Significant amendments to California’s new Paid Sick Leave Law, the Healthy Workplace, Healthy Families Act of 2014, went into effect immediately upon Governor Brown’s signature on July 13, 2015.

The amendments include the following:

Clarification of the 30-Day Rule

The Paid Sick Leave Law previously applied to all employees who worked 30 or more days in California within a year from the commencement of employment.

The amendments clarify that an employee must work for the same employer for at least 30 days within the previous 12 months to be eligible to accrue paid sick leave with that employer.

(Cal. Lab. Code 246(a).)

Accrual Method

The Paid Sick Leave Law previously required employees to accrue paid sick leave at the rate of 1 hour for every 30 hours worked.

The amendments permit employers to use a different accrual method, so long as the accrual is on a regular basis and the employee accrues no less than 24 hours of sick leave or paid time off (“PTO”) by the 120th calendar day of employment per calendar year or 12-month basis.

(Cal. Lab. Code 246(b)(3).)

Safe Harbor for Pre-Existing Policy

The amendments provide a new safe harbor for sick leave and PTO policies in existence prior to January 1, 2015.

An employer complies with the law if it continues to offer a pre-existing plan that provides PTO accrual on a regular basis at a rate of no less than 1 day or 8 hours of accrued sick leave or PTO within 3 months of employment each calendar year or 12-month period, and the employee is eligible to earn at least 3 days or 24 hours of sick leave or PTO within 9 months of employment.  If an employer changes its pre-existing accrual method, it must comply with the accrual method set forth in the sick leave law or front-load the leave and provide 24 hours or 3 days of sick leave at the beginning of each year.

(Cal. Lab. Code 246(e)(2).)

Reinstated Sick Leave

The Paid Sick Leave Law requires employers to reinstate accrued sick leave balances to employees who return to work within one year of discharge.

The amendments provide that an employer is not required to reinstate accrued sick leave to an employee if the employee was paid out at the time of termination, resignation, or separation.

(Cal. Lab. Code 246(f)(2).)

Delayed Notice Requirement for Some Industries

The Paid Sick Leave Law requires employers to provide the available sick leave balance on each wage statement or other document provided on each pay date.

The amendments delay this requirement for employers covered by Wage Order 11 (which covers the broadcasting industry) and Wage Order 12 (which covers the motion picture industry) until January 21, 2016.

(Cal. Lab. Code 246(h).)

Notice on Wage Statement for “Unlimited” Sick Leave

The Paid Sick Leave Law requires employers to inform employees of their balance of available paid sick leave, either on a wage statement or a separate writing accompanying the statement.

The amendments permit an employer who provides unlimited sick leave to its employees to satisfy notice requirements by indicating “unlimited” on the employee’s itemized wage statement.

(Cal. Lab. Code 246(h).)

Rate of Pay Calculation

When the law was originally passed, the rate of pay was to be calculated based upon an employee’s hourly rate. For employees who earn different hourly rates of pay, are paid by commission or piece rate, or are non-exempt salaried employees, the rate of pay was calculated based upon the wages paid, not including overtime premium pay, and the hours worked in the full pay periods that the employee worked during the prior 90 days.

The amendments provide that:

  1. For non-exempt employees, employers may choose one of two options: (a) calculate paid sick leave in the same manner as the regular rate of pay for the workweek in which the employee uses the paid sick leave, or, (b) calculate paid sick leave by dividing the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked during the full pay periods that the employee worked during the prior 90 days.
  2. For exempt employees, paid sick leave is calculated in the same manner as the employer calculates wages for other forms of paid leave time.

(Cal. Lab. Code 246(k).)

Recordkeeping

The Paid Sick Leave Law requires an employer to keep records for 3 years documenting the hours worked and paid sick leave accrued and used by an employee and to make those records available to the Labor Commissioner upon request.

The amendments provide that the employer has no obligation to inquire into or record the purposes for which an employee uses sick leave or PTO.

(Cal. Lab. Code 247.5(b).)