Effective July 1, 2015, California employers must provide paid sick leave to any employee who works at least 30 days in the state. The newly signed Healthy Workplaces, Healthy Families Act of 2014 (the “Act”), which previously topped the California Chamber of Commerce list of "job killer" bills, applies to all California employers regardless of size.

Accrual and Caps on Paid Sick Time

Under the Healthy Workplaces, Healthy Families Act, non-exempt, hourly employees will accrue paid sick time at a rate of not less than one hour per every 30 hours worked. Employees who are exempt from overtime requirements (and who therefore are unlikely to have precisely tracked hours), will be deemed to work 40 hours per workweek for accrual calculation purposes (unless the employee’s normal workweek is fewer than 40 hours). Employees covered under qualifying collective bargaining agreements and employees in very limited industry segments are excluded from the Act.

Employers may limit an employee’s use of paid sick days to 24 hours or three days in each year of employment. While accrued but unused sick days can carry over to the next year, an employer may cap total accrual at six days (48 hours), provided that an employee’s rights to use and accrue sick leave are not otherwise limited.

On What Occasions May Paid Sick Time Be Used?

Employees may take paid sick time in connection with the diagnosis, care and treatment of an existing health condition, or preventive care, of an employee or an employee’s family member. The Act expansively defines family members, and includes the employee’s spouse, domestic partner, children (even adult children), siblings, parents, grandparents and grandchildren. Victims of domestic violence, stalking, and sexual assault may also take paid sick leave for the purposes described in California Labor Code Sections 230 and 230.1.

The Act does not provide an option for the employer to request documentation substantiating the need for such paid sick days. Similarly, an employee must provide notice of the need for paid sick leave, where the need is foreseeable. However, if the need is unforeseeable, notice need only be provided as soon as practicable.

Employees are allowed to use accrued paid sick days beginning on the employee’s 90th day of employment. While employers may lend paid sick days to employees in advance of accrual, employees are otherwise only permitted to use paid sick days as they are accrued.

Coordination with Existing Sick Leave or Paid Time Off (“PTO”) Policies

An employer is not required to provide additional paid sick days if: (a) the employer already has a paid leave or PTO policy, (b) the employer makes available an amount of leave that may be used for the same purposes and under the same conditions as specified in this section, and (c) the policy does either of the following:

  • Satisfies the accrual, carry over, and use requirements of the Act; or
  • Provides no less than 24 hours or three days of paid sick leave, or equivalent paid leave or paid time off, for employee use for each year of employment or calendar year or 12-month basis.

It is important to note that even where an existing PTO or sick leave plan meets the accrual minimums imposed by the Act, it may not satisfy the Act if it is too restrictive in the carry-over provisions, or the employee’s freedom to use paid sick leave is more limited than his or her options under the Act.

Notice, Posting and Recordkeeping Requirements

In connection with wage payments, either as part of the itemized wage statement or in a separate writing, employers must provide written notice to each employee of the amount of paid sick leave or PTO available to the employee.

In addition, the Act requires a new workplace poster providing specific details and disclaimers about paid sick time. The Labor Commissioner will prepare a sample poster containing the required information. The Act also imposes an update to the information contained in the California Wage Theft Protection Act’s Notice to Employees.

Finally, employers are required by the Act to maintain for at least three years records documenting the hours worked and paid sick days accrued and used by an employee.

Penalties and Recommendations

The Act contains a series of penalties for non-compliance. Thus, a careful review of the Act’s requirements and your company’s existing policies is critical. All California employers should consider the following key next steps:

  • Review and update existing policies, and where necessary, implement a compliant paid sick leave policy.
  • If your company already provides sick leave or PTO, ensure that the accrual rate satisfies the Act, and that paid leave under your existing policy may be taken for all purposes included under the Act.
  • Update your itemized wage statement, or supplement your payday notifications, to include the employee’s available paid sick leave.
  • Train your managers and supervisors on the requirements of the Act, including that they cannot require employees to find a replacement worker to cover his or her shift as a condition of using paid sick leave.
  • Comply with posting requirements, and look for the Labor Commissioner’s forthcoming sample poster.
  • Retain records documenting hours worked and paid sick days used and accrued by employees for at least three years.
  • Consider whether your workforce falls under any other mandatory sick time law or ordinance. For example, Connecticut, San Francisco, Seattle, New York City and Portland currently have their own paid sick leave laws.