On July 13, 2015, California enacted emergency legislation (the Amendment) to revise its paid sick leave law, known as the “Healthy Workplaces, Healthy Families Act of 2014” (the Act). The Act requires all California employers to provide paid sick leave to all employees who meet certain eligibility requirements. For more information about the Act, see our previous alerts issued on September 3, 2014 andJanuary 6, 2015.
The Amendment takes effect immediately. Key changes include:
As stated above, the Act went into effect on July 1, 2015, and the Amendment is effective immediately. Employers should take the time to review their sick leave and/or paid time off policies to ensure compliance with the Act, as amended. Employers should also expect updated guidance from the California Department of Industrial Relations on the above issues soon.
- 30 days of prior work must be for the “same employer.”The Act previously required employees to work at least 30 days in California to qualify for paid sick leave, but did not state that these 30 days of work had to be for the same employer. The Amendment specifies that these 30 days of work must be for the same employer.
- New accrual methods. The Act originally provided for employees to accrue paid sick leave “at a rate of not less than one hour per every 30 hours worked.” The Amendment clarifies that “[a]n employer may use a different accrual method, other than providing one hour per every 30 hours worked, provided that the accrual is on a regular basis so that an employee has no less than 24 hours of accrued sick leave or paid time off by the 120th calendar day of employment or each calendar year, or in each 12-month period.” Alternatively, “[a]n employer may satisfy the accrual requirements . . . by providing not less than 24 hours or three days of paid sick leave that is available to the employee to use by the completion of his or her 120th calendar day of employment.”
- Rate at which sick leave is paid. The Amendment clarifies how employers should calculate the rate at which employees will be paid for sick leave. For exempt employees, an employer shall calculate this rate “in the same manner as the employer calculates wages for other forms of paid leave time.” For nonexempt employees, an employer can choose to either calculate the rate of pay (1) “as the regular rate of pay for the workweek in which the employee uses paid sick time, whether or not the employee actually works overtime in that workweek”; or (2) “by dividing the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment.”
- Measuring the “year.” The Act originally defined a “year”—for purposes of accrual, use, and carryover of paid sick leave—as either the period after the July 1 effective date of the Act or an employee’s “year of employment.” This definition did not allow an employer to track accrual, use, and carryover on a calendar-year basis. The Amendment clarifies that the employer may define the “year” as a “year of employment, calendar year, or 12-month period.”
- Reinstatement of paid time off upon re-hire. The Act stated that employees who have separated from an employer and been rehired within one year from the date of separation must have their accrued paid sick leave reinstated. The Amendment maintains this requirement, but clarifies that an employer need not reinstate paid time off if it previously paid out such leave at the time of termination of employment.
- Notifying employees of “unlimited” leave available. The Act requires employers to provide each of their employees with written notice (such as an itemized wage statement) that “sets forth the amount of paid sick leave available, or paid time off leave an employer provides in lieu of sick leave.” The Amendment clarifies that if an employer provides unlimited paid sick leave or paid time off, it may satisfy the notice requirement by indicating “unlimited” on the employee’s paystub or wage statement.
- No obligation to inquire into purpose of employee’s sick leave request. The Amendment states that an employer need not inquire into or keep records of the purposes for which an employee uses paid sick leave or paid time off. In other words, an employer has no obligation to determine why an employee is using paid sick leave or paid time off.
- Pre-January 1, 2015 policies. If an employer has a paid sick leave or paid time off policy that applied to employees before January 1, 2015, the employer need not provide additional paid sick days if: (1) accrual under the employer’s policy is on a regular basis; and (2) each employee—whether hired before or after January 1, 2015—has no less than one day or eight hours of accrued sick leave or paid time off within three months of employment of each calendar year or 12-month period, and the employee was eligible to earn at least three days or 24 hours of sick leave or paid time off within nine months of employment.