News

Are You Ready to Comply with California's New Paid Sick Leave Law?

December 30, 2014

A series of Frequently Asked Questions (FAQs) were recently posted to the Division of Labor Standards Enforcement website with respect to California's new paid sick leave law, the "Healthy Workplaces, Healthy Families Act of 2014." To better assist employers in implementing the new law, the FAQs are reflected in their entirety below.

It is important to note that while provisions of law relating to the accrual of paid sick leave actually don't become effective until July 1, 2015, the law actually becomes effective January 1, 2015, at which time, employers must comply with certain other provisions of the law, including the law's notice and posting requirements (see the FAQs in Sections I and II below).

Overview of California's Paid Sick Leave Law

Key features of the Healthy Workplaces, Healthy Families Act of 2014 are as follows:
  • Beginning July 1, 2015, employees working in California for 30 or more days within a year are entitled to accrue paid sick days at the rate of at least one hour per every 30 hours worked, beginning as of their date of employment (or July 1, 2015, if later).
  • Employees will be able to begin using their accrued paid sick days beginning on their 90th day of employment, after which they may use paid sick days as they are accrued, up to a maximum number of 24 hours, or 3 days per year.
  • Employees may use paid sick leave for their own health condition as well as the health condition of a family member (defined to include child, parent, spouse, registered domestic partner, grandparent, grandchild, or sibling). In addition, the employee can use leave if he or she is a victim of domestic assault, sexual violence, and/or stalking.
  • Accrued paid sick days are carried over to the following year, but do not need to be paid out at termination. Employees who are rehired with a break in service of less than one year are entitled to have previously accrued and unused paid sick days reinstated.
  • Certain employee groups are exempt, including those covered by a collective bargaining agreement that meets specific requirements, providers of in-home health care, and certain individuals employed in the airline industry who are compensated with time off equal to or exceeding the amount provided under this law.
  • The law is intended to provide minimum requirements pertaining to paid sick days. An employer that currently provides paid sick leave is permitted to (but is not required to) provide more paid sick days than what is required under this law.
  • Employers must track sick leave accrued and used for each employee. Records must be kept for at least 3 years.

I. General Information

Q: When does the new law take effect?
A: The state's new sick leave law takes effect January 1, 2015. However, the right to accrue and take sick leave under this law does not take effect until July 1, 2015.

Q: How do I qualify for paid sick leave?
A: An employee qualifies for paid sick leave by working for an employer on or after January 1, 2015, for at least 30 days within a year in California and by satisfying a 90 day employment period (which works like a probationary period) before an employee can actually take any sick leave.

Q: What if I work less than 30 days in California within a year?
A: If you work less than 30 days in California within a year you are not entitled to be paid sick leave under this new law.

Q: What if I work more than 30 days in California within a year but less than 90 days?
A: The 90 day period works like a probationary period. Although you begin to accrue paid sick leave on July 1, 2015, or your first day of employment if you are hired after July 1, 2015, if you work less than 90 days for your employer, you are not entitled to take paid sick leave.

Q: When am I entitled to take paid sick leave?
A: A qualifying employee begins to accrue paid sick leave beginning on July 1, 2015, or if hired after that date on the first day of employment. An employee is entitled to use (take) paid sick leave only after meeting the qualifications for paid sick leave (addressed in the previous three questions/responses) and accruing enough paid sick leave time to use for one of the stated purposes of the law.

Q: Why does the law take effect January 1, 2015 if I don't begin accruing until July 1, 2015?
A: The different dates are a result of the general effective dates of new legislation (on January 1 following enactment of the law) and the way the law was drafted making some of its provisions operative on a specified date (July 1, 2015). Both the qualifying periods that determine which employees are eligible for paid sick leave and the employee notice required by Labor Code 2810.5 become effective on January 1, 2015, but the law provides that entitlement does not begin until July 1, 2015.

Q: Does paid sick leave apply to all employees who work in California?
A: An employee who works at least 30 days within a year in California, including part-time, per diem, and temporary employees, are covered by this new law with some specific exceptions. Providers of publicly-funded In-Home Supportive Services (IHSS) are exempt. Employees covered by collective bargaining agreements with specified provisions are exempt, as are individuals employed by an air carrier as a flight deck or cabin crew member, if they receive compensated time off at least equivalent to the requirements of the new law.

