Beginning July 1, 2015, any California employee who works for 30 or more days within a year is entitled to paid sick leave.

Under the Healthy Workplaces, Healthy Families Act of 2014 (the Act), employees will accrue paid sick leave at a rate of one hour for every 30 hours worked, starting on July 1, 2015 or, if they start after July 1, on their first day of employment.  The Act is codified at Labor Code sections 245–249 and requires employers to include information about the accrual of sick leave with pay statements, keep records for three years, display a workplace poster about the Act and provide written notice to employees at the time of hire. 

Employers should begin preparing to implement the provisions immediately.  Unlike some other labor code provisions, there is no exception under the Act for small employers; the only exceptions are for certain employees covered by collective bargaining agreements, some employees of air carriers, and providers of in-home care and support services.  Almost all employers in California need to prepare to implement paid sick leave by July 1.

Sick Leave Basics

Employees may start using accrued leave on their 90th day of employment and may request the leave either verbally or in writing.  Accrued leave can be used to care for a relative and for the diagnosis or care of an existing condition.  Because employees accrue sick leave at a rate of “no less than one hour” for 30 hours of work, a full-time employee working 40 hours per week would earn nearly 70 hours per year, but an employer may cap the use of paid sick leave at 24 hours or three days per year.  Unlike vacation pay, an employer is not required to pay these days out upon termination or resignation of the employee, but up to 24 hours or three days of leave “shall carry over” to the next year of employment.  Employers should take note that the Act does require the use of calendar years; and its application can be tied to either the July 1, 2015 effective date or the individual employee’s work anniversary.

Employees who use their sick leave are paid at their regular hourly wage.  If, in the 90 days of employment before the leave, the employee had different rates, or was paid by commission or at piece rates, the rate is calculated as an average of all compensation excluding overtime premiums for the previous 90 days.  Employers cannot require employees to provide a replacement to cover a shift nor can employers retaliate against an employee for taking sick leave, but they may require employees to give reasonable notice for “foreseeable” uses of paid sick leave.

Finally, employers who already provide paid sick leave or discretionary paid leave policies may not be affected by the new time requirements, as long as they provide more generous sick leave than required by the Act. But those employers will still be required to allow employees to take paid sick leave in the amounts granted by the Act for purposes such as caring for a family member and carrying over sick time from one year to the next, which might not be permitted under existing employer policies.

How Employers Can Prepare and Additional Requirements  

Under the Act, employers must display a workplace poster advising employees of their rights under the Act.  They must also provide written notice of the Act at the time of hire.  Employers must also keep records related to accrual and use of the sick leave for three years.  Finally, and perhaps most onerously, employers must include information on accrual and use of sick leave on either an employee’s pay stub or on a separate document given to the employee at the same time as provision of the employee’s pay stub.  As of this writing, it is unclear whether failure to do so could support a claim under Labor Code section 226, which establishes requirements for pay stubs, but employers are advised to include the information to avoid potential claims.  

Employers should immediately update their policies and workplace notices to reflect the new law.  They should also make sure that their recordkeeping and payroll systems are prepared to handle the new requirements.  Consult counsel for advice and information regarding the implementation of these new policies.

© 2015 Perkins Coie LLP