Breaking Down California s New Sick Pay Law

Size: px

Start display at page:

Download "Breaking Down California s New Sick Pay Law"

Stephen Woods
6 years ago
Views:

1 Employment & Labor Law Breaking Down California s New Sick Pay Law Originally published in Law360, September 14, 2014 James P. Baker, Jennifer L. Field and Emily Lynn Garcia-Yow, Baker & McKenzie LLP The fourth time was the charm. In three prior years, California legislative committees have tried to pass a statewide sick leave bill. This year, the Legislature was finally successful. On Sept. 10, 2014, Governor Jerry Brown signed AB 1522 the Healthy Workplaces, Healthy Families Act of 2014 ( HWHFA ). Effective July 1, 2015, California law will mandate paid sick leave accrual for employees statewide at a rate of one hour for every 30 hours worked, allowing employers to cap employee use of paid sick leave to 24 hours (or three days) per year, with accompanying notice and recordkeeping requirements. Sponsors of the bill claim that more than 75 percent of the state s low-wage workers (about 6 million people) lack paid sick days in California, constituting a public health hazard by forcing workers to go to work sick or to send their sick children to school or child care. The bill s sponsors assert AB 1522 will encourage sick workers and children to stay home from work and school, preventing the spread of disease and contagion in the community, schools and the workplace. Who is Subject to this Law? Employers Employers that employ workers within the state of California are covered by the HWHFA. Unlike other paid sick leave ordinances, California s law has no exclusions for small employers or nonprofits. The term employer is broadly defined as any person employing another under any appointment or contract of hire and includes the state, political subdivisions of the state, and municipalities. Employees Any employee that works in California for 30 or more days within a year is entitled to accrue and take paid sick days under this law. The HWHFA applies to all employees, including full-time, part-time and exempt 1

2 employees. The law contains no exclusion for non-california residents, or seasonal or migrant workers. The following limited exceptions apply: Employees covered by certain collective bargaining agreements Providers of in home supportive services of Cal Welfare Employees of an air carrier as a flight deck or cabin crew member who are provided time off equal to that provided in the HWHFA What Sick Time Benefits are Required? Paid Sick Time Accrual Employees must accrue at least one hour of paid sick time off for every 30 hours worked. For accrual purposes, exempt employees are deemed to work 40 hours per week, or the normal workweek if their scheduled workweek is less than 40 hours. Alternatively, employers may have a paid leave policy or paid time off policy that provides at least 24 hours, or three days, of paid sick leave for employee use, for each year of employment, calendar year, or 12-month basis. The policy must provide that such sick time can be used for all the same purposes and under the same conditions as required by the HWHFA. If an employee separates from employment and is later rehired within one year, previously accrued and unused paid sick days must be reinstated. Uses Employees must be allowed to use accrued sick time for: their own health condition or preventative care a family member s health condition or preventative care if the employee is a victim of domestic assault, sexual violence, and/or stalking and needs to take time off related to this The HWHFA defines family member to include: a child regardless of age or dependency (including adopted, foster, step, or legal ward) parent (biological, adoptive, foster, step, in-law, or registered domestic partner s parent) spouse registered domestic partner grandparent grandchild siblings Employers are allowed to establish minimum use requirements of up to two hours when employees use paid sick time. 2

3 Annual Cap on Accrual Employers may limit or cap an employee s accrual of paid sick time to 48 hours, or six days. Annual Cap on Use While employees accrue and carry over at a much faster rate, an employer can limit or cap an employee s use of sick days to 24 hours, or three days, in each year of employment. Carry Over Accrued sick days must carry over from year to year. Employers who have a paid leave policy or paid time off policy that provides for at least 24 hours, or three days, of paid sick leave provided at the beginning of the calendar or anniversary year each year does not need to provide carry over. Payout When used, paid sick time must be compensated at the same wage rate the employee earns during regular work hours. If the employee earns different wage rates during the first 90 days of employment (for example, commissioned non-exempt employees), the HWHFA sets calculations to determine the appropriate sick pay wage rate. Employees must be paid sick time in the next payroll period after the sick leave is taken. Unlike accrued vacation, employers are not required to pay out accrued, unused sick days to employees when employment ends. Existing PTO Policies Employers who have existing paid leave, paid sick, or paid time off policies are not required to provide additional paid sick days, provided the employer s current policy makes available an amount of paid leave that may be used for the same purposes and under the same conditions as specified in the HWHFA, and the policy does either of the following: 1. satisfies the minimum accrual, carry over, and use requirements of the HWHFA 2. permits employees to take no less than 24 hours or three days of paid sick leave, or equivalent paid leave or paid time off, each year of employment or calendar year or 12-month basis When can Employees Start Accruing and Using Paid Sick Time? Beginning on July 1, 2015, employees who work in California more than 30 days within a year must begin accruing sick pay under the law. For new hires on or after July 1, 2015, covered employees must accrue time off beginning the first day of employment. Suspended accrual during 3

