Some good news for employers may be coming out of the California Legislature.  AB 304, the bill intended to clean up a few of the more confusing parts of the paid sick leave law that takes effect on July 1, has won unanimous Assembly approval and is headed to the Senate.  

If it is approved by the Senate, the changes would take effect immediately upon Gov. Brown’s signature.  The current text of the bill may be found here. The original paid sick leave legislation (AB 1522) was especially difficult for hospitals and other employers that give employees premium pay for working evenings, weekends or other particular shifts.  Under the original scheme, an employer that paid these “shift differentials” would have to undertake a 90-day look-back to determine what rate of pay to use for sick pay benefits.  Few, if any, employers have automated time and payroll systems capable of handling these calculations.

AB 304 makes that process easier, allowing employers to either use the 90-day look-back method or simply pay out sick pay at the regular rate of pay for the workweek in which the sick time is used. Exempt employees’ paid sick time is calculated in the same manner as the employer calculates wages for other forms of paid leave time.

Additional changes under AB 304 would include:

  • Making it easier for employers with existing paid time off (PTO) programs to comply with the new sick time requirements;
  • Allowing employers to use accrual methods different from the “one hour per thirty hours worked” method, provided the accrual method meets certain requirements;
  • Clarifying that employers who have “unlimited” PTO or sick leave plans, can simply report “unlimited” on employees’ paystubs; and
  • Delaying the paystub reporting requirements until January 21, 2016 for employers in the broadcasting and motion picture industries.

Please note the changes described above are contained in the Assembly version of the bill, which could undergo additional changes in the Senate.  But given the 69-0 vote in the Assembly, we believe the bill should be able to move quickly through the Senate in time for passage before the Legislature’s July 17 summer break.