For more information please call  800.727.2766


Paid Sick Leave in California Gets Real

Rebecca DieringerTo listen to EPS' RealSolutions® Podcast "Paid Sick Leave in California Gets Real", listen to our podcast or download from iTunes.

The July 1, 2015 deadline is here. California employers of all sizes must provide paid sick leave to their employees in compliance with California’s new paid sick leave laws, known as the Healthy Workplaces, Healthy Families Act of 2014 (the “Act” or “PSLL”).1 The new law applies to all California employers2 regardless of the number of workers they employ. Additionally and with few exceptions, an employee “who, on or after July 1, 2015, works in California for 30 or more days within a year from commencement of employment” is entitled to the benefits of the new law.3  Full-time, part-time, exempt, nonexempt, seasonal, and temporary employees are covered under the Act. Even out-of-state employees can be covered if they spend enough time working in California.

Permitted Usage
Permitted uses of sick leave are not limited to the employee’s own health conditions. Rather, under the Act, employees may use accrued paid sick leave for their own or their family member’s health condition (including treatment, diagnosis, care, or preventive care). “Family member” is defined broadly and includes child (regardless of the child’s age or dependency status), parent, spouse or registered domestic partner, grandparent, grandchild and sibling.4 Employees who are victims of domestic violence, sexual assault or stalking may also use the leave for medical treatment and for certain related legal proceedings. 5 

Employees are required to give their employer (verbally or in writing) “reasonable advance notice” of the need for leave if the need is foreseeable, otherwise “as soon as practicable.” The Act does not specify how much notice is “reasonable.” Employers who wish to define “reasonable advance notice” in their sick leave policy should consider the notice requirements under similar leave or attendance policies like an FMLA unpaid medical leave policy. 

Employers cannot require employees to take sick leave in increments greater than 2 hours. For example, an employer cannot tell its employee that the employee needs to take a half-day off for a brief doctor’s appointment.  

The new PSLL is silent as to whether an employer may require a doctor’s (or other health care provider) note certifying the need for the leave. The Department of Industrial Relations recently opined in its webinar discussing PSLL compliance issues that requiring doctors’ notes (or other medical certifications) could be construed as unlawful interference with the employee’s statutory right to the sick leave.

What should an employer do? Unless the medical certification is permitted under another leave law (and the employer requires medical certification on its corresponding leave policy), employees should not be required to provide such certification with respect to taking paid sick leave. 

Calculating Leave
Over the last several months, California employers had the opportunity to review the 3 methods in which to satisfy the requirements to provide their employees with paid sick leave. The options are:

1. Accrual Method; 
2. Lump-Sum Approach; or
3. Existing Policy Meets Minimum Requirements.

Accrual Method
Under the statutory mandated accrual method, an eligible employee earns one hour of sick pay for every 30 hours worked. Both regular and overtime hours are counted toward the 30 hours worked. Employees who are exempt under the administrative, executive or professional exemption are deemed to work 40 hours per workweek unless a normal workweek is less than 40 hours, in which case the accrual would be based on the normal workweek.

Accrual begins on July 1, 2015 or the employee’s date of hire if after July 1, 2015. Policies that prohibit employees from accruing sick days until after completion of an introductory period are not allowed. New hires begin accruing sick leave on day one of their employment. Employers may prohibit new hires from using their accrued sick days until the 90th day of employment. 

If the accrual method is chosen, the accrued paid sick days will carry over to the following year. However, employers can cap the employee’s total accrued amount to 48 hours or six days. Employers should be aware that if the accrual is not capped in its written policy, a full time employee (i.e., 40 hours a week with no overtime) could potentially accrue over 69 hours (8 days) of paid sick leave per year and be allowed to carry that to the following year. 

Lump-Sum Approach
Under the lump-sum method, the employer grants the full amount of leave (3 days or 24 hours) at the beginning of each year. The lump-sum method avoids tracking accrual and carry-over and is therefore less administratively burdensome. However, employers must still comply with the record keeping requirements (discussed below).

