With the passing of AB 1522, California became the second state in the nation to require employers to provide paid sick leave to employees. The Healthy Workplaces, Healthy Families Act of 2014, which takes effect on July 1, 2015, requires employers to provide at least three (3) paid sick days (24 hours) each year to each employee. All employers are covered by the new law—public and private, large and small, for profit and non-profit. The law provides paid sick leave to all employees who work in California for 30 or more days within a year from the date of hire, except employees covered by a collective bargaining agreement that provides sick leave and meets other requirements, construction employees under a collective bargaining agreement, providers of in-home supportive services, and air carrier employees who receive comparable time off. Both exempt and non-exempt employees are covered by the law, including temporary, part-time, seasonal employees and out-of-state employees. The law provides employers with two options for providing sick leave: the accrual method or the lump-sum method.
Under the accrual method, employees earn paid sick leave at a rate of one (1) hour for every 30 hours worked, including both regular and overtime hours. An employer may cap sick leave accrual at six (6) days (48 hours), but can limit an employee’s use of paid sick leave to three (3) days (24 hours) per year. Employees must be able to carry over any accrued but unused sick time from year to year, but such accrued time does not have to be paid out at separation.
Under the lump-sum method, employees must be given at least three (3) days (24 hours) of paid sick leave at the beginning of the year that is available for immediate use. Carryover of unused sick leave to the following year is not required under the lump-sum method as employees receive three new sick leave days at the start of each year. Thus, the lump-sum method lessens the administrative burden on employers to track accrual and carry-over requirements.
Employers that have existing policies that provide paid sick leave are not required to provide additional paid time off if the existing policy allows use of paid sick leave for all of the same purposes and under the same conditions outlined by the new law and the policy either 1) satisfies the accrual, carry over, and use requirements of the new law, or 2) provides no less than three (3) days (24 hours) of paid sick leave, or equivalent paid leave or paid time off, for employee use for each year of employment or calendar year, or on a 12-month basis.
The law also mandates new notice and posting requirements. Effective July 1, 2015, each pay period, employers must provide employees with a pay day notice stating the amount of paid sick leave accrued and available, either on the already required itemized wage statement or in a separate document given with paychecks. In addition, the Division of Labor Standards Enforcement (DLSE) published a new sick leave poster and revised the Wage Theft Notice that employers are required to distribute to non-exempt employees. Although the new law does not go into effect until July 1, 2015, the new sick leave poster and revised Notice to Employee must be used by employers starting January 1, 2015.
A number of unanswered questions remain. For example, because the new law does not take effect until July 1, 2015, it is unclear whether employers utilizing the lump-sum method should grant employees the three (3) or more paid sick days at the start of the year on January 1, 2015 or when the law takes effect on July 1, 2015. Furthermore, it is not clear whether employers may continue to request documentation that sick time has been used for a covered purpose, especially for any time taken after employees have used their three (3) days allowed by law. Although the new law states that an employee may not be terminated or retaliated against for using or requesting the use of accrued sick leave, it is silent about whether employers may require medical documentation from an employee to justify use of paid sick leave. The Federal Family Medical Leave Act and the California Family Rights Act require such medical documentation for medical absences. Employers should consult counsel before requiring documentation of illnesses or deciding between the accrual or lump-sum method.
