Beginning July 1, 2015, employees who work in California for 30 days or more within a year will accrue sick pay thanks to the Healthy Workplaces, Healthy Families Act of 2014 (the Act). The Act, signed by Governor Jerry Brown on September 10, 2014, applies to employers regardless of size, with only a few enumerated categories of employees ineligible for leave. Under the law, employees accrue sick pay at no less than one hour for every 30 hours worked and may begin using accrued paid sick days on their 90th day of employment. For example, an individual hired on July 1, 2015, would begin accruing sick leave on July 31, 2015, and be entitled to use that leave as of September 29, 2015.
While the employee determines how much paid sick leave he or she needs, the law does require the employee to provide "reasonable" advance notification when leave is foreseeable and notice "as soon as practicable" when it is unforeseeable. Employers can set a reasonable minimum increment for the use of paid sick leave, but the designated increment cannot exceed two hours. Not surprisingly, the law prohibits discrimination and retaliation against employees for using accrued sick days. Further, the Labor Commissioner may award reinstatement, back pay, payment for sick days withheld and payment of an administrative penalty for violations.
Employers that already provide paid sick leave (or paid time off), subject to certain requirements, need not provide "additional" paid sick days where the existing policy (i) satisfies the new law's accrual, carryover and use requirements; or (ii) provides at least 24 hours or three days of paid sick leave for each year of employment.
As with vacation, accrued sick days carry over to the following year of employment. An employer may, however, cap paid sick leave at 24 hours or three days in each year of employment. Employers may also limit an employee's total carry over accrual to 48 hours or six days. Employers may lend paid sick days to an employee before they are accrued and, where an employer provides the full amount of sick leave at the beginning of each year, no accrual carryover is required.
Unlike vacation time, employers are not required to compensate employees for unused sick days upon termination. If an employer combines vacation and sick time into a paid time-off bank, however, it must pay out the accrued but unused PTO upon termination. In the event an employee is rehired within one year of his or her termination date, the employee's previously unused balance must be reinstated and available for use.
Employers should take care to comply with a series of new and/or revised requirements to provide or post information regarding employee entitlement to paid sick leave and related rights. In addition to administrative penalties for noncompliance, employers can expect plaintiffs' attorneys to pursue class action claims based on any alleged failure to provide the required information. Included among the new requirements are the following:
- The Wage Theft Prevention Act of 2011 will now require notices to include new language advising employees of their right to accrue and use paid sick-leave, be free from retaliation, and file a complaint for violations of the law. The Labor Commissioner will make available compliance notices under this section.
- Under Labor Code section 226, employers must provide employees with information detailing the amount of paid sick leave available on either the employee's itemized wage statement or in a separate writing provided on the designated pay date with the employee's payment of wages.
- Employers must display a poster notifying employees of their paid sick-leave rights. Willful violation of the posting requirements subjects the employer to a penalty of not more than $100 per offense.
- Labor Code section 247.5 will require employers to retain, for at least three years, records documenting the hours worked, paid sick days accrued and paid sick days used by each employee. These records may be inspected by an employee or the Labor Commissioner.
Given the broad scope and reach of the Healthy Workplaces, Healthy Families Act, employers should review their policies and procedures before the law takes effect, ensure those individuals responsible for administering these policies understand these new obligations and confirm they are complying with the various notice and posting requirements.