California Amends Paid Sick Leave Law

John GarnerCompliance, Legislative Updates, Resources

California’s Governor Brown has signed legislation clarifying and improving the state’s new paid sick leave law.  Unfortunately, the amendment was signed the week following the deadline for employers to notify employees of their new rights, which means some employers who want to take advantage of the new rules may need to send new notices and those new notices could be construed as benefit takeaways.

The original law, the Healthy Workplaces, Healthy Families Act of 2014, provides, among other things, that an employee who, on or after July 1, 2015, works in California for 30 or more days within a year from the commencement of employment is entitled to paid sick days for prescribed purposes, to be accrued at a rate of no less than one hour for every 30 hours worked.  Rather than accrue paid sick leave, employers can grant 24 hours of paid sick leave or paid time off, effective July 1, 2015, on the employee’s date of hire and anniversary or every calendar year.

The amendment clarifies that the employee has to work for the same employer in order to qualify for accrued sick leave under these provisions.

The amendment also authorizes an employer to provide for employee sick leave accrual on a basis other than one hour for each 30 hours worked, provided that the accrual is on a regular basis and the employee will have 24 hours of accrued sick leave available by the 120th calendar day of employment.

For specified industries, the amendment delays the application of the notice requirement.  The amendment delays the notice requirement for the broadcasting and motion picture industries until January 21, 2016.

The amendment permits an employer who provides unlimited sick leave to its employees to satisfy notice requirements by indicating “unlimited” on the employee’s itemized wage statement.

For employees paid different hourly rates, paid commissions, paid piece rates or for non-exempt employees paid a salary, the original law required an employer to calculate paid sick leave based upon an employee’s average pay rate in the prior 90 days.  Under the amended law, employers have the option of calculating the regular rate of pay (total wages, excluding overtime premium, divided by total hours worked) in a 90-day period, or using a complex formula referred to as the workweek method.

The amendment provides that an employer is not required to reinstate accrued paid time off to an employee who is rehired within one year of separation from employment, if the accrued paid time off was paid out at the time of termination.

The amendment has a safe harbor for pre-existing plans that provides that an employer is not required to provide additional paid sick days if the employer had a paid leave policy or paid time off policy in place before January 1, 2015.  Under this rule, an employer complies with the law if it continues to offer a plan that provides accruals of no less than one day or 8 hours for every three months of employment.  If an employer changes its accrual method, it must conform with the new law.

The amendment provides that the employer has no obligation to inquire into or record the purposes for which an employee uses sick leave or paid time off.

The amendment took effect immediately when the Governor signed it.

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