California’s Healthy Workplace, Healthy Families Act (Paid Sick Leave Law) went into effect on July 1, 2015, and emergency legislation to clarify some of the provisions was signed into law by Governor Brown on July 13th.  This new law provides paid leave to employees who need to take time from work to deal with health-related issues or to take care of a loved one.

Who Does This Law Impact?

The Paid Sick Leave Law applies to:

  • Any employer with at least one (1) employee in the state of California.
  • Any employee who works in California for thirty (30) or more days within a year.
  • Employees who are part-time, full-time, seasonal or temporary / contract workers.

What Do Employers Need to Do?

Here is a brief summary of some of the things employers need to know in order to be prepared for and in compliance with this new employment law:

  • Display a poster on the new Paid Sick Leave Law where employees may easily read it.
  • Provide written notice to employees with paid sick leave rights at the time of hire.  If you have a handbook, the policy should be included in the Employee Handbook.
  • Elect and implement one or a combination of the three methods: the accrual, lump sum and/or hybrid method.
  • Allow eligible employees to use accrued paid sick leave upon reasonable request.
  • Show how many days of paid sick leave an employee has available, via the pay stub.
  • Reflect total paid sick leave hours available on every pay stub, every pay period.
  • Determine the rate of pay for paid sick leave for employees.
  • Retain records of paid sick leave hours granted / accrued and used for three (3) years.
  • Unused and accrued paid sick leave does not have to be cashed out at termination.

When Can An Employee Take Paid Sick Leave?

An employee can take paid sick leave for the employee or a family member for preventive care or care of an existing health condition or for specified purposes related to other conditions.

Three Methods – Front Load / Lump Sum, Accrual or Hybrid

Employers have three methods to choose from when establishing a paid sick leave policy and may select one method for all employees or assign methods based on different categories of employees (e.g., management versus non-management, full time versus part time, temporary, etc.).

Paid Sick Leave Law Grant Method Chart

Front Load / Lump Sum Grant Method

Annual Grant: A minimum of 24 hours or three (3) work days, which must be granted on the same day every year.

Accrual Method: Not applicable.

Usage: Sick leave may be used when granted for current employees and upon completion of ninety (90) days of employment for new hires.

Usage Limit: Not applicable.

Carry Over:  No carry over required.  Unused hours may be forfeited on the anniversary date and new hours are granted.

Pay Stub Reporting: Employers do NOT have to track and report sick pay accrual with each paycheck, but usage must be accounted for and reported on the pay stub.

Accrual Method

Annual Grant: A minimum of 48 hours or six (6) work days.

Accrual Method: One (1) hour of paid sick leave for every thirty (30) hours an employee works.

Usage: Sick leave may be used upon accrual for current employees and upon completion of ninety (90) days of employment for new hires.

Usage Limit: Employers may impose a limit of three (3) days, or 24 hours, on the amount of paid sick leave an employee may use during any 12-month period.

Carry Over:  Yes, accrued, unused hours MUST carry over.  The employer may place a cap on accrued hours at up to 48 hours, or six (6) works days per year.

Pay Stub Reporting: Employers MUST carefully track accrual and report sick pay earnings and usage on the employee’s pay stub.

Hybrid Method

Annual Grant: A minimum of 48 hours or six (6) work days.

Accrual Method: At a rate determined by the employer such that an employee accrues at least 24 hours in four (4) months of employment.  (Note: This is not an option for employees working a part-time schedule.)

Usage: Sick leave may be used upon accrual for current employees and upon completion of ninety (90) days of employment for new hires.

Usage Limit: Employers may impose a limit of three (3) days, or 24 hours, on the amount of paid sick leave an employee may use during any 12-month period.

Carry Over:  Yes, accrued, unused hours MUST carry over.  The employer may place a cap on accrued hours at up to 48 hours, or six (6) works days per year.

Pay Stub Reporting: Employers do NOT have to track actual hours worked but may track paid sick leave based on per week or per pay period.  Employers MUST still carefully track accrual and report sick pay earnings and usage on the employee’s pay stub.

How to Calculate Paid Sick Leave

Employers must pay Paid Sick Leave using the employee’s regular rate of pay, or if employees earn commissions or other monies in addition to the regular rate, this must be factored in by employers.