California Enacts Sick Leave Law

Executive Summary

Coverage:  All employers (with limited exceptions) regardless of size with employees in California.

Effective Date: July 1, 2015.

Overview:  With the enactment of the Healthy Workplaces, Healthy Families Act of 2014 (AB1522), California has become the second state in the nation, after Connecticut, to mandate employers provide their employees, including part-time and temporary workers, paid sick leave.

Action Required:  None at this time.  We anticipate that the state will release additional guidance regarding the Act prior to the effective date along with revised Wage Theft Act notices and a model poster.  We will also be updating our model California handbook with a California specific sick leave policy prior to the effective date. As your trusted compliance partner we will continue to keep you informed as these resources become available. A full reading of the law is available here.

The Details

Sick Time Accrual

The Act requires that employers, public or private and regardless of size, permit employees to accrue paid sick time at the rate of at least one hour for every 30 hours worked.

Employee Eligibility

Starting July 1, 2015 an employee is entitled to accrue sick leave if the individual works, in California, for at least 30 days within a year from the commencement of employment. This is measured from July 1, 2015.  For example, if an employee hired June 1, 2015, the earliest that accrual might begin is July 31, 2015 (assuming the employee works every day in July).  Employees can use accrued sick days beginning on the 90th day of employment (this is measured from the actual date of hire; not from July 1, 2015).

Employees May Carry Over Earned But Unused Sick Leave and Employer’s May Limit Usage and Cap Accrual

An employer is permitted to limit an employee’s use of paid sick leave to 24 hours or three days in each year. Any accrued, unused sick leave beyond the 24 hours or any unused, accrued sick leave must carry over from year to year.

An employer also has the option of limiting employees’ total accrual of paid sick leave to 48 hours or six days, provided the employees’ rights to accrue and use paid sick leave are not “otherwise limited.”

Certain Employees Working under a Collective Bargaining Agreement and other Classes of Employees are Exempt

Employees working under a valid collective bargaining agreement that provides for similar paid sick time and who earn 30 percent more than the state minimum wage, among other terms of employment, are not covered by the Act. Also not covered by the Act are employees in the construction industry covered by a valid collective bargaining agreement, with similar required terms of employment as above including a regularly hourly rate of pay of not less than 30 percent more than the state minimum wage, entered into before January 1, 2015, or an employer in the construction industry which negotiates a collective bargaining agreement that expressly waives the requirements of the Act. The Act also exempts other classes of employees including providers of in-home supportive services (as defined by the state Welfare and Institutions Code) and certain flight deck or cabin crew members of air carriers subject to the federal Railway Labor Act.

Other key provisions of the new state law include:

• As indicated above, employees, who work in California for more than 30 days in a year after July 1, 2015, are eligible to accrue sick days under the Act. This could mean that employees who live outside of California, but who travel into California and perform work for more than 30 days in a year, could be eligible under the Act.
• An employer is not required to compensate an employee for accrued, unused paid sick days upon termination, resignation, retirement, or other separation from employment. However, employers using existing PTO policies (discussed below) to satisfy the sick leave requirement should recognize that state laws governing PTO (ex. requiring that any PTO caps to be reasonable and prohibiting forfeiture of earned unused PTO) will still apply.
• An employer is not required to provide additional sick days under the Act if it has a paid leave policy or paid time off policy which provides paid time off for the same purpose of the Act and under the same conditions and does either of the following: (1) satisfies the Act’s accrual, carry over and use requirements; or (2) provides for no less than 24 hours or three days of paid sick leave/paid time off each year or 12- month period.
• An employee can use accrued sick time for the diagnosis, care or treatment of an existing health condition of, or preventive care for, the employee or the employee’s family member. Family member is defined more broadly than the definition of Kin Care Leave at Labor Code 233. Under the Act, “Family member” means any of the following:
• Sick time can be used by an employee who is a victim of domestic violence, sexual assault or stalking for certain purposes.
• The employee must provide reasonable advance notice if the need to use paid sick leave is foreseeable. If not foreseeable, the employee must provide notice as soon as practicable.
• An employer may set a reasonable minimum increment, not to exceed two hours, for the use of paid sick leave.
• Employees who separate employment with a particular employer and are re-hired within one year by that same employer must have their accrued but unused paid sick leave bank reinstated and be allowed immediate use.
• An employer must provide an employee with written notice, on the itemized wage statement or in a separate writing, of the amount of paid sick leave available.
• An employer must display a poster about the Act that the Labor Commissioner will provide in the future. We will notify clients upon publication by the state. A willful violation of the posting requirement will subject the employer to a civil penalty of not more than $100 for each offense.
• The Act also amends Labor Code 2810.5 dealing with the Wage Theft Prevention Act Notice. Thus, employers must update their Wage Theft Prevention Act Notice form used upon hire for non-exempt employees and during employment when certain changes occur. We expect that the Labor Commissioner will update the state’s model forms prior to the effective date we will notify clients upon publication by the state. 
• An employer must keep for at least three years records documenting the hours worked and paid sick days accrued and used by the employee.

