Just weeks before California’s Paid Sick Leave Law fully takes effect on July 1, 2015, the California Legislature has formulated amendments to what is officially known as the Healthy Workplaces, Healthy Families Act of 2014 (a frequent subject of our blogs).
The proposed amendments, appearing in Assembly Bill 304, would treat some of the Paid Sick Leave Law’s worst maladies. To read the full text of the proposed amendments, click here.
The amendments should be chicken soup for the soul of employers who have found cold comfort in the FAQs issued by the Labor Commissioner. (See CA Paid Sick Leave Update). And AB 304, first introduced in February 2015, now has an “urgency clause” (added on June 2), which would make the amendments effective as soon as Governor Brown signs the bill. Without the urgency clause, the amendments would not be effective until January 2016.
The key proposed amendments include:
Which accrual method? Current law mandates that employees accrue paid sick leave at the rate of one hour for every 30 hours worked. The proposed amendments would permit employers to use a different accrual method, as long as the accrual is on a regular basis so that employees have at least 24 hours of accrued sick time or other paid time off by the 120th day of employment each calendar year (or other 12-month basis).
Work 30 days? For whom? Current law applies to all employees who have worked for at least 30 days in California. The proposed amendments would clarify that the employee must work for the same employer for at least 30 days within the previous 12 months to be eligible to accrue paid sick leave with that employer.
Delayed implementation of notice requirements for some industries. The law’s mandate that all employers comply with the Wage Theft Notice requirement still stands; but the proposed amendments would allow employers covered by Wage Order 11 (broadcasting industry) and Wage Order 12 (motion picture industry) to delay compliance with this requirement.
Unlimited sick time? Current law requires employers to inform employees of their balance of available paid sick time, either on a paycheck stub or a separate writing accompanying the paycheck or paycheck stub. This requirement has puzzled employers who provide unlimited sick time or paid time off. The proposed amendments would allow those employers to simply indicate “unlimited” on the relevant document.
Calculating pay when sick. For employees with fluctuating pay rates (such as those paid commissions or piece rates), current law requires employers to divide the total pay within the last 90 days by the total hours worked to calculate an hourly rate for paid sick leave. The proposed amendments would dispense with this 90-day look back method and permit a more sensible approach: for non-exempt employees, use the same regular rate used for overtime pay; and for exempt employees, use the same rate used for other forms of paid leave (such as vacation).
Reinstating sick time balances. While employers need not pay accrued unused sick leave at the time of termination, a question for those that do (for example, employers that combine PTO and sick leave banks) is, “What if an employee is paid out for accrued sick leave at the time of termination, but is rehired within 12 months? Must employers reinstate the already paid-out balance?” According to the proposed amendments, the answer, thankfully, would be “No!” Employers need not reinstate paid sick time balances for discharged employees who return within a year, where the employee was already paid out for that time.
Record keeping. Under current law, employers must record and keep records of hours worked and sick time accrued and used during the last three years. The proposed amendments would clarify that employers need not ask for or record the purposes for which an employee uses sick leave or paid time off.
Before you consider the Sick Act healed … : The recent introduction of an urgency clause is the fifth amendment to the proposed clean-up legislation since its introduction in February, so stay tuned for notice of further changes. And if you have any questions about the current status of the law and what’s coming down the pike, please reach out to our California Counseling and Workplace Solutions team for additional guidance.