The new paid sick leave requirements for California employers go into effect January 1, 2024. The increase in paid sick leave that must be provided is the central element of the legislation. As of January 1st, employers must:
- Provide and allow employees to use at least 5 days or 40 hours of paid sick leave per year, whichever is greater (up from 3 days or 24 hours); and
- Where paid sick leave is accrued (as opposed to the frontloading lump sum method), employers can now limit an employee’s total accrued paid sick leave to 10 days or 80 hours, whichever is greater (up from 6 days or 48 hours).
Employers should also be aware of a number of other nuances in the new requirements. Fortunately, the California Labor Commissioner recently revised its Frequently Asked Questions to address the new paid sick leave requirements that are effective as of January 1, 2024. Those FAQs can be found here. Below is a discussion of questions our clients have been asking since the legislation passed in October.
- How should I handle the change to the new standard on January 1stwhen I don’t use a calendar year for sick leave accrual?
Under both the new and old sick leave law, employers can designate any consecutive 12-month period as their “year” for compliance purposes. But what if the “year” starts on July 1stor the employee’s anniversary date? The FAQ’s address this situation for employers whose paid sick leave policy is accrual-based as well as for employers whose policy uses the frontloading method where a lump sum of paid sick leave is provided at the start of the paid sick leave year.
- Accrual Method: If employees accrue leave at the rate of at least one hour for every 30 hours worked, employers must increase the temporary accrual cap on January 1stfrom the old standard - 48 hours or 6 days, to the new standard - 80 hours or 10 days (in both cases, whichever is greater). Both versions of the paid sick leave law allow limits on the annual use of sick leave. Where paid sick leave is accrued at a rate of at least 1 hour for every 30 hours worked, employees can now be limited to an annual use of paid sick leave of 5 days or 40 hours, whichever is greater (up from the prior limit of 3 days or 24 hours). If the employees accrue sick leave in a manner other than one hour for every thirty hours worked such as biweekly accrual, then accrual rates should be revised as necessary as discussed under number 5 below.
- Up-Front Method: For employers that frontload paid sick leave in a lump sum at the start of each sick leave year, the up-front allocation increases from the old standard - 24 hours or 3 days, to the new standard - 40 hours or 5 days (in both cases, whichever is greater). Starting January 1st, the employer can choose one of two ways to comply with this new requirement.
- One way is to give the employee two additional days of paid sick leave or another 16 hours, whichever is greater, if that employee previously had been provided 3 days or 24 hours of paid sick leave at the start of the year. However, if the lump sum amount of sick leave provided was already 5 days or 40 hours or more, then no additional paid sick leave needs to be provided.
- The other option is on January 1stgive that employee five days or 40 hours of paid sick leave, and change their paid sick leave year to January 1 to December 31. When using this option any unused paid sick leave hours would not carry over into 2024. For instance, if the employee had three days accrued prior to January 1st, they would end up with five days total on January 2nd, not eight. However, for employees whose lump sum allotment of paid sick leave was at least 5 days or 40 hours, no further action need be taken.
Regardless of which method an employer uses, if a paid sick leave policy includes an annual use cap, on January 1, 2024, that use cap must increase to at least 40 hours or 5 days (in both cases, whichever is greater).
2. How much sick leave do employees receive who work scheduled shifts longer than 8 hours?
Why does the paid sick leave law always phrase the paid sick leave entitlement as day or hours, whichever is greater? The FAQ’s clarify that an employee who regularly works 10 hour shifts is entitled to 50 hours of sick leave. The FAQs also clarify that the 50 hours can be used for 5 full days off work on paid sick leave or intermittent use of partial days off work up to 50 hours per paid sick leave year, or a combination of those options. The same principle applies to any regularly scheduled shift over 8 hours. Under the paid sick leave law, employees are entitled to 40 hours or 5 days of sick leave whichever is greater. For an employer working 10 hours shifts, 5 days of sick leave is greater than 40 hours.
