Starting July 1, 2015, virtually all employers in California will be required to provide three days of paid sick leave each year under a new law signed by Gov. Jerry Brown last week. A.B. 1522, the “Healthy Workplaces, Healthy Families Act of 2014,”  will affect small and large employers alike, with only unionized workers, home health care providers and airline flight crews exempted from the mandate. It is anticipated that 6.5 million workers in the state, or 40 percent of California's workforce, previously without paid sick time, will benefit from the new law.

Under A.B. 1522, all employees, full and part time, will earn paid sick leave at a rate of one hour for every 30 hours worked and can begin using the accrued time after 90 days of employment. Employers are permitted to cap accrual of paid sick leave at six days and limit the employee’s use of paid sick days to three days per year, with the remaining time carrying over from year to year. However, employers are not required to pay out accrued sick time at termination. A small nuance that should not be overlooked is that the law applies to out-of-state employees that work in California 30 or more days within a calendar year. For example, an out-of-state employee who travels to the home office of his or her California employer one week every month will be covered by A.B. 1522.

Employees may use the paid sick time for their own health condition, caring for a family member, or if they are a victim of domestic violence. Existing law already requires employers that provide paid sick time to allow employees to use half of their yearly allotment for “kin care” (care of their sick child, parent, spouse or registered domestic partner). Under A.B. 1522, the definition of family member is expanded to include grandparents, grandchildren and siblings. Employers should revise sick time policies to reflect these broad rights of use.

In addition to accounting for and providing the accrued leave, employers are required to display posters telling employees of their right to paid sick days and informing them that retaliation for requesting or using paid sick days is illegal. Employers are also required to include the amount of paid sick leave accrued on employees’ itemized wage statements. Employers could face fines of up to $4,000 per day for withholding paid sick leave or violating the bill's requirements.

Although many California employers already provide at least three days of paid sick time, A.B. 1522 will impose additional administrative burdens on those employers, including:

  • The employee’s sick leave balance must now be included on itemized wage statements, or in another writing, on each pay day.
  • Accrued sick leave must carry over into the new year, subject to the cap of six days. Employers are permitted to avoid the administrative burdens of tracking accrual and carry over if three or more days of paid sick time are granted at the start of the year.
  • Records documenting the hours worked, and paid sick days accrued and used by an employee, must be retained for three years. Employees will have the right to inspect these records.
  • Former employees that are re-hired within one year are entitled to have previously accrued and unused paid sick days be reinstated.

The passage of the law makes California the second state in the nation, after Connecticut, to subject employers to paid sick leave mandates. However, Connecticut’s law, which took effect in 2012, applies only to larger employers with 50 or more workers and covers only “service workers.”

The new California requirement follows the lead set by San Francisco when, in 2006, it became the first locality in the nation to require employers to provide paid sick leave for all employees working within the county. Other cities, including New York City, the District of Columbia, Seattle, Portland, San Diego and five cities in New Jersey have followed suit. Legislation has been introduced and groups are campaigning for laws to make paid sick leave mandatory in at least 20 other states.