As of July 1, 2015, every California employer must abide by the “Healthy Workplaces, Healthy Families Act of 2014,” or the Paid Sick Leave Law. Readers will recall that the Governor signed Assembly Bill 1522 (Chapter No. 317, Statutes of 2014) last year, creating access to paid sick leave for all employees in California.

While our counties provide generous leave policies to their employees, the new law includes additional restrictions (including the expansion of covered familial relationships to a parent-in-law, sibling, grandchild or grandparent) that will apply to the first three days or 24 hours in a 12-month period. The law requires employers to provide one hour for every 30 hours worked to employees who have worked in California for 30 or more days within a year of starting employment. Employers may limit the use of this leave to three days or 24 hours per year, but the employee must be notified of that limit prior to the implementation of the new sick leave policy.

Accrual of the paid sick leave begins July 1, 2015, or on the first day of employment (whichever is later). The employer may cap this accrual at 48 hours or six days. Employees are able to begin using the sick leave beginning on the 90th day of employment, and the leave is paid at the employee’s current rate of pay. It is important to note that this law applies to temporary, part-time, seasonal and full-time employees and employees may utilize the paid sick leave for themselves or for the family members described above for the diagnosis, care or treatment of an existing health condition or preventative care. The bill does not apply to IHSS employees or those covered by a collective bargaining agreement that provides a regular hourly pay of no less than 30 percent more than the state minimum wage, premium overtime wages, paid sick leave and final and binding arbitration of paid sick leave disputes.

As an alternative to the above-mentioned accrual method, employers can provide 24 hours or three days at the beginning of each calendar year, anniversary date or 12-month basis. “Frontloading” these hours means an employer does not have to satisfy the accrual and carry-over methods. Employers are not required to pay out unused paid sick days, but if an employee is rehired within one year at the same place of employment, previously accrued and unsed paid sick days must be reinstated unless the leave was cashed out upon separation.

Are Your HR Directors Confused? Help Is On the Way.

Upon what was likely a voluminous amount of questions and concerns regarding what became recognized as a law chock-full of ambiguous requirements and murky details due to a late night, end-of-session passage, clean-up legislation was introduced this session (AB 304, Gonzalez). CSAC was instrumental in pushing for and securing an exemption from the paid sick leave requirements for CalPERS’ and 1937 Act retired annuitants. Additionally, our association is tirelessly working with our advocacy partners on the private business side to push for imperative clean-up language necessary for smooth implementation of this law.

AB 304, supported by CSAC and the League of California Cities, provides the following clarifications and changes to the Paid Sick Leave Law.

1. Alternative accrual methods. Employers will now have an additional method of accrual for paid sick leave: the employee can accrue the leave on a regular basis via an accrual rate other than hours worked (i.e., per week, per pay period or per month).
2. Frontloading. AB 304 adds a provision for employers to provide 24 hours or three days of paid sick leave to new employees for use by the completion of 120 days of employment.
3. The bill specifies that the 30-day eligibility period before an employee is entitled to the paid sick leave must be with the same employer.
4. Full amount of leave defined. For those employers utilizing the method of frontloading the full amount of leave to an employee at the beginning of each year, AB 304 provides that “full amount of leave” means three days or 24 hours and “beginning of the year” means at the beginning of each calendar year, 12-month basis or year of employment.
5. Grandfathered policies. AB 304 will allow employers that have existing paid sick leave policies for a class of employees that was in effect before January 1, 2015 and provides at least one day or eight hours of paid sick leave/PTO within three months of employment and the employee was eligible to earn at least three days or 24 hours of paid sick leave/PTO within nine months of employment to continue moving forward with that policy for new and existing employees.
6. Calculating rate of pay. Clean-up language clarifies how to calculate the rate of pay for sick leave, and provides two calculation methods for nonexempt employees: a) regular rate of pay for a workweek, and b) dividing the employee’s total wages by total hours worked during the full pay periods of the prior 90 days of employment.
7. Reinstatement of leave. AB 304 will provide that the amount of sick leave reinstated to an employee rehired within 12 months of separation is only that up to the six days or 48 hours of unused accrued sick leave.

AB 304 contains an urgency clause, which means the bill will go into effect immediately upon signing by the Governor. The bill is currently enduring the committee process in the Senate with a goal of getting to the Governor prior to the legislative summer recess (July 17).