October 2, 2014

FAQ About California’s New Sick Leave Law

In what is potentially the biggest change to California’s employment laws, beginning July 1, 2015, all California employers will be required to provide paid sick leave to all employees who have completed 90 days of work.  With enactment of the “Healthy Workplaces, Healthy Families Act of 2014,” California joins Connecticut as the only two states to require paid sick leave for employees.

Paid sick leave laws have been very controversial in practice and, in fact, ten states ban employers from offering paid sick leave.  Generally speaking, opponents of paid sick leave argue that the laws encourage employees to call in sick, even when they are not sick and that it leads to a decrease in hiring and wages. In Connecticut, for example, about 20 percent of employers who responded to a survey indicated that they had reduced other employee benefits to balance the cost of the paid sick leave and others had reduced wages, raised prices, or laid off employees.  In the City of San Francisco (which has a paid sick leave ordinance), similar findings were found.

Regardless, as of July 1, 2015, paid sick leave will be the law in California.  Here are basic answers to the most frequently asked questions about the law.

What Employees Will Be Entitled To Paid Sick Leave?

The Act applies requires employers to provide paid sick leave to any employee who: (1) has worked in California for 30 or more days in a year; and (2) has completed 90 days of employment with that employer.  If employees are covered by a collective bargaining agreement that meets certain minimal requirements, the CBA will govern instead of the Act.

What Employers Will Be Required To Provide Paid Sick Leave?

All employers in California are covered by the Act.  That includes employers with one employee and not-for-profit employers.

How Much Paid Sick Leave Will Employers Be Required To Provide?

Employees will accrue paid sick leave at a rate of one hour per every 30 hours worked.  Employees who are exempt from the overtime requirements of California law are deemed to work 40 hours in a week, barring any evidence to the contrary.  Any unused but accrued paid sick leave must carry over to the following year, but an employer can cap an employee’s accrual at 48 hours or 6 days of paid sick leave.

How Much Paid Sick Leave Will Employees Be Allowed To Use?

Employers can have a paid sick leave or PTO policy which provides no less than 24 hours or 3 days of paid sick leave for each year of employment or for every 12 months.  Employers can require employees to use paid sick leave in two hour increments.

How Does The Law Define Appropriate Uses For Paid Sick Leave?

Employees may determine how much paid sick leave they need to use under the Act, although they are required to provide reasonable advance notice if the need for leave is foreseeable.  In addition to taking time off for an employee’s own illness, the Act allows paid sick leave to be used for care of an immediate family member, a spouse or domestic partner, a sibling, a grandparent or a grandchild.

What Is The Rate Of Pay For Paid Sick Leave?

Employees must be paid at their regular, hourly rate of pay.

Will Employers Need To Pay Employees For Unused Paid Sick Leave At Termination?


What Notice And Recordkeeping Requirements Apply?

Employers need to display a poster in a conspicuous place which describes employees’ rights under the law and they must provide notice on every pay stub of the amount of paid sick leave available.  Employers must also keep records for three years of hours worked,  and paid sick leave used and accrued by employees.

Does The Law Change California Employers’ Obligations Under The Family and Medical Leave Act or the California Family Rights Act?

No.  The law is clear that it supplements and does not change existing law.  As a result, employers who are eligible for leave under the FMLA or CFRA will still be eligible for such leave.

Can An Employer Take An Adverse Action Against An Employee Who Has Recently Used Paid Sick Leave?

The most controversial aspect of the law is that while employers are not prohibited from taking an adverse action against an employee who uses paid sick leave, it creates a presumption in favor an employee that he or she was retaliated against if an employer takes action against him/her within 30 days of using paid sick leave.  Under almost all other employment laws, an employee has to prove that an employer did retaliate against him, but under this law, that is turned on its head.  An employer who takes adverse action against an employee within 30 days of an employee’s use of paid sick leave has to prove that it did not retaliate against an employee.

The practical applications of that role reversal are stunning.  If an employee has 48 hours of sick leave, he can take a half day of sick leave every month and this presumption will apply to him for 30 days after each time he takes leave.  Effectively, that employee can have the benefit of the rebuttable presumption for an entire year.

What Do California Employers Need To Do Before July 1, 2015 To Prepare For This Law?

Three things, in particular.  First, employers need to ensure that their posters are up to date and that their employee handbooks are modified to reflect these changes in the law.  Second, employers should also ensure that their payroll providers update their paystub practices to ensure that paid sick leave is accounted for and reflected on every paystub.  Third, employers should ensure that their HR and payroll professionals are trained on the law and understand its application.