Q: What if I am employed by a staffing agency?
A: Temporary employees of a staffing agency are covered by the new law. Therefore, whoever is the employer or joint employer is required to provide paid sick leave to qualifying employees.

II. Required Information to Be Provided to Employees

Q: How will I learn of my rights to paid sick leave from my employer?
A: Beginning January 1, 2015, employers are required to post in a conspicuous place at the workplace, a poster containing the following information: (1) that an employee is entitled to accrue, request, and use paid sick days; (2) the amount of sick days provided for and the terms of use of paid sick days; (3) that retaliation or discrimination against an employee who requests paid sick days or uses paid sick days or both is prohibited; and (4) that an employee has the right under this law to file a complaint with the Labor Commissioner against an employer who retaliates or discriminates against an employee. The new law required the Labor Commissioner to develop such a poster, and it is now available on the Labor Commissioner's website.

Second, after January 1, 2015, employers are required to provide most employees with an individualized Notice to Employee (required under Labor Code section 2810.5) that includes paid sick leave information. A revised Notice to Employee form (available to employers for download at DLSE's website) must be used for employees hired after January 1, 2015, and is optional for use prior to the January 1, 2015 effective date. Use of the revised form prior to January 1, 2015, will be deemed compliant with the new requirement as of January 1, 2015; otherwise, for employees hired prior to January 1, 2015, the employer is required to provide a revised Notice to Employee or otherwise inform each employee of the information regarding paid sick leave within 7 days of the change, using any of the alternative methods specified in Labor Code section 2810.5(b).

Q: How will I know if my employer's policy has different terms from the paid sick leave law?
A: The state law providing for paid sick leave creates minimum standards for paid sick leave. Employers may use their existing policies so long as the specific policy complies with the minimum requirements of the law. Where the employer provides additional terms (e.g., creates caps on maximum use or accruals above the minimums), they must inform employees of those additional terms. The revised Notice to Employee form has a check box to inform an employee of an employer's own policy that meets or exceeds the requirements of the new law. To avoid misinformation or misunderstanding regarding an employer's specific paid leave policy, employers are encouraged to ensure that employees are made fully aware of the terms and conditions of their specific policy which provides any additional paid sick leave terms. Although the notice requirements of Labor Code section 2810.5 do not apply to employees who are exempt from the payment of overtime, employees who are exempt from the payment of overtime are covered by this new paid sick leave law.

III. How Do Qualifying Employees Accrue and Take Paid Sick Leave

Q: If I qualify, how much paid sick leave am I entitled to take and be paid for?
A: Starting July 1, 2015, employees will earn at least one hour of paid leave for every 30 hours worked. That works out to a little more than eight days a year for someone who works full time. But employers can limit the amount of paid sick leave you can take in one year to 24 hours (three days).

Q: How is the year measured?
A: Because paid sick leave accrues beginning on July 1, 2015 or the first day of employment if hired after July 1, 2015, the 12 month period will vary by hire date for those employees hired after July 1, 2015. Therefore, the measurement will mostly be tracked by the employee's anniversary date.

Q: Can my employer provide paid sick leave to me prior to July 1, 2015?
A: Yes. An employer may elect to advance sick leave to an employee before it is accrued, but there is no requirement for an employer to do so under this law.

Q: Why does the law let me accrue more time than I could use in a year?
A: Accrual, carryover, and use are all distinct concepts. Accrual is based on the number of hours an employee works; the amount carried over to the next year may be subject to a cap if the employer establishes a cap by policy; and finally, use may be limited to 3 days per year.

IV. Employer Policies Can Provide More Paid Sick Leave But Not Less

Q: What happens when an employer has its own Paid Time Off (PTO) plan?
A: The new law establishes a minimum requirement, but an employer can provide sick leave through its own plan or establish different plans for different categories of workers. However, each plan must satisfy the accrual, carryover, and use requirements of the law or put the full amount of leave into your leave bank at the beginning of each year in accordance with the PTO policy. If an employer provides a policy which exceeds the minimum requirements, including providing a specific cap, the policy must be clear as to the additional terms that apply to their employees.

