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Preparing For Californias New Paid Sick Leave Law

AB 1522, titled the Healthy Workplaces,


Healthy Families Act of 2014, requires that
virtually all California employers provide a
minimum amount of paid sick leave to their
employees.
The new law also contains
requirements for the accrual and use of paid
sick leave. Employers with existing sick leave
or PTO policies should make sure the policies
comply with the minimum requirements of the
new law. Companies who do not provide paid
sick leave will have to implement a compliant
policy. This Alert provides an overview of the
requirements of new paid sick leave law.

When the Law Takes Effect


The right to accrue and take paid sick leave
goes into effect on July 1, 2015. Companies
should ensure that they have a compliant sick
leave or PTO policy in place by then.
Effective January 1, 2015, employers must
post information regarding the paid sick leave
law. A copy of the poster is available at:
www.dir.ca.gov/dlse/Publications/Paid_Sick_
Days_Poster_Template_(11_2014).pdf. The
all-in-one poster for state and federal labor
laws should include the required information.
Also, as of January 1, 2015, the Notice to
Employee form that is given to new hires
(excluding exempt and public sector
employees, and employees covered by a
qualifying collective bargaining agreement)
has a section about paid sick leave. The
updated Notice to Employee is available at:
www.dir.ca.gov/dlse/Publications/LC_2810.5
_Notice_(Revised-11_2014).pdf.

Right to Paid Sick Leave


With very limited exceptions, employees are
eligible for paid sick leave if they work in
California for at least 30 days within a year.
This applies to all employees, whether fulltime, part-time, temporary, seasonal or per
January 2015

diem. It also applies to both exempt and nonexempt employees.

Accrual and Use of Paid Sick Leave


The paid sick leave law has three distinct
concepts: accrual, use and carryover.
Accrual: At a minimum, paid sick leave is
earned at the rate of at least one hour for every
30 hours worked. The employer can limit the
amount of earned sick leave an employee may
accrue to 6 days or 48 hours, whichever is
greater. Exempt employees are deemed to
work 40 hours per workweek or their normal
workweek if less than 40 hours.
For qualifying existing employees, sick leave
accrual begins on July 1, 2015; for employees
hired after July 1, accrual begins on the first
day of employment. However, employees are
not entitled to take paid sick leave until their
90th day of employment (and working at least
30 days in California within a year).
For employees hired before July 1, 2015, time
worked starting January 1, 2015 counts toward
the 30 and 90-day requirements.
Use: The amount of paid sick leave that can
be used in one year can be limited to 3 days or
24 hours, whichever is greater. Employees
can be required to take paid sick leave in
minimum increments of at least two hours.
Carryover:
Regardless of limits on the
amount of sick leave that can be used in one
year, employees have the right to carry over
unused accrued sick leave from year to year
(up to accrual cap if part of sick leave policy).
As an alternative, companies can avoid these
accrual and carryover obligations by providing
employees the full amount of annual sick
leave (minimum of 3 days or 24 hours) at the
beginning of each calendar year.

Preparing For Californias New Paid Sick Leave Law


Taking Paid Sick Leave

Paid Time Off (PTO) Policies

Paid sick leave may be used for the diagnosis,


care, or treatment of an existing health
condition of, or preventative care for, an
employee or the employees family member.
Family members are defined as a child, parent,
spouse/domestic
partner,
grandparent,
grandchild, sibling, or the spouse/domestic
partners parent. Also, employees who are
victims of domestic violence, sexual assault,
or stalking are entitled to use paid sick leave
to obtain certain services.

An employer is not required to provide


additional paid sick days if the employer has a
compliant PTO policy. To be compliant, the
PTO policy must provide leave that may be
used for the same purposes and under the
same conditions as sick leave and either:
(1) satisfies the laws accrual, carry over, and
use requirements; or (2) puts the full amount
of leave into the employees leave bank at the
beginning of each year of employment in
accordance with the PTO policy.

Employees can provide either oral or written


notice of the need to use paid sick leave.
Reasonable advance notice must be provided
if the need for the leave is foreseeable;
otherwise notice must be provided as soon as
practicable. Employees cannot be required to
search for, or find, a replacement worker to
cover his or her shift as a condition of using
paid sick leave.

Recordkeeping Requirements

Being Paid for Sick Leave


Sick leave should be paid at the employees
regular hourly rate.
If the hourly rate
fluctuates (for example, employees paid on a
commission or piece rate basis) the hourly rate
is determined by dividing total compensation
for the previous 90 days (not including
overtime premium pay) by the number of
hours worked.
Payment for sick leave taken must be made no
later than the payday for the next regular
payroll period after the leave was taken.
Accrued sick leave does not need be paid out
at the time of termination, but employees who
separate from employment and return within
one year are entitled to reinstatement of their
unused accrued paid sick leave.

January 2015

The amount of sick leave available to


employees must be shown on pay stubs or a
separate writing provided the same day as the
paycheck (for both exempt and non-exempt
employees). Records tracking sick leave
earned and used must be kept by employers
and maintained for a minimum of 3 years.

Implementation
Right now, employers should make sure they
have the required posting up and are using the
revised Notice to Employee. Next, they
should make sure their sick leave or PTO
policy is compliant, and if not, a revised
policy should be in place by July 1, 2015. If
employers do not have a sick leave policy,
they should have a compliant policy in effect
by July 1, 2015.
For more information, or assistance in
reviewing existing policies or established a
compliant paid sick leave policy, please
contact:
Jeffrey Dinkin
(805) 730-6820
(949) 725-4098
(424) 214-7016
jdinkin@sycr.com

Nicole Zajack
(424) 214-7017
nzajack@sycr.com