Starting July 1, 2015, the Healthy Workplaces, Healthy Families Act of 2014 (HWHFA) will require all California employers to offer sick pay to nearly every category of employee. If you run a small business in California and are not sure of your obligations, please read below.
► Overview of California Paid Sick Leave Laws
- What is the New Mandatory Paid Sick Leave Law? Earlier in the year, the California Legislature passed the Healthy Workplace, Healthy Families Act of 2014 (HWHFA) which requires all employers, regardless of size, to provide paid sick leave to employees.
- What Kinds of Employers Must Comply? All of them. There are no minimum size limits (like employers with over 50 employees, etc.) Every employer must comply. California’s new paid sick leave law applies to all employers, not employers above a certain size of employees or volume of business. All businesses with employees of any kind or nature (part-time, full-time, seasonal, temporary, etc.) are required to comply.
- What Kinds of Employees Must be Provided with Sick Leave? All of them, whether part time, full time, temporary, exempt, non-exempt, or otherwise, as long as they work 30 or more days in California annually. Employers located outside of California must provide paid sick leave to any employee who works at least 30 days in California.
- When Does the Law Begin? The notice requirements began on January 1, 2015, and the employee’s right to accrue sick leave starts July 1, 2015.
- My Business Only has Part-Time Workers. Do We Still Need to Comply? Yes. The new law requires paid sick leave to be paid to all categories of employees, including full-time, part-time, temporary, seasonal, or others. If the employee works more than 30 days per year, they are required to be given paid sick leave.
- Does sick leave have to be provided to temporary employees working for the company through a staffing agency? Yes. Temporary employees are covered and the employer or joint employer must provide the required paid sick leave.
- What Method Should my Business Use? Lump Sum or Accrual? Under the new law, companies can choose between a policy that accrues time at 1 hour for every 30 hours worked, or a lump sum of 3 days or 24 hours at the start of each 12 month period. The 12 month period can be based on the employee’s anniversary date, calendar year, or other defined term. The accrued hours do not need to roll over.
- Can We Impose Caps? Yes. For businesses that choose the accrual method, the accrual rate will cause full time employees to earn over 8 days of sick pay per year. Employers can impose an accrual cap of 6 days (or 48 hours) total, and the use of up to 3 days (24 hours) per annual period.
- What can the Paid Sick Leave be Used for? Employers must allow employees to use paid sick leave for the diagnosis, care, treatment or preventative care of a health condition of the employee or the employee’s family member. “Family member” specifically includes children, parents, spouses, registered domestic partners, grandparents, grandchildren and siblings. Paid sick leave can also be used for leave related to domestic violence, sexual violence and/or stalking.
- Can Employers Implement a Waiting Period for New Hires? Yes. New employees are entitled to begin using paid sick leave on their 90th day of employment.
- What’s the Minimum Block of Sick Leave Time that Can be Taken? Sick leave may be taken by employees in increments of two hours or less.
- Will My Company’s Existing PTO Policy Satisfy the Obligation to Provide Paid Sick Leave? Not necessarily. Do not assume that just because your business offers 3 or more days of PTO and/or sick leave that your business has complied with California’s new law. You will need to check how the leave time accrues, and if it accrues greater than 1 hour for every 30 worked, or on a per-pay period basis, then your PTO policy will not comply with the new law’s requirements.
- Does Sick Leave Accrual Notification Have to Be Provided to Employees with Every Paycheck? Yes. A failure to print the employee’s sick leave accrual on wage statements or other written statements will open the company up to individual claims for inaccurate wage statements as well as class actions and a Private Attorney General Act of 2004 (PAGA) claims. If it is not possible to print this information on the wage statement, then the company must provide written notice of the amount of sick leave available on another document provided on the designated pay date.
- Is Rollover of Paid Sick Leave Days Required? Yes under the accrual method (but accrual can be capped to 6 days or 48 hours per annual period). However, no rollover is required using the upfront method.
- What are the penalties for not complying? The Labor Commissioner may order the company to pay an employee with back pay, payment of sick days unlawfully withheld and payment of an administrative penalty of up to $4,000, as well as a per day penalty of $50 per employee whose rights are violated.
► Getting Legal Help
AXIS Legal Counsel’s Business and Corporations Practice provides legal advice to numerous businesses with a wide range of business disputes. For information on retaining AXIS Legal Counsel to represent your business in connection with any legal matter, contact [email protected] or call (213) 403-0100 for a confidential consultation.
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