Although an employee will not be able to carry over unused sick days, the employee will get 3 new sick days at the beginning of the following year. Under this scenario (as opposed to that discussed below), the PSLL does not clarify how a “year” is to be measured, i.e., whether it is measured from the date of hire, calendar year, July 1 or something else. However, the prudent approach is to measure the year beginning with July 1, 2015 for all current employees, and to measure the year beginning with the employee’s hire date for employees hired after July 1, 2015. Therefore, current employees would receive 3 sick days on July 1, 2015 and employees hired after July 1, 2015 would receive 3 sick days beginning on their hire date.

As with the accrual method, employers who use a lump-sum approach may prohibit new hires from using any portion of their 3 days or 24 hours until the 90th day of their employment.

Existing Policy Meets Minimum Requirements
Employers do not need to provide additional paid sick leave, if the employer’s current paid sick leave, paid time off or other paid leave policy makes available to employees an amount of leave that may be used for the same purposes and under the same conditions as those specified in the PSLL. Specifically, the employer’s policy must either:

  1. Satisfy the accrual, carry over and use requirements of the PSLL; or
  2. Provide at least 3 days or 24 hours of paid sick leave (or equivalent paid leave or paid time off) for each employee to use within a 12-month period, a year of employment or a calendar year.6

Regardless of the method an employer chooses to use, the employer must allow employees to use their paid sick leave in not more than 2-hour increments. Paid sick leave ordinarily does not have to be paid out upon an employee’s termination of employment. However, for employers who offer a general paid time off (PTO) policy which allows an employee to take time off for illness or vacation, among other reasons, then the employer must pay out all accrued and unused PTO to the employee when the employment relationship ends.

Key Takeaways for Employers 
Employers should review and if necessary, adjust their payroll and recordkeeping practices to:

  • Provide paid sick leave to existing and new employees in accordance with one of the methods above;
  • Adjust paystubs so they provide the amount of available sick leave on the employee’s pay stub or other document issued the same day as a paycheck; and
  • Keep payroll records documenting hours worked and paid sick days accrued and used by an employee.

Employers must be mindful that, as with other leave laws, retaliation or discrimination against an employee who requests or uses paid sick leave is prohibited. 

California’s PSLL is somewhat complex, containing many subtleties and a few ambiguities. Employers should review and if necessary, update their policies and practices to ensure compliance. Noncompliance with the PSLL can be costly for employers. 

Additionally, managers and HR personnel should be trained to understand the employee’s rights under the Act, including identifying reasonable requests for sick leave. Employers may want to consider implementing a reporting and complaint procedure whereby, for example, employees who are denied paid sick leave may report the denial to HR and ask for a confirmation that the denial was proper.

1Certain protections under the PSLL went into effect on January 1, 2015. These include posting the required Labor Commissioner poster (in a conspicuous place) in the workplace and providing nonexempt employees with updated “wage theft” notices as required under CA Labor Code Section 2810.5.

2Employer is broadly defined as “any person employing another under any appointment or contract of hire and includes the state, political subdivision of the state, and municipalities.” Labor Code Section 245.5(b).

3CA Labor Code Section 246(a) establishes that employees not covered by the Act include: 1) Employees covered by a collective bargaining agreement that provides sick leave, has binding arbitration and meets other requirements; 2) Construction employees covered by a collective bargaining agreement (containing certain provisions); 3) Providers of publicly funded in-home supportive services under certain sections of the Welfare and Institutions Code; and 4) Certain air carrier employees who are provided time off equal to or exceeding that provided by the new law. CA Labor Code § 245.5(a).

4Notably, the FMLA/CFRA and the CA kin care laws do not include grandparents, grandchildren or siblings in the definition of family member.

5See CA Labor Code Section 246.5(a)(2).

6See CA Labor Code § 246(e).