By Adam Nathaniel Arce
The Healthy Workplaces, Healthy Family Act of 2014 (the “Act”) provides Paid Sick Leave (“PSL”) to all employees who work for an employer more than 30 days in a year. SB 616, which was just signed into law, modifies the Act to require employers offer additional PSL to employees, among other changes. SB 616 becomes effective January 1, 2024.
Employees Will Be Entitled to 5 Days (40 Hours) of Paid Sick Leave
Previously, employees were entitled to receive three (3) days (24 hours) of PSL per year. Beginning January 1, 2024, employees will be entitled to five (5) days (or 40 hours, whichever is greater) of PSL per year. An employer may choose the “Lump Sum” or “Accrual” method to ensure employees have access to the guaranteed PSL.
An employer may utilize the “Lump Sum” method by providing five days (40 hours) of PSL: a) on January 1, 2024 and every January 1 thereafter; b) on the employee’s anniversary hiring date; or, c) once during a set rolling 12-month period. Employers who utilize the lump sum method are not required to allow employees to carry-over any remaining PSL from year to year. Instead, at the end of the selected 12-month period, any remaining time is lost; however, the employer must deposit another five days (40 hours) to the employee’s PSL account for use during the next 12-month period.
Alternatively, an employer may utilize the “Accrual” method by providing employees with at least three days (24 hours) of PSL by the completion of an employee’s 120th calendar day of employment and ensure that employees have received an additional two days (16 hours) of PSL by the completion of the employee’s 200th calendar day of employment. Employers who utilize this method are required to allow employees to carry over PSL time from year to year, subject to a cap of ten days (80 hours).
Regardless of which method an employer uses, an employer may cap the use of PSL at five days (40 hours) per year. However, total accrual thresholds will now be raised to ten days (80 hours) per year, an increase from the current requirement of six days (48 hours).
The Act still allows an employer to limit the use of Paid Sick Leave in an employee’s first 90 days of employment.
If an employer has a combined Paid Sick Leave/Paid Time Off Policy, the employer must satisfy all requirements of the Act, and must ensure that employees accrue up to five days (40 hours) of Paid Sick Leave within 6 months of employment.
Expansion to Include Employees Operating Under a CBA
PSL requirements will now apply to employees operating under a Collective Bargaining Agreement, with the exception of railroad carrier employers.
The Act Now Preempts Certain Provisions of Local Ordinances
Specific provisions of the Act as listed below preempt any conflicting provisions of any and all local PSL ordinances:
- Compensation for paid sick leave and reinstatement of PSL balances if rehired
- Employer lending Paid Sick Leave to EEs
- Notice to employee about paid sick leave
- Calculation of Paid Sick Leave
- Advanced notice for use of reasonably foreseeable paid sick leave
- Payment of paid sick leave
Absent from the above list are the accrual and cap provisions that local ordinances commonly provide. This means employers should ensure compliance with local ordinances that offer higher cap or accrual benefits to employees.
The above changes do not go into effect until January 1, 2024. California employers should review their current PSL policies and begin to develop any necessary changes to come into compliance with the law in 2024. Employers should also begin training supervisors, managers, and/or human resources employees on the changes to the Act. Finally, employers should review the law with their payroll processor to ensure that the changes to the Act are in effect as of January 1, 2024.
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Ferber Law is available to help answer questions relating to the California Paid Sick Leave requirements.