California law mandates that employers provide paid sick leave to eligible employees, with accrual requirements and usage limits outlined by state regulations. Employers must track sick leave, inform employees, and comply with both state and local sick leave laws to avoid penalties.
By Brad Nakase, Attorney
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The Healthy Workplaces, Healthy Family Act of 2014 (HWHFA), as revised by SB 616, mandates that California employers offer paid sick leave to their employees.
The fundamental provisions of California’s paid sick leave statute are as follows:
The paid sick leave statute applies to all companies with employees in California, with a few exceptions. Some groups of workers are exempt from the HWHFA’s protections: those who are part of certain qualifying collective bargaining agreements (CBAs), those who work for government entities as retired annuitants, some people who work for air carriers, and those who provide in-home supportive services (eligible for the IHSS Paid Sick Leave Program). Paid sick leave is an employee benefit under a CBA, but only for the reasons specified in the law.
In addition to California’s state legislation, there are a number of municipal sick leave policies, and these regulations sometimes diverge from the state’s mandates. For instance, hotel employees in Long Beach and Los Angeles are protected by paid leave statutes. If paid sick leave is required by law in the area where an employee works, the employer must research the specific regulations in that area to find out who is eligible, which workers are excluded, and any other discrepancies between the rules at the state and local levels.
Businesses operating in areas of California where sick leave regulations are in place, like Berkeley, Los Angeles, Emeryville, Oakland, San Diego, and others, are obligated to adhere to both the state and city regulations. If an employee who was already qualified for paid sick leave is hired again within a year, they can still earn and use sick leave.
Companies are required by the Division of Labor Standards Enforcement to display the Paid Sick Leave Poster in a highly visible and easily readable area of the workplace. In addition to posting the sign in the office, employers in California that have employees working from home or other distant locations can also send them a copy.
There are a few different ways in which businesses may provide their workers paid sick leave:
Other factors to think about
Every year, workers can roll over any unused vacation time they may have. However, companies can set a limit of 80 hours or 10 days of paid sick leave per employee. Carryover is possible even without a lump sum policy.
Unless the business paid out the unused leave when the employee was fired, the employer is required to restore all accumulated and unused paid sick days to the employee if they are rehired within one year of their separation.
Companies should think about whether it’s better to offer paid sick leave as part of a combined PTO plan or to have a separate policy for paid sick leave. Although it could be easier to just have the current PTO policy in place that meets the paid sick leave criteria, there are a few drawbacks to a combined PTO plan. For instance, it could be more tedious to monitor an employee’s sick leave usage if it’s open-ended. Furthermore, employers are not compelled to pay out sick leave hours that are explicitly intended for legally covered sick absences, but any unclaimed PTO hours must be paid out upon departure.
No employer has the authority to dictate how and when an employee can use his or her paid sick leave. Even if an employee does not give specific reasons for needing sick leave or cannot present a doctor’s note, their employer is still required to approve the use of paid sick leave.
Companies are required by law to compensate nonexempt workers for paid sick leave just as they would for any other work-related absences. The following options are available under the legislation to establish the employee’s rate of pay:
By dividing the entire non-overtime compensation by the total non-overtime hours worked, you can determine the normal, non-overtime rate of pay for the workweek in which the employee utilized paid sick leave.
Dividing the worker’s total pay over the last 90 days (not counting extra bonus pay) by the number of regular hours worked during the full pay periods of the last 90 days.
In the same way that employers pay other forms of paid leave, such as vacation time, exempt employees must also be compensated for paid sick leave absences.
Upon hiring, employers are required under the HWHFA to inform all nonexempt workers in writing about the availability of paid sick leave. To comply with this notification obligation, the California Wage Theft Protection Act notice has been updated to include details regarding paid sick leave.
Paycheck stubs or an additional document sent with paychecks are required to show employees’ available paid sick leave amounts.
Organizations are required by law to provide their employees with a paid sick leave policy that explains the program’s availability, any restrictions the employer may have on sick leave usage, and how to access and utilize it.
For a minimum of three years, employers are required to document the total amount of paid sick leave they have granted to employees as well as the amount of sick leave each employee has actually used. Employers should keep track of paid sick leave time independently of other forms of leave in order to guarantee compliance.
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