An Update On The Epidemic: California’s Statewide Paid Sick Leave Law

On January 1, 2015, California 's Healthy Workplaces, Healthy Families Act of 2014 (California paid sick leave act) went into effect. When Governor Edmund G. Brown, Jr. signed the Act into law on September 10, 2014, California became the second state to mandate that certain employers provide paid sick leave to employees.1 In addition, at least 18 cities, three of which are in California, have passed their own mandatory sick leave laws.2 In December 2014, the Office of the Labor Commissioner issued Frequently Asked Questions (FAQs) that clarified employers' responsibilities under the new law.3

Under the new California law, with some limited exceptions, employers with employees who work in California will need to provide up to 24 hours or three days of paid sick time to current and new employees beginning on July 1, 2015. For employers in the three California cities that mandate paid sick leave, compliance with multiple laws may prove challenging.

Covered Employers and Employees

The California paid sick leave act applies to any employer that has at least one employee who works more than 30 days in a year in the state of California. All employees who work more than 30 days in a year in California are covered (including part-time and temporary employees), with the exception of (a) employees covered by a valid collective bargaining agreement that provides paid leave and has other required provisions; (b) employees in the "construction industry" covered by a valid collective bargaining agreement;4 (c) providers of "in-home supportive services" (as defined under California law); and (d) individuals employed by an air carrier as a flight deck or cabin crew member (provided they receive compensated time off).

Accrual and Caps

Under the new law, employees accrue one hour of sick time for every 30 hours worked (including overtime hours). Employees who are exempt administrative, executive, or professional employees accrue sick time based on the employee's normal work week or a 40-hour work week, whichever is less. As clarified by the Labor Commissioner's FAQs, employees first become eligible to receive or accrue paid sick time on July 1, 2015, or the date of hire, whichever is later; however, for the purpose of determining whether they have worked in California for 30 days (within a year)5, the Labor Commissioner has clarified in its FAQs that it believes the key date for beginning to count any 30-day period is January 1, 2015.6 At its discretion, an employer may loan sick time to an employee in advance of accrual.

While the date on which actual accrual of paid sick time begins is measured from July 1, 2015, the time period for when an employee may use accrued paid sick time is measured by the actual date of employment. Specifically, an employee must be employed for at least 90 days by the employer before being able to use any accrued paid sick leave. For example, Employee A is hired on March 1, 2015 and will reach 90 days of employment on May 31, 2015. Under the law, Employee A begins accruing sick time on July 1, 2015. Employee A will be able to use her paid sick time immediately upon accrual in July 2015. In contrast, Employee B is hired on July 1, 2015. He reaches his 90th day of employment on September 29, 2015. Under the law, Employee B begins accruing paid sick leave on July 1, 2015. In this scenario, however, Employee B cannot use any paid sick leave until 90 days of employment, or September 29, 2015.

Employers are permitted to cap use of paid sick time at 24 hours (or three days) in each year of employment. While the law references "24 hours or three days" as the amount of paid sick leave that must be provided on an annual basis, the law also defines a "paid sick day" as time that is "compensated at the same wage as the employee normally earns during regular work hours." For employers whose employees work on an alternative workweek schedule, such as a four-day per week, 10-hour per day schedule, a "paid sick day" might actually be 10 hours of wages for the employee, or 30 hours. Thus, the statute's references to "24 hours or three days" will likely result in varying interpretations by employers with alternative workweek schedules or schedules worked by employees that are anything other than an eight-hour day. In addition, employers should be aware that the rate at which they pay sick leave is the employee's hourly wage. For situations involving varying pay rates, such as different hourly pay, commission or piece rate employees, or non-exempt salaried employees, the employer must divide the employee's total wages (not including overtime premium pay)7 by the employee's total hours worked in the full pay periods for the prior 90 days of employment to...