California paid sick leave: What you need to know for 2015
California has joined a growing number of jurisdictions mandating employers to provide paid sick leave to their employees, including part-time and temporary workers. Below is a summary of the California law’s key points:
There are two dates to keep in mind: January 1 and July 1.
The employer’s obligation to provide paid sick leave under the law does not take effect until July 1, 2015.
However, on Jan. 1, 2015, covered employers are required to:
- Post in a conspicuous place at the workplace a poster containing various requirements under the law. A compliant poster is available on the California’s Division of Labor Standards & Enforcement (“DLSE”) website.
- Issue newly hired nonexempt employees an updated “Notice to Employee” (required under California Labor Code section 2810.5) that includes paid sick leave information. A revised “Notice to Employee” form is available on the DLSE’s website. The law is not clear as to whether current nonexempt employees must be reissued a new “Notice to Employee” after January 1, or if the poster will suffice.
Employers who employ at least one employee who works in California at least 30 days within a year from the commencement of their employment, on or after Jan. 1, 2015, are covered by the California law.
Employees are eligible for paid sick leave if they are not covered by one of the limited exemptions to the law (discussed below); and they work for an employer on or after Jan. 1, 2015, for at least 30 days within a year from the commencement of employment.
The law applies to part-time, temporary, seasonal and per diem employees. The law also applies to employees who are exempt from overtime requirements.
According to the DLSE, employees must have been employed for 90 days before they begin using their sick leave. However, employers must provide the leave at the commencement of employment or July 1, 2015, whichever is later.
Under specified conditions, the law does not apply to the following types of employees:
- Employees covered by a valid collective bargaining agreement that provides for paid leave for sickness and other terms of employment
- Employees in the “construction industry” covered by a valid collective bargaining agreement under certain conditions
- Providers of in-home supportive services
- Employees of an air carrier as a flight deck or cabin crew member under certain conditions
Options for providing the benefit
The California law appears to provide two options for how employers may provide the paid sick leave benefit:
- Option 1, accrual system: Covered employees accrue one hour of paid sick leave for every 30 hours worked. Employees exempt under California administrative, executive, or professional exemptions are presumed to have a 40-hour workweek for purposes of this accrual calculation. However, such an exempt employee whose normal workweek is fewer than 40 hours may accrue paid sick leave based on that employee’s normal workweek.
- Option 2, annual grant or front loading of time: Instead of using the accrual method, employers can choose to give covered employees at least three days or 24 hours of paid sick leave at the beginning of each year of employment or calendar year or 12-month basis.
Carry over of unused paid sick time
The most significant difference between the accrual and annual grant options is that the accrual method requires employers to carry over accrued, unused paid sick time, while the annual grant option does not. However, the law permits employers to cap accrual of paid sick leave at 48 hours or six days per year. In addition, the law permits employers to limit use of accrued paid sick leave at 24 hours or three days per year.
The annual grant option, on the other hand, mandates no such carry over.
Permitted purposes for use
In general, an employee can take paid sick leave for the employee’s or a family member’s preventive care or care of an existing health condition, or for specified purposes if the employee is a victim of domestic violence, sexual assault or stalking. Preventive care would include annual physicals or flu shots.
Employer with own paid time off (PTO) policy
The new law establishes a minimum requirement, but an employer can provide paid sick leave through its own paid leave policy. However, any such policy must satisfy the accrual, carryover and use requirements of the law. Alternatively, the policy must provide no less than 24 hours or three days of paid sick or equivalent paid leave or paid time off for employee use for each year of employment or calendar year or 12-month basis.
Unused paid sick time at termination
Unlike unused vacation and PTO time, employers are not required to pay out unused and available paid sick time at termination.
Employers without a paid sick time policy should start drafting one that complies with the law’s requirements. Employers with an existing paid sick leave or PTO policy should carefully review their existing policies to ensure that they meet all of the law’s requirements prior to July 1, 2015.