California Amends Paid Sick Leave Law

This week, California Governor Jerry Brown signed into law an amendment to the Healthy Workplaces, Healthy Families Act of 2014, a law passed last year which requires employers to provide paid sick leave. The law has been incredibly confusing for California employers and the amendments were designed to correct some of the more obvious drafting errors in the law.  The major changes are described below.

Calculating Paid Sick Leave

Before amendment, the law was tricky with regard to the rate of pay for employees paid on a commission, piece rate or other varying rate of pay.  Generally speaking, employers were required to look back over 90 days and average out the rate of pay, taking those variables into account.  The amendment clarifies that rather than using that cumbersome formula, employers can satisfy the law by paying sick leave at either the regular rate of pay (for non-exempt employees) or the rate of pay used for other types of leave (for exempt employees).

Accrual of Leave

Originally, the law required employers who chose to use an accrual method for paid sick leave to have it accrue at a rate of 1 hour per 30 hours worked.  Under the amended law, employers can use a different accrual method, provided that the employee accrues leave on a regular basis and an employee can accrue 24 hours of sick leave by his 120th day of employment each calendar year or every 12 months. Alternatively, employers can provide 24 hours or more of paid sick leave at the beginning of the year.

Unlimited Sick Leave Policies

For employers that provide employees with unlimited sick leave, they can satisfy the law’s notice requirement by indicating “unlimited” on employees’ pay stubs.

Sick Leave Balances For Employees Who Return

The law does not require employers to reinstate paid sick time balances for employees who return to their position within a year, so long as the employee was already paid out for that time at termination.

Asking About Reasons For Sick Leave For Employers With PTO Policies

Although the law requires allows employers to provide sick leave through a PTO policy, employers were still required to keep a record of hours worked and sick time accrued for a three year period.  The amendment now clarifies that for employers using a PTO policy, an employer does not have to ask about or keep a record as to whether the leave was for sick leave or for some other purpose.

- Dan Handman

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