4 probationary periods is not permitted. Employees must be allowed to use accrued paid sick time no later than the 90th day of employment. What Notice, Postings and Recordkeeping is Required? Notice by Employees Under the HWHFA, employees can be required to provide reasonable advance notification when the need for paid sick time off is foreseeable. Unforeseeable sickness need only be reported as soon as practicable. Employees cannot be required to find replacement workers during their paid sick days. New Hire Notice Paid sick leave entitlements must be included in the new hire notice employers provide to newly hired non-exempt employees under Labor Code Payday Notice Every payday, an employer must provide employees with written notice of how much sick time the employee has accrued and available for use. Postings Employers are required to display a posting explaining employees rights under the HWHFA to mandatory sick time pay. The California Labor Commissioner will be preparing the poster in coming months. Recordkeeping Employers must maintain employment records going back three years showing hours worked, paid sick time accrued and paid sick time used. The California Labor Commissioner may inspect records at California employer locations. If an employer fails to maintain adequate records under this law, the employee is presumed to be entitled to the maximum sick pay that can be accrued under the HWHFA. How is the Law Enforced? The law assigns enforcement authority to the California Labor Commissioner, the agency that already has enforcement power over California employee wage claims, and the California attorney general. Not surprisingly, the HWHFA explicitly prohibits employers from discriminating or retaliating against employees who exercise their rights to request or use paid sick time. The HWHFA also creates a rebuttable presumption of retaliation if the employer denies the use of sick time, terminates, demotes, suspends, or otherwise discriminates against an employee within 30 days of: filing a complaint with the Labor Commissioner or alleging a violation of the HWHFA; the employee s cooperation with an investigation of an alleged violation of the HWHFA; or the employee s opposition to a policy or practice that is prohibited by the HWHFA. 4

5 This may qualify as Attorney Advertising requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome. Employers that violate the law can face up to three times the unpaid sick pay due, and administrative fines which vary from $50 to $4,000 per violation, depending on the nature of the violation. The law also authorizes the labor commissioner or the attorney general to recover civil penalties, attorneys fees, costs, and interest against violating employers, as well as to reinstate employees. The HWHFA does not expressly permit employees to bring private civil lawsuits against employers for violations under this statute, however employees may be able to bring wrongful termination tort claims for alleged violations that result in terminations. In addition, California employees may be able to bring claims under the Private Attorney General s Act (PAGA), and can seek equitable, injunctive, and restitutionary relief (presumably an order from the court to do or refrain from some act, and lost sick pay due to the employee), and reasonable attorneys fees and costs. How can Employers Comply? Employers with California employees need to take a magnifying glass to their sick time and leave policies to ensure that they do not inadvertently overlook a new requirement. To comply with this new law, employers with employees in California should: Review their current leave, sick time or paid time off policies to ensure they meet or exceed the requirements of the HWHFA. Employers must amend those policies to allow for the same minimum accrual rate and uses as required under the HWHFA, including when employees start to accrue, accrual rates, covered employees and carry over. Update the payroll and recordkeeping systems to calculate the correct accrual and use of paid sick time, maintain those records for at least three years, and provide the required payday notices. Employers who already provide paid sick time under the San Francisco Paid Sick Leave ordinance are not necessarily in compliance with the HWHFA, and vice-versa. The two laws have varying differences with respect to permitted uses, caps on accrual, notice and recordkeeping. Employers with workforces in San Francisco will need to consider separate or harmonized policies that comply with the city ordinance and the state law as applicable. Some employers in California provide unlimited sick time, without any accrual, to certain groups of California employees. To comply with the HWHFA, such policies must allow for employees to use paid sick time in no less than the minimum accrual rate and for permitted uses as required under the HWHFA. If the policy does not include an accrual and record-keeping mechanism, or required payday notices, the employer may still be subject to fines for technical noncompliance Baker & McKenzie. All rights reserved. Baker & McKenzie International is a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a partner means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an office means an office of any such law firm.

California Healthy Workplace Healthy Family Act of 2014

California Healthy Workplace Healthy Family Act of 2014 Presented by J. Gregory Grisham, Esq. 2015 Leitner, Williams, Dooley & Napolitan, PLLC References 1. California Department of Industrial Relations website and related materials (slides 2-25) http://www.dir.ca.gov/dlse/ab1522.html