The State of California, pursuant to California’s Healthy Workplace Healthy Families Act of 2014 (AB 1522), requires employers, subject to certain limited exceptions, to provide full-time and part-time, and regular or temporary employees paid sick leave at their regular rate of pay. The new law applies to an employee who performs at least 30 days of work in California, even if that employee is headquartered outside of California. As of July 1, 2015, an employee accrues 1.0 hours of paid sick leave (“PSL”) for every 30.0 hours worked. This equates to just a fraction above 1.3 hours of PSL for exempt employees and most typical employees working 40.0 hours per week. An employer may impose a limit of paid sick leave an employee may take to a maximum of 24.0 hours (3 days) of PSL per year.

How Can an Employer Provide PSL?

An employer may provide PSL on either an “Accrual” or “Front Load” basis. Under the Front Load basis, the employer may provide an employee those 24.0 hours of PSL as a lump sum either at the beginning of the year, on the employee’s anniversary, or on a regular 12-month basis. The employer need not account for PSL accrued for the remainder of the year under this method and is not required to provide for carryover of PSL. However, the employer will need to track and display the employee’s usage on his or her wage statement or other written document.

If the employer provides PSL incrementally under the Accrual basis, then the employee may begin using his or her accrued PSL on the 90th calendar day of employment. The employer must account for the accrued time in wage statements and allow unused PSL to carry over to the next year.

Under the accrual method, an employee can carry over unused sick leave from one year to the next. However, an employer may limit or cap the amount of sick leave an employee may accrue to six (6) days or 48.0 hours. Best practices would dictate complete transparency about the amount of PSL accrued, PSL carried over, and PSL remaining for the employee, while rounding the fractional hours up in the employee’s favor.

Employers are free to maintain or adopt sick leave policies that are more generous to employees, as long as they meet the state minimal standards. Certain cities like Los Angeles, San Francisco, Oakland, and Long Beach have ordinances that are even more favorable to employees than the state law summarized in this article.

Under What Circumstances Can an Employee Use PSL?

Employees may use PSL for a variety of purposes generally related to the care of themselves or their family members, or related to the care of employees who have been the victim of domestic violence, sexual assault, or stalking. A verbal request for leave is sufficient.

How is PSL Paid?

PSL is paid at the employee’s hourly rate or effective hourly rate for exempt employees assuming a 40.0 hour work week. The employer may require that the employee use PSL in any increment not exceeding increments of 2.0 hours. PSL must be paid no later than the payday for the next regular payroll period after the sick leave was taken. Unlike vacation time, PSL is not “cashed out” when the employment relationship ends.

What Notices Must the Employer Provide?

Employers are required to provide proper notice to their employees about their PSL rights. As of July 8, 2015 (seven days after the statewide PSL policy is implemented), the employer must provide notice or other written documentation describing the PSL policy to employees. One of the easiest ways to give this notice is to provide the Department of Labor’s standardized form attached here for reference. This form must also be provided at the time of hire.

Employers must also display a poster about the PSL policy where employees can read it easily, such as in a lunch room. Employers can find a copy of this poster here.

Employers following the Accrual method must also keep a strict accounting of the PSL time their employees have accrued. Employers must disclose to their employees how many hours of sick leave they have available each pay period, which can be shown either on a pay stub, or other written document, as long as it is provided on the same day as the paycheck. Records of accrued PSL must be kept for at least three (3) years.