Our September 2014 client alert —“Paid Sick Leave Coming to California Next Year” (view here) — explained that the Healthy Workplaces, Healthy Families Act of 2014 takes effect January 1, 2015, and requires employers to provide up to three days of paid sick leave to most California employees, with accrued leave available for use beginning in July 2015. Since our alert, the California Division of Labor Standards Enforcement (“DLSE”) has published: (1) Frequently Asked Questions ("FAQ") that provide additional guidance on the new law, (2) a poster that employers may use to satisfy the statute’s workplace posting requirement, and (3) a revised Wage Theft Prevention Act Notice that includes the mandatory paid sick leave disclosures. As 2015 gets underway, now is the time to ensure your sick leave or paid time off policies comply with the new statutory requirements.
1. Paid Sick Leave Explained
While the DLSE's newly-issued FAQ doesn’t resolve all ambiguities with the new sick leave law, it does provide much needed guidance, such as:
- Effective Date Is January 1: The FAQ clarifies that all requirements of the new law take effect January 1, 2015, except that employees do not start to accrue and may not take paid sick leave until July 1, 2015 (or their date of hire if after July 1).
- Sick Leave Advances Are Permissible: Despite the July 1, 2015 start date, employers may elect to make paid sick leave available early (e.g., for ease of tracking, employers may elect to begin accruals on January 1, 2015).
- Employee Eligibility Starts January 1: An employee qualifies for paid sick leave by working for an employer on or after January 1, 2015 for at least 30 days within a year in California and by satisfying a 90-day employment period, which functions as a probationary period. Because these 30-day and 90-day periods commence on January 1, 2015, most employees will have satisfied the prerequisites as of July 1, 2015 and will be eligible to use paid sick leave immediately once they have sufficient accruals.
- Part-Time, Per Diem & Temporary Employees Are Covered: The new law covers part time, per diem and temporary employees, as well as employees of temporary staffing agencies. For these employees, “whoever is the employer or joint employer is required to provide paid sick leave to qualifying employees,” according to the DLSE.
- “Unlimited” Vacation Policies Have Limits: Employers with so-called “unlimited” time off or vacation policies must separately track sick leave accrual and use.
- “Year” Defined: For tracking purposes, the “year” will begin either July 1, 2015 for existing employees or the hire date for employees hired after July 1, 2015.
- Preventative Care Is A Permitted Use: Employees may use paid sick leave for their or a family member’s “preventative care,” which includes annual physicals or flu shots.
- Notice to Employer: Employers must allow employees to use the paid sick leave upon oral or written request, and employees cannot be required to find a replacement worker as a condition for using leave. If the need is foreseeable, employees must give “reasonable advance notice.” But where the need is unforeseeable, employees need only give notice as soon as practicable.
- Timing of Payment: An employer must pay for sick leave taken by employees no later than the payday for the next regular payroll period after the sick leave was used.
- Rate of Pay: Employees must be paid at their regularly hourly rate for sick leave usage. If employees' pay fluctuates — for example, if employees earn commissions or are paid a piece rate — their total compensation for the previous 90 days must be divided by the number of hours worked to calculate the rate of sick leave pay.
For more FAQs, click here.
2. Poster Requirement
The DLSE has now issued a poster that employers may use to meet the law’s workplace posting requirement beginning on January 1, 2015.
To see the required poster, click here.
Employers may elect to use their own poster, but at a minimum, the poster must disclose:
- that an employee is entitled to accrue, request, and use paid sick days;
- that retaliation or discrimination against an employee who requests paid sick days or uses paid sick days or both is prohibited; and
- that an employee has the right to file a complaint with the Labor Commissioner against an employer who retaliates or discriminates against an employee in connection with the sick leave law.
Note: Employers who intend to offer a paid time off (“PTO”) policy in lieu of paid sick leave should customize their posters to make clear how their policies are more generous than the statutory requirements, as well as to identify any restrictions that apply.
3. Amended Wage Theft Prevention Act Notice
The DLSE has also provided an amended Wage Theft Prevention Act Notice to be used with all non-exempt new hires after January 1, 2015. The amended notice contains required disclosures regarding the new sick leave law.
Though it is not clear whether such an obligation exists, the DLSE takes the position that the amended notice should be given to all non-exempt employees hired before January 1, 2015 “within seven days after the time of the changes.” We interpret this to mean within seven days of January 1, 2015.
For the amended notice, click here.