July 1, 2015, employers must begin complying with the law’s accrual and use provisions. Below is information about the law’s many different nuances so that you can begin preparing for implementation at your workplace. If you have questions about the law, contact Shivani Sutaria Law Offices. What Can Sick Leave be Used For?

For the diagnosis, care, or treatment of an existing health condition of, or preventive care for, employees and/or employees’ family members (“family members” defined as child, parent, spouse, registered domestic partner, grandparent, grandchild, or sibling).
Judicial (i.e. obtaining restraining order), psychological (i.e. counseling) and medical (i.e. treatment for injuries) needs of victims of domestic violence, sexual assault or stalking.

Who does this Law Apply to?

All public and private California employers or employers doing business in California.
Employers of all sizes (there is no small business exception).
All types of employees are covered under the law, including non-exempt, exempt, full-time, part-time, seasonal, and temporary employees.
Employers must provide sick leave to employees who have worked for the employer on or after January 1, 2015 for at least 30 days within the year in California.
Employees covered by certain collective bargaining agreements, who provide publicly-funded in-home supportive services under various sections California’s Welfare & Institutions law, and certain persons employed by an air carrier as a flight deck or cabin crew member are not covered by this law.

In What Ways Can an Employer Provide Sick Leave?

Employers must provide a minimum of “24 hours or 3 days” of paid sick leave to employees each year of employment, which can be granted in a lump sum or through an accrual method.
Through the accrual method, non-exempt employees will accrue at a rate of no less than one hour of paid sick leave for every 30 hours worked.
Under this method, for employees hired before July 1, 2015, the “year of employment” should be based on July 1, 2015 to June 30, 2016, and for employees hired after July 1, 2015, the “year of employment” should be based on the employee’s anniversary year.
Accrual can be capped at “48 hours or 6 days” of paid sick leave each year of employment.
Accrued but unused sick leave must carry over year to year.
If an employee separates from employment then is rehired within one year, previously accrued paid sick leave must be restored.
For a lump sum grant, a minimum of “24 hours or 3 days” can be granted at the beginning of a rolling 12 month period (i.e. July 1-June 30), the calendar year or the anniversary year.
For this method, there is no year to year carry over requirement.
Pros/Cons for Accrual Method: Pro – Leave accrued are based on hours worked; Con – Requires tracking of hours worked; Year to Year Carry-Over Requirement.
Pros/Cons for Lump Sum Grant: Pro – No accrual tracking; No Year to Year Carry-Over Requirement. Con – Employee can use immediately regardless of hours worked (new hires still need to complete 90-day work requirement).
Employers with existing PTO and sick leave policies need not offer additional sick leave if:
It makes available paid sick leave (or equivalent time off) that may be used for the law’s same purposes, and
It satisfies the law’s eligibility, accrual, carryover and usage requirements, and
It provides a minimum of “24 hours or 3 days” of paid sick leave for use in each year of employment, calendar year or 12-month basis.

When Can an Employee Use Sick Leave?

Employees can start using sick leave following completion of 90 days of employment with the employer (marked from date of hire).
Employers can require employees to take a minimum of two hours of sick leave.
Employers are prohibited from requiring employees using sick leave to search for or find a replacement employee to cover the absence.
Unused sick leave does not have to be paid out at separation of employment, but if sick leave is being given through PTO then the PTO must be paid out at separation of employment.
Employers can cap use at 24 hours or three days in each year of employment.
In capping use to 24 hours or three days, part-time employees use is based on each employee’s workday and thus a part-time employee working 4 hour shifts who takes 3 days of leave has taken only 12 hours of sick leave and is still has 12 hours remaining for use.

How are Accrual Hours and the Rate of Pay Calculated?

For accrual purposes, salaried exempt employees are deemed to work 40 hours per week or their normal schedule, whichever is less.
For accrual purposes, non-exempt employees’ overtime hours count as hours worked, but paid time off like vacation, sick pay, holiday pay, and PTO do not count.
Sick leave must be paid at employees’ regular rate of pay.
Non-exempt employees without varying pay rates, will be paid at their hourly wage.
For employees with varying pay rates (i.e. differing hourly rates, commission pay, piece rate pay or salary), the employer must divide the employee’s total wages by the employee’s total hours worked in the full pay periods for the prior 90 days of employment to determine the regular rate of pay.

What Notice Must Employees Provide to Use Sick Leave?

Employers can encourage, but not require, employees to give prior oral or written notice when the need for sick leave is foreseeable.
The law is silent about whether employers can request medical documentation from the employee about the reason sick leave is needed or was taken.

What Notice and Recordkeeping Requirements Must Employers Satisfy?

Posting: Employers must post notice of this law at the workplace as of January 1, 2015: http://www.dir.ca.gov/DLSE/Publications/Paid_Sick_Days_Poster_Template_(11_2014).pdf
Individual Notice to New Hires: A revised version of Labor Code Section 2810.5 must be provided to new employees hired after January 1, 2015: http://www.dir.ca.gov/DLSE/Publications/LC_2810.5_Notice_(Revised-11_2014).pdf
Individual Notice to Existing Employees: Employers must provide existing employees notice through the revised Labor Code Section 2810.5 form or another writing within seven calendar days after the change in the term and condition of employment.
Employers must document employees’ balance of available sick leave on their itemized wage statement or on a document attached to it.
Employers must maintain records showing how many hours of sick leave each employee accrued and used, and must keep these records for three years.

What is the Law’s Discrimination/Retaliation Provision?

Employers are prohibited from discriminating or retaliating against employees who request and/or use paid sick leave, and as such are cautioned from counting such an absence as unexcused or in violation of an attendance policy.

What are the Penalties Employers Can Face for Non-Compliance?

Failure to Post Notice: $100 per offense.
Failure to Provide Written Notice of Available/Accrued Paid Sick Leave of Paystubs: A sum of $50 a day but not to exceed an aggregate penalty of $4,000.
Withholding of Paid Sick Leave: Dollar amount equivalent of paid leave withheld multiplied by three or $250, whichever is greater but not to exceed an aggregate penalty of $4,000.
Civil Action: Labor Commissioner and/or the Attorney General can bring a civil action against a violating employer.

What are the Law’s Important Dates?

January 1, 2015: Employers must post notice of this new law at the workplace in a conspicuous place.
January 1, 2015: Employers must begin using a revised version of the Wage Theft Act Notice (Labor Code 2810.5) for non-exempt employees hired after this date.
July 1, 2015: Employees begin accruing and using sick leave.
July 8, 2015 (within 7 days of a change in a term and condition of employment): Employers must provide a revised version of the Wage Theft Act Notice (Labor Code 2810.5) or a another writing to non-exempt employees hired prior to January 1, 2015 for the purpose of informing them of the sick leave law.