First Amendments to California’s Paid Sick Leave Act

by Michelle R. Ferber and Ben McDonald

While the new laws regarding paid sick leave, known as the “Healthy Workplaces, Healthy Families Act of 2014” (“Original Act”), have only been in effect since July 1, 2015, the California legislature has already changed several significant provisions. These amendments, introduced in Assembly Bill no. 304 (“Amended Act”), took immediate effect when signed into law by Governor Jerry Brown on July 13, 2015.

Under the Original Act, paid sick leave accrued at the rate of one hour of paid sick leave for every 30 hours worked and the employee was allowed to use his/her accrued sick days beginning on the 90th day of his/her employment.  Under the Amended Act, an employer may now use a different accrual method than the one above so long as the accrual is on a regular basis and the employee would have 24 hours of accrued sick leave available by the 120th day of employment in the calendar year, or in each 12-month period.  Employers can also satisfy paid leave requirements by providing employees up front with 24 hours of paid leave time that are available for use by the employee after the 120th day of employment.  The Original Act was also amended to clarify that an employee must work for the same employer to accrue sick leave, and that an employer shall reinstate accrued leave to an employee who is rehired within one year of separation or termination from employment unless that employee’s accrued time was paid out upon separation or termination.

Under the Amended Act, an employer who had a paid sick/time off policy prior to January 1, 2015, which does not calculate paid time off by the “1 hour per 30 hours worked” method as described in the Original Act, may continue to use the previous policy so long as the employee would receive the same protections.  In short, an employer can continue to use their own previous accrual method so long as an employee has no less than one day or eight hours of accrued sick leave or paid time off within three months of employment of each calendar year, or each 12-month period, and the employee was eligible to earn at least three days or 24 hours of sick leave or paid time off within nine months of employment. 

AB 304 also amends the Original Act by providing employers with another method of calculating a non-exempt employee’s rate of pay. The Original Act required employers to calculate the rate of pay by dividing the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment. The Amended Act gives the employer the option of calculating the rate of pay in the same manner as the regular pay for the workweek in which the employee uses paid sick time, regardless of whether the employee works overtime in that week.  For exempt employees, the Amended Act requires that paid time for exempt employees be calculated in the same manner as the employer calculates wages for other forms of paid leave. 

While the Original Act and Amended Acts both require that employers keep records documenting the hours worked and paid sick days accrued and used by an employee for at least three years, and then made available to the Labor Commissioner, the Amended Act clarifies that an employer has no obligation to inquire into or record the purposes for which an employee uses sick leave or paid time off. 

The Original Act was also amended to expand its definition of “employees in the construction industry” so that the employee no longer has to be performing “on-site” work.  Furthermore, the Original Act was amended so as to exclude public sector employees who are recipients of retirement allowances and employed without reinstatement into their respective retirement system pursuant to certain state laws.

The Original and Amended Acts both require employers to give notice to employees regarding the paid leave policy.  Employers are required to display an informational sign detailing the new laws in a location where employees can easily see it.  The sign may be as small as 8 ½” x 11” (the size of a standard sheet of printer-paper). Under the Amended Act, when an employer offers “unlimited” paid sick leave or time off to an employee, an employer may simply write “unlimited” on the employee’s wage statement or at the top of a written notice.

Employers are also required to have employees read and sign a written notice informing them of their new rights.

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.