Reports of Sick Leave Usage

Clients can access current year information and produce a report of sick time allowed and taken by employees on My TotalSource^® by following these steps:

1. Log in to My TotalSource and open the Reporting tab
2. Click HR Reports
3. Click on the report name, "Allowed vs. Taken Report"

Clients can access historical information and produce a report of sick time allowed and taken by employees on My TotalSource by creating a Custom Template following these steps:

1. Log in to My TotalSource and open the Reporting tab
2. Click Configure Templates and create a custom sick allowed vs taken report                                                                      

1. Expand Accumulation Section

1. Select Sick Allowed and Sick Taken
   

2. Include any additional report fields as applicable; ie: Employee Name, File Number, etc
3. Save report name as “Sick History”

3.    Click Access Your Data.

4.    Select appropriate payroll weeks for historical reporting

5.    Select Template name from drop down “Sick History”

6.    Select Report Filter: All Employees

7.    Click Download Now

Note that where a client is utilizing PTO only tracking for time off reporting; sick allowed/ taken values are not available for downloading via My TotalSource.

Clients using ezLaborManager to track their accruals should have two default accrual reports available:  "Accrual Report" and "Employee Accrual Report."  Both reports provide information on the amount of time taken, accrued and the balances remaining for each employee.  Follow these steps to produce reports:

1.    Log in to ezLaborManager

2.    Choose Reports

3.    Choose Administrator Reports

4.    Choose to view either the Accrual Report or the Employee Accrual Report

If these reports do not exist in the Administrator Reports option (and accruals are being tracked in ezLaborManager) please email your ezLaborManager Support @ ezlmsupport@adp.com  to have them added.

Anti-Retaliation

The Act prohibits an employer from denying an employee the right to use accrued sick days, discharging, threatening to discharge, demoting, suspending or otherwise discriminating against the employee for using or attempting to use accrued sick days or filing a complaint alleging a violation of the Act, cooperating in an investigation or prosecution of an alleged violation of the Act, or opposing a policy, practice or act prohibited by the Act. Employers with no fault attendance policies should consider revising such policies in light of this new law. We recommend sick days protected under the Act should not be counted as an unexcused absence under a no fault attendance policy.

The Act subjects an employer to a rebuttable presumption of unlawful retaliation if the employee was denied the right to use accrued sick days, discharged, threatened with discharge, demoted, suspended or otherwise discriminated against within 30 days of the employee’s filing a complaint with the Labor Commission or alleging a violation or cooperating in an investigation or prosecution of an alleged violation of the Act, or opposing a policy, practice or act prohibited by the Act.

Enforcement

The Labor Commissioner enforces the requirements of the Act and may order appropriate relief (including reinstatement, backpay, payment of sick days unlawfully withheld and administrative penalties) for violations. The Act contains a broad range of harsh penalties for violations, including but not limited to certain penalties up to $4,000, in addition to remuneration for the paid sick days denied. The Labor Commissioner or the Attorney General may bring a civil action on behalf of an aggrieved worker against anyone who violates the Act.

As always, please contact your Human Resource Business Partner if you have any questions.