On October 4, 2023, Governor Gavin Newsom signed Senate Bill 616 and expanded California’s sick leave law, the Healthy Workplaces, Healthy Families Act of 2014. As a result, California employers must be prepared to comply by January 1, 2024, notably by increasing the amount of paid sick leave provided to employees.
Paid Sick Leave Under Current Law
All California employers, regardless of size, are required to provide employees with 24 hours or three days of paid sick leave per year. The law applies to employees that have worked in California for 30 or more days in a year and have completed 90 days of employment with the same employer.
Employers may provide paid sick leave to employees through either the frontload or accrual methods:
- Under the frontload method, employers must provide the full amount of paid sick leave (24 hours or three days) to employees at the beginning of the calendar year. Under this method, employers do not have to allow employees to carry over unused paid sick leave to the following year.
- Under the accrual method, employees accrue paid sick leave at a rate of one hour for every 30 hours worked. Alternatively, employers may use a different accrual method so long as the employee has no less than 24 hours of accrued sick leave by the 120th calendar day of employment of each calendar year. Employers must allow employees to carry over unused paid sick leave to the following year but may limit employees’ use of accrued paid sick leave to 24 hours or three days in each year. Employers may cap employees’ total accrual of paid sick leave to 48 hours or six days.
Paid Sick Leave Under Amended Law: Increase from 24 to 40 Hours
On January 1, 2024, California’s paid sick leave law will expand and require California employers to provide employees with 40 hours or five days of paid sick leave per year, i.e., 16 more hours or two more days than previously required.
Employers may continue to provide paid sick leave through either the frontload or accrual methods as described above. Under the frontload method, employers are simply required to increase the sick leave provided at the beginning of the calendar year from 24 hours (three days) to 40 hours (5 days). As before, when using the frontload method, there will be no carryover required from year to year.
Under the accrual method, employers may continue to use the default accrual method of one hour for every 30 hours worked. Alternative accrual methods can be used; however, employers must also ensure that an employee has no less than 40 hours of accrued sick leave by their 200th calendar day of employment of each calendar year (and also still meet the benchmark of 24 hours by the 120th calendar day of employment). As with the current law, carryover of sick leave at 2 times the annual accrual is required when using this method, but now that figure amounts to a total carryover of 80 hours (10 days).
Additional Revisions to Amended Law
Paid Sick Leave and Collective Bargaining Agreements
Currently, the paid sick leave law does not apply to employees covered by a valid, collective bargaining agreement (“CBA”) that includes certain provisions. However, under the amended law, an employee working under a CBA (with the notable carveout of the construction industry) must be permitted to use paid sick leave for the following purposes:
- Diagnosis, care, or treatment of an existing health condition of, or preventative care for, an employee or employee’s family member or
- Time off for an employee who is a victim of domestic violence, sexual assault, or stalking.
(Note that non-union employees may use their sick leave for these same reasons.) An employer may not require that an employee working under a CBA search for or find a replacement to cover the days in which the employee uses paid sick days for such purposes.
Further, as with non-union employees, an employer may not discharge, threaten to discharge, demote, suspend, or discriminate against an employee working under a CBA for attempting to use or using paid sick leave. Such actions by an employer create a rebuttable presumption of unlawful retaliation.
Effect on Local Sick Leave Ordinances
Presently, eight California cities have their own paid sick leave laws (Oakland, San Francisco, Berkeley, Santa Monica, Emeryville, Los Angeles, Long Beach, and San Diego) with sick time benefits that meet or exceed those under California law. Thankfully, as of January 1, 2024, although such cities are free to continue to provide a greater amount of sick leave than under state law, the amended California paid sick leave law will bring some level of uniformity and preempt local ordinances in the following respects (note that all of these carry over from the existing California sick leave law—the difference is that these rules now apply to such local sick leave ordinances):
- Employers are not required to provide compensation to an employee for accrued, unused sick leave upon termination, resignation, retirement, or separation from employment. However, if an employee separates and is rehired by the employer within one year from the date of separation, previously accrued and unused paid sick days must be reinstated.
- An employer may advance paid sick leave to an employee at the employer’s discretion and with proper documentation.
- An employer must provide an employee with written notice that sets forth the amount of paid sick leave available for use on either the employee’s itemized wage statement or in a separate writing provided on the designated pay date.
- An employer must calculate paid sick leave for nonexempt/hourly employees using either of the following methods:
- Paid sick leave shall be calculated in the same manner as the regular rate of pay for the workweek in which the employee uses paid sick time; or
- Paid sick leave shall be calculated by dividing an 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.
(For exempt employees, paid sick leave is calculated in the same manner an employer calculates wages for other forms of paid leave time.)
- If the need for paid sick leave is foreseeable, an employee must provide reasonable advance notice. If the need for paid sick leave is not foreseeable, an employee must provide notice for the leave as soon as practicable.
- An employer must 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.
Next Steps for Compliance
To comply with the amended paid sick leave law, California employers should take the following steps by January 1, 2024:
- Review and Update Current Paid Sick Leave Polices. Employers should review their current paid sick leave or paid time off policies with counsel to ensure compliance with the provisions of the amended law.
- Inform Employees of Any Policy Changes. Employers should notify employees, with sufficient lead time, of the revised paid sick leave policies.
- Coordinate Changes with Payroll. If providing a greater paid sick leave allotment to employees than previously provided, employers should coordinate with payroll to ensure that the updated allotment is correctly noted on employees’ itemized wage statements.
- Train Relevant Staff. Employers should ensure that human resources and payroll employees are aware of any paid sick leave policy changes and train them on how to administer such policies and to answer employee questions regarding same.
For more information, contact Monte Grix or Jenna Rogenski. Monte can be reached at 415 835 9016 or firstname.lastname@example.org. Jenna can be reached at 415 835 9009 or email@example.com