| Last week, Governor Jerry Brown signed into law California's first statewide paid sick leave law (referred to herein as "California Paid Sick Leave Act"). Employers in California will now be required to give part- and full-time employees at least three (3) days or twenty-four (24) hours of paid sick leave each year which takes effect in July 2015. The law covers all employees who work more than 30 days in a year in California, including those classified as exempt, such as salaried managers and supervisors. Employees exempt from overtime requirements are deemed to work forty hours per workweek for the purposes of the law, unless the employee's normal workweek is less than forty hours in which case the employee would accrue paid sick days based upon his/her normal workweek. Part-time, temporary and seasonal employees who were not previously eligible for paid sick leave under an employer's policies may now be entitled to this benefit. The California Paid Sick Leave Act requires the following:
- Employees accrue one hour of sick leave for every thirty (30) hours worked (including overtime hours), beginning on the first day worked for an employer;
- An employee must be able to begin to use paid sick leave beginning on the ninetieth (90th) day of employment;
- Employers may implement a maximum bank of forty-eight (48) hours of accrued paid sick time;
- Employers need only allow employees to use up to twenty-four (24) hours or three (3) days of paid sick leave per year;
- Accrued paid sick leave carries over to the next year;
- Payment for sick days must be included in the paycheck immediately following an employee's use of paid sick leave. The paid sick days must be paid at the same wage rate as the employee normally earns during regular work hours;
- Employers must identify the use of paid sick days on employee's wage statements;
- Employers must display a poster describing employee rights with respect to paid sick days; and
- Unused sick days need not be paid out on termination. If an employee is reinstated within twelve months, his/her paid sick leave must be restored to the level he/she had at the time of separation of employment.
The Paid Sick Leave Act prohibits an employer from requiring an employee to find a replacement worker to cover the hours during which the employee is absent. Employers may not deny the right to use accrued paid sick days. Additionally, employers cannot retaliate, terminate, demote, or in any way discriminate against any employee for using accrued sick leave. An employer who fails to comply with California's paid sick leave law or display the required poster will be subject to penalties and fines issued by the Department of Labor Standards and Enforcement.
Employees will be able to use accrued paid sick days to care for themselves or a family member, including a registered domestic partner. The law also specifically allows the leave to be used if the employee is a victim of domestic violence, sexual assault, or stalking. Employees must notify the employer, either orally or in writing, of foreseeable needs for time off and the employer cannot require the employee to find a replacement worker. If an illness or injury is not foreseeable, the employer will still need to provide time off of work.
The new law does not replace any more generous paid leave arrangements, such as PTO policies or certain negotiated agreements and arrangements otherwise covered by law, including: 1) Collective bargaining agreements that provide for paid sick leave for workers who make more than thirty percent (30%) above the minimum wage; 2) Collective bargaining agreements in the construction industry that waive coverage under the law; or 3) Compensatory time off for flight crew members covered by the Railway Labor Act.
The Wage Theft Prevention Act (Labor Code section 2810.5) has been concurrently amended with the passage of the Paid Sick Leave Act, so employers will be required to give new employees notice of their rights under the new paid sick leave law at the time of hire, preferably through their offer letter. This, in turn, also requires proper notice to existing employees of their rights which may be accomplished through an employee's wage statement or similar notice authorized by Labor Code section 2810.5. Notice must be given within seven calendar days. To avoid inconsistencies in administration, employers that do not provide notice to current employees through wage statements should consider providing an updated/amended notice of their paid sick leave rights by January 8, 2015, seven days after the effective date of the Paid Sick Leave Act, or no later than July 8, 2015, seven days after the implementation of the Paid Sick Leave Act.
Employers must retain records documenting hours worked and paid sick days accrued and used by an employee for three years. An employer's failure to maintain adequate records creates a rebuttable presumption the employer violated the law, absent clear and convincing evidence otherwise. In addition, an employer must make these records available to an employee upon request as required under Labor Code section 226.
There are still several questions that remain unanswered about the Paid Sick Leave Act. Employers should expect additional clarification and guidance within the next few months.
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