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California’s Proposed Sick Leave Law Does More Than Provide Paid Time Off

UPDATE:  Governor Brown has announced he will sign AB 1522 today. This means that effective July 1, 2015, any employee who works in California for 30 or more days within a year from the commencement of employment is entitled to paid sick days. Unless otherwise exempt from the law, California employees will accrue paid sick days “at the rate of not less than one hour per every 30 hours worked.” Employees can use the accrued paid sick days “beginning on the 90th day of employment, after which day the employee may use paid sick days as they are accrued.” Unused accrued paid sick days carry over to the following year of employment. An employer may “limit an employee’s use of paid sick days to 24 hours or three days in each year of employment.”

Employers doing business in California should revise their handbooks to reflect the new laws.

Last week AB 1522 made it one step closer to becoming law. Hailed as the Healthy Workplaces, Healthy Families Act of 2014, this bill does more than just provide for mandatory sick leave for employees. It also contains significant penalties for failure to comply with the law, prohibits employers from retaliating against individuals for engaging in certain protected conduct, and mandates new record-keeping requirements.

The new law will apply to almost all employers. Unlike some bills, there is no distinction between small employers and larger employers that can more easily absorb the additional costs. The only employees exempt from the proposed law are employees with collective bargaining agreements that provide for similar benefits and employees working under the In-Home Support Services program.

Effective July 15, 2015, employers must allow employees to accrue up to 3 days of paid time off to be used for their own illness or a family member’s illness each year. The sick leave begins to accrue after 30 days of employment and must carry over to the following year. Employers can cap the paid sick leave to a maximum of 6 days, but employees must be allowed to use sick leave in increments not to exceed 2 hours. Employers can limit an employee to using no more than 3 sick days per year.

Unwary employers may not realize that this new law will require employers to track the hours worked by salaried employees who are otherwise exempt from California’s overtime laws. The paid sick leave law will apply to exempt and non-exempt employees. The bill requires employers to track the hours worked by all employees (including exempt employees) and the sick leave is taken, and to report those hours on the employee pay stubs or a separate written statement with each pay period. This means employers may need to require exempt employees to start reporting hours worked. Alternatively, an employer could allow the paid sick leave to immediately accrue and forego the time tracking for exempt employees, but the employer must still report the available sick time to the employee each pay period.

Employees paid on a piece-rate, commission basis, or paid with different hourly rates, must be paid the average effective hourly rate, not including overtime premium pay, based on the employee’s earnings over the 90 days preceding the time off.

Employers may not discharge, threaten to discharge, demote, suspend or in any other manner discriminate against an employee for using accrued sick leave, or who complains to the Labor Commissioner or participates in an investigation regarding a violation of the new paid sick leave law. There is a rebuttable presumption of retaliation if an employer takes action against an employee within 30 days of the employee opposing any policy or practice prohibited by the statute.

The Labor Commissioner can issue penalties for various violations of the new statute, including treble damages when an employer fails to provide the paid time off. Employees terminated in violation of the law are entitled to reinstatement and back pay.

Given the fact that Governor Brown pushed for the bill, I suspect the governor will soon sign the bill into law. If passed, employers will need to modify handbooks, provide new notices to all employees regarding the new paid sick leave, and post new posters identifying the employee’s rights and employer’s obligations.

The Law Office of Phillip J. Griego
95 South Market Street, Suite 520
San Jose, CA 95113
Tel. 408-293-6341
Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
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