3. Who decides how much sick leave an employee is permitted to use:
The FAQs make clear the employee decides how much paid sick leave they wish to use. However, the paid sick leave policy can require that employees take a minimum of at least 2 hours of paid sick leave at a time. If an employee chose not to use paid sick leave for time off work, that is a choice they can make. But the paid sick leave law does not protect time off work when paid sick leave is not used even if the absence is for a reason covered under the paid sick leave law. The FAQs states: “The paid sick leave law does not ‘protect’ all time off taken by an employee for illness or related purposes; it ‘protects’ only an employee’s accrued and available paid sick leave as specified in the statute.” To further clarify, “Only time that is properly taken as accrued paid sick leave is protected from disciplinary action. The same would be true if the employee had a full eight-hour unscheduled absence, but only had available four hours of accrued paid sick leave. The portion of the unscheduled absence not covered by accrued paid sick leave could be subject to disciplinary action under the employer’s attendance policy.”
4. Can I request a doctor’s note for sick leave?
Under the new paid sick leave law, “an employer is not obligated to inquire into or record the purposes for which an employee uses paid leave or paid time off.” But when can an employer request a doctor’s note to substantiate their request for sick leave? The new FAQ’s answer this question, stating that in most cases employers should not request a doctor’s note for sick leave. Only when the employer has a reasonable belief that an employee is not requesting sick leave for a valid purpose can an employer request documentation. While some local jurisdictions, like Berkeley, Oakland, Los Angeles and San Diego, expressly permit employers to request such documentation, it is likely that the intent of the sick leave law will preempt any such provision.
5. Can employees still accrue one hour of sick leave for every 30 hours worked?
Yes, this remains a method to comply with the paid sick leave law. However, under the new paid sick leave law, if an employer chooses an alternate accrual method it must ensure that the employee accrues at least 24 hours of paid sick leave by the 120thday of employment and 40 hours by the 200thday of employment. As an example, accruing 3 days of paid sick leave biweekly would comply with these requirements.
6. What about employees covered under a CBA?
Employers covered under a CBA are entitled to some paid sick leave. In addition, the FAQs state now “these employees must be allowed to take paid sick leave for all the purposes specified in the paid sick leave law and cannot be required to find a replacement as a condition of taking paid sick leave. These employees are also protected by the law’s anti-retaliation provisions.”
7. Be sure to show on each pay stub the amount of the employee’s available paid sick leave, post the new paid sick leave poster, and use the updated 2810.5 Individualized Notice to Employee.
While not a new requirement, as a reminder the amount of available sick leave must be show on employees’ itemized wage statements (aka pay stubs). A new required paid sick leave notice must be posted by January 1. If one of those large, laminated all-in-on posters are used, such as those provided by the California Chamber of Commerce, the new paid sick leave information should be included. Otherwise, the new poster can be obtained here. Also, be sure to use the new Individualized Notice to Employee required under Labor Code section 2810.5 – discussed below
These FAQs provide some additional guidance as to how the new standards should be practically implemented come January 1st. Employers should look to their paid sick leave policies to ensure a smooth transition to the new standard.
Labor Commissioner Provides Updated Individualized Notice to Employee (aka Wage Theft Notice)
Employers are already required to provide a notice to all employees when they are hired stating specified information regarding wages, paid sick leave, and other information. With the revisions to the sick leave law and additional legislation requiring notice of information regarding federal or state disaster declarations, the existing Notice required some revision. To account for these changes, the Labor Commissioner has published an updated Notice to Employee template that specifies the new required amount of paid sick leave as well as a section for employers to provide notice of disaster declarations, as needed. Currently, only the English language version is available; however, we expect the notice to be posted in additional languages in the coming days. Employers should implement the updated notice starting January 1, 2024 for new hires. This notice may also be required for current employees if you don’t otherwise inform them of these changes in writing.
Despite all of the above, we at Stradling wish you a Happy Holidays and a prosperous New Year.