Q: How does an employer satisfy the provision for putting the full amount of leave into my leave bank under the alternative "up-front" (or advance) method for providing paid sick leave?
A: An employer must have a paid leave policy that satisfies the same purposes required by the new law and must provide no less than 24 hours or three days of paid sick leave for an employee to use each year. Therefore, the full amount of accrued leave must be available to the employee at the beginning of the 12 month period. For initial hires, however, the employee must still meet the 90 day employment requirement prior to taking any paid sick leave.

Q: Under the accrual method, can I carry over unused sick leave from one year to the next?
A: Yes, but an employer can limit or cap the amount of sick leave an employee may accrue to 6 days or 48 hours.

Q: My employer provides paid time off which I can use for vacation or illness. Will my employer have to provide additional sick leave?
A: No, as long as your employer provides at least 24 hours per year of paid leave that can be used for health care and meets other requirements in the law.

Q: My company offers unlimited time off. How does the new law affect me?
A: Most employers with this new but growing policy do not track how much time employees take off or for what reason. However, the new law requires that employers separately track sick leave accrual and use.

V. For What Purposes Can an Employee Take Paid Sick Leave

Q: What can I use sick leave for?
A: You can take paid leave for you or a family member for preventive care or care of an existing health condition or for specified purposes if you are a victim of domestic violence, sexual assault or stalking. Family members include the employee's parent, child, spouse, registered domestic partner, grandparent, grandchild, and sibling. Preventive care would include annual physicals or flu shots. For partial days, your employer can require you to take at least two hours of leave, but otherwise the determination of how much time is needed is left to the employee.

Q: Do I have to give notice that I need to take my paid leave?
A: Employers must permit the employee to use the paid sick leave upon an oral or written request, and the law forbids requiring an employee to find a replacement as a condition for using leave. If the need is foreseeable the employee must give reasonable advance notice, but where the need is unforeseeable the employee need only give notice as soon as practicable.

Q: If I leave my job, can I cash out my unused sick days, like I can with vacation and paid time off?
A: No, not unless your employer's policy provides for a payout. But if you leave your job and get rehired by the same employer within 12 months, you can reclaim what you had in your leave bank.

VI. Payment and Tracking of Earned and Taken Leave

Q: When I take paid sick leave, will I get paid as I normally do for the applicable pay period?
A: The new law requires that an employer provide payment for sick leave taken by an employee no later than the payday for the next regular payroll period after the sick leave was taken. This does not prevent an employer from making the adjustment in the pay for the same payroll period in which the leave was taken, but it permits an employer to delay the adjustment until the next payroll. For example, if you did not clock in for a shift and therefore were not paid for it but utilized your paid sick leave, your employer would have to pay you not later than the following pay period and account for it in the wage stub or separate itemized wage statement for that following regular pay period.

Q: How much will I get paid?
A: You must be paid at your regular hourly rate. If your pay fluctuates - for example, if you get a commission or piece rate - your employer will divide your total compensation for the previous 90 days by the number of hours worked and pay you that rate.

Q: How will I know how much sick leave I have accrued?
A: Employers must show, on your pay stub or a document issued the same day as your paycheck, how many days of sick leave you have available. Employers also must keep records showing how many hours you earned and used for three years. This information may be stored on documents available to employees electronically.

Q: How does the new law fit in with local sick leave ordinances?
A: For employees subject to local sick leave ordinances, the employer will have to comply with both the local and California laws, which may differ in some respects. For each provision or benefit, the employer will have to provide whichever is more generous to the employee.

The FAQs can also be found at: http://www.dir.ca.gov/dlse/Paid_Sick_Leave.htm.

The model Notice to Employees is available at: http://www.dir.ca.gov/dlse/Publications/LC_2810.5_Notice_(Revised-11_2014).pdf.

The model poster that must be displayed is available at http://www.dir.ca.gov/dlse/Publications/Paid_Sick_Days_Poster_Template_(11_2014).pdf.

For additional information, please visit the Office of Labor Standards Enforcement website at http://www.dir.ca.gov/dlse/resource.html or contact your Burnham Benefits Consultant, Burnham Benefits at 949-833-2983, or inquiries@burnhambenefits.com.

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