Pursuant to the recently enacted Healthy Workplaces, Healthy Families Act of 2014, employers will be required to provide paid sick leave to California employees effective beginning July 1, 2015. This new law will affect all employers, regardless of size, who have employees working in California.

Paid Sick Time Scope

The new California paid sick time accrual may be used by covered employees for:

  • “Diagnosis, care or treatment of an existing health condition of, or preventive care for, an employee or an employee’s family member,” or
  • Leave needed if a victim of domestic violence, sexual assault or stalking.

Under the new California Labor Code §§ 245, et seq., an employee who, on or after July 1, 2015, works in California 30 or more days within a year from the commencement of employment is entitled to paid sick days, which must accrue at a rate of no less than one (1) hour for every 30 hours worked. By including anyemployee working 30 or more days in a year, the law appears to apply to full-time, part-time and even temporary or seasonal workers that otherwise meet this standard. However, an employee is not entitled to use his or her accrued paid sick days until the 90th day of employment.

Carryover and Use

The new law requires that accrued paid sick leave carry over to the following year of employment (i.e., employers are not allowed to institute a “use it or lose it” policy with respect to such paid time). However, with respect to the use of accrued time (whether regularly accrued or carried over), employers:

  • May limit an employee’s use of paid sick days to 24 hours or three (3) days in each year of employment.
  • May limit an employee’s total accrual of paid sick leave to 48 hours or six (6) days.
  • Are not required to provide compensation to an employee for accrued, unused paid sick days upon the employee’s separation from employment (unlike accrued paid vacation under California law).

Recordkeeping, Posting and Notice

The new law establishes additional recordkeeping, posting and notice requirements. Employers will have to keep at least three years of records documenting the hours worked and paid sick days accrued and used by an employee. Employers also will be required to post notice about sick pay. Finally, an amendment to Labor Code § 2810.5 will require employers to provide employees with written notice upon hire about an employee’s rights with regard to sick pay in California.

Integration with Existing Policies

Employers who already have a paid leave or paid time-off policy are not required to provide additional paid sick days, so long as the employer makes available an amount of leave that may be used for the same purposes and under the same conditions as set forth under the new law. However, even employers with existing paid time-off policies will have to comply with the new notice and recordkeeping obligations discussed above.

All employers covered by this new California law also will need to integrate the new law with their current policies, including those related to Labor Code § 233 (“kin care leave”), family medical leave, and all other protected leaves that California provides employees. For example, established paid sick leave policies that meet the requirements of Labor Code § 233 may need amendment, as the new law extends an employee’s right to use paid sick leave benefits to care for a broader range of family members than Section 233 provides, including grandparents, grandchildren and siblings. The new law’s expansive definition of “family member” similarly goes beyond the definitions in place under the federal Family and Medical Leave Act (FMLA) and the California Family Rights Act (CFRA), such that employees may be entitled to paid sick leave that is not chargeable to their unpaid FMLA or CFRA entitlements in some circumstances.

Action Steps

Violation of these new statutory requirements can result in significant administrative fines, civil penalties, and awards of attorney’s fees and costs against employers. Employers with California employees should carefully review any sick leave or paid time-off policies, as well as wage statement practices, new-hire paperwork, workplace postings and recordkeeping procedures for their full- and part-time employees in the state. Employers also should consult with legal counsel to ensure compliance with the nuances of the new legislation.