CALIFORNIA S PAID SICK LEAVE LAW NO GET WELL CARD FOR EMPLOYERS PAUL LYND, ESQ. DECEMBER 18, 2014 AGSAFE

CALIFORNIA S PAID SICK LEAVE LAW NO GET WELL CARD FOR EMPLOYERS PAUL LYND, ESQ. DECEMBER 18, 2014 AGSAFE

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PRESENTER Partner, Labor and Employment group Paul Lynd, Esq. Nixon Peabody LLP San Francisco, CA 415-984-8235 plynd@nixonpeabody.com Represents a diverse group of clients in litigation in federal and state courts, as well as before administrative agencies General employment matters, with an emphasis on wage and hour and agriculture industry issues. Advice and strategy, development and revisions of policies and plans, litigation prevention and defending employers in individual claims and class actions. Published California and federal decisions on important wage and hour issues involving bonus plans and class certification issues.

THE NEW PAID SICK LEAVE LAW Assembly Bill 1522 Healthy Workplaces, Healthy Families Act of 2014 Mandates most California employers provide paid sick leave Requires at least 24 hours or three days of paid sick leave Protections for employees who use sick leave New recordkeeping and wage statement requirements Law is unclear, but Labor Commissioner gave some new guidance

DON T BE IN DENIAL: THE LAW APPLIES TO YOU! Paid sick leave requirement applies generally Applies to anyone employing another under any appointment or contract of hire It covers any employee who works in California for 30 or more days within a year from the commencement of employment The law does not require any minimum number of employees or minimum number of hours worked per week, nor any general industry exemption Yes, the law applies to part-time, temporary, and seasonal employees including in agriculture.

WHO IS EXEMPT? Exemptions are very narrow: (1) Collective bargaining agreement providing for paid sick days, with final and binding arbitration; (2) Construction industry union contracts entered into before 2015 and that waive the law; (3) In-Home Supportive Services (IHSS) workers; and (4) Airline flight deck and cabin crew employees. If you are not within one of these exceptions, the new law covers your employees.

WHAT IF WE ALREADY HAVE SICK LEAVE OR PTO? Some employers already have sick leave policies. Other provide Paid Time Off (PTO) that covers vacation and sick leave. Are we set? No! Employers still need to make sure that their policies have required terms, that they cover all employees, and that they still comply with the notice and posting requirements. Regardless of whether employers have an existing policy, most every employee will have some steps to take.

WE LL JUST LET THE FLC OR OUR STAFFING AGENCY DEAL WITH IT... GUESS AGAIN Many agriculture employers have labor through a farm labor contractor, or even from a temporary agency These individuals will be covered, with either their employer (with a FLC) or the joint employers (with a temporary agency) responsible Assembly Bill 1897, effective January 1, 2015, expands liability for wage violations to businesses that use labor from contractors (new Labor Code section 2810.3) Existing law, in Labor Code section 2810 imposes liability in farm labor for a contract where entity knows or should know contract does not have sufficient funds to comply with law

WHEN IS THE LAW EFFECTIVE? Most people have operated on the assumption that the entire law is not effective until July 1, 2015 Bill states that employees entitled to paid sick days beginning July 1, 2015 Bill is somewhat unclear, with argument made that some sections effective on January 1, 2015 Labor Commissioner reads law as effective on January 1 for qualifying period and employee notice, but that accrual and right to use sick leave does not begin until July 1 Labor Commissioner provided draft notice and poster

WHAT SICK LEAVE MUST BE PROVIDED? At least 24 hours or three days per year, with two ways possible Accrual method: Employee accrues one hour for every 30 hours worked. Exempt employees accrue based on a 40-hour workweek. Accrual must begin on July 1, 2015 or, if hired afterward, on the first day of employment. Granting sick leave up front: Grant 24 hours or three days of sick leave each year. Avoids tracking accruals, but leave possibly could be used immediately. Part-time employees: Law does not provide for pro-rating and granting less sick leave.

CARRYING OVER UNUSED SICK LEAVE Under accrual method, unused sick leave must carry over into the next year. Employer using accrual method may impose a cap on accrual of 48 hours and six days. Any cap should be written into the employer s policy. With granting leave up front, however, employer does not have to carry over unused leave to the next year. In all cases, employer only has to let an employee use up to 24 hours or three days of sick leave in a year, even if employee has a larger sick leave balance.

USE OF SICK LEAVE Sick leave may be used for (1) diagnosis, care, or treatment of a health condition, or (2) for victims of domestic violence, sexual assault, or stalking to obtain treatment or relief Sick leave may be used not only for employee, but also to care for certain family members Family members include child or stepchild regardless of age, parent, spouse, state-registered domestic partner, grandparent, grandchild, sibling, and parents-in-law through spouse or state-registered domestic partner Separately, kincare law remains in place

WHEN CAN AN EMPLOYