Key Amendments to California’s New Paid Sick Leave Law

California’s new Paid Sick Leave Law, the Healthy Workplaces, Healthy Families Act of 2014 (“Act”), took effect January 1, 2015, with leave benefits to accrue starting July 1, 2015. Although the Act was already in effect, the California legislature passed additional amendments, which were signed into law by Governor Jerry Brown on July 13, 2015.

Here are some of the key amendments:

Accrual

In addition to the accrual method in which an employee gains one hour of paid sick leave for every 30 hours worked, employers have the option to use their own accrual method, provided accrual is (1) on a regular basis; and (2) the employee will have 24 hours of accrued sick leave by his or her 120th calendar day of employment.

Employers who already have their own PTO policy

Employers who had a preexisting Paid Time Off (“PTO”) policy as of January 1, 2015, may continue that policy provided: (1) PTO/PSL accrues regularly; (2) employees accrue at least one day/eight hours of PTO/PSL within 3 months of employment each calendar year; and (3) employees accrue at least 3 days/24 hours PTO/PSL within 9 months of employment.

Rate of pay for Paid Sick Leave

For nonexempt employees, pay during PSL can be calculated using one of two methods: (1) the “regular rate of pay” for the workweek in which the employee uses paid sick leave; or (2) by dividing the employee’s total wages, not including overtime premium pay, by the total hours worked in the full pay periods of the prior 90 days of employment.

Other Amendments

• If an employer provides unlimited PSL or PTO, the employer may satisfy its notice obligation by indicating “unlimited” on the employee’s wage statement.
• An employer is not required to reinstate accrued PSL to an employee who returns to the company after less than one year, if the employee was “cashed out” for unused PSL at the time of separation. (Recall there is no obligation to “cash out” accrued, but unused PSL, though there is for PTO.)
• PSL is only available for employees who have worked at least 30 days within the last year for the same California employer.

Again, California employers are encouraged to consult with their employment law counsel to ensure they are in compliance with all aspects of the new Paid Sick Leave law.