Business and Corporate - Business & Corporate Articles California’s New Employee “Sick Leave” Laws Apply to Lawyers and Clients Alike

Business & Corporate Articles

California’s New Employee “Sick Leave” Laws Apply to Lawyers and Clients Alike

Effective on July 1, 2015, a new set of statutes in the California Labor Code (Sections 245, et seq.) become operative, requiring that virtually all employees who work in California must be given up to three days of paid sick leave each year by their employers. This will affect not only your clients, but lawyers themselves as both employees and employers.

These new laws apply to virtually every private sector employer and employee in California regardless of size; there are no exemptions for “small” employers as there are with other federal and state employment laws. Many public sector jobs are within the scope of the new sick leave laws, although certain employees covered by Collective Bargaining Agreements are exempt, as are some in-home care providers and employees in the airline industry.

The new sick leave laws will require that on and after July 1, 2015, all hourly/non-exempt employees who work for thirty or more days within a year from the time they began employment must accrue paid sick leave at a rate of no less than one hour for every thirty (30) hours they work. Salaried exempt employees will be assumed to work forty (40) hours for accrual of sick leave, but if their normal work schedule is less than 40 hours then they will accrue paid sick leave based on their normal workweek. Employees do not have to be paid for accrued but unused sick leave upon termination (unlike vacation pay which must be paid at termination), but if an employee is re-hired within one year the employee is entitled to have the previously unused sick leave balance reinstated (again, unlike vacation pay which has no such requirement).

There are a number of accrual rules for sick leave, including:

Employees with accrued sick leave time are entitled to begin to use it on the 90th day of employment, and continuing as sick time is accrued;
No accrual or carry-over is required if the full amount of sick leave is advanced at the beginning of each year; and
Employers may (but are not required) to advance unearned paid sick days to employees.

Accrual policies under the new law are extremely complex. If an employer elects to provide the sick leave all at once at the beginning of each year, then accrual rules are not implicated. The downside, of course, is that is a short term employees might leave, having taken some sick leave that would not otherwise have been accrued, but providing the sick leave up front may be less of an administrative headache for employers than following the accrual rules.

Paid sick days must carry over from year to year. Employers can limit use of paid sick leave to twenty-four (24) hours/three (3) days in each year of employment, and an employer has no obligation to allow an employee’s total accrual to exceed forty-eight (48) hours (or six (6) days) under certain circumstances.

Under the new laws, employees are able to use their sick leave for preventative care or for the diagnosis, care, or treatment of existing health conditions of the employee or specified family members. Employees must also be permitted to use their sick time if they are the victim of domestic violence, sexual assault, or stalking.

Employees may decide how much paid sick leave to use, although employers may set a reasonable minimum increment, not to exceed two hours, for the use of paid sick leave. The new laws also require employees to provide “reasonable” advance notice if the need for paid sick leave is foreseeable, and when unforeseeable, the employee must provide notice of the need for leave as soon as practicable.

An employer cannot discriminate or retaliate against an employee for using accrued sick leave. Employees may file administrative claims with the California Division of Labor Standards Enforcement (also known as the Office of the Labor Commissioner), which office can award the dollar value of any sick days withheld, or $250 multiplied by three, whichever is greater (up to $4,000). An additional penalty of $50 per day can be imposed if sick leave violations result in “other harm” to the employer or family member. Other enforcement mechanisms exist.

Paying the employee for using sick leave is somewhat less complicated. Employees must be paid for used sick leave at the same rate of pay as normal work hours. When an employee has seen a pay rate change within the 90 days before sick leave is used – or was paid under a commission or piece rate plan, or was a non-exempt salaried employee – sick leave must be paid by dividing the employee’s total regular wages by the employee’s total hours worked in the full pay periods of the most recent 90 days of employment.

Employers with vacation, PTO or sick leave policies in place before July 1, 2015 may not need to alter their current plans; however such policies must be carefully reviewed to make sure they equal or exceed these new laws. For example, many vacation or PTO policies, while offering more time off than these new laws, do not begin to accrue for ninety (90) days or more, and would be improper.) There are a host of other plan specific requirements that must be satisfied if a current policy is going to be left in place.

There are a number of additional details of the new sick leave laws not included in this article. There are also certain “postings” required of employers, record-keeping rules, and itemized paycheck requirements. The DLSE has recently posted a set of FAQs, which can be found at http://www.dir.ca.gov/dlse/Paid_Sick_Leave.htm.

Employees should be aware of their new rights and responsibilities. Every employer in California should also take heed to review existing policies, or create new ones before July 1, 2015 to ensure they are in compliance. Unless you or your clients are sole practitioners with no employees, this includes you.

–By Timothy G. Williams of Pope, Berger, Williams & Reynolds, LLP, with the editing assistance of his partners

This article is for information purposes and does not contain or convey legal advice. The information herein should not be relied upon in regard to any particular facts or circumstances without first consulting with a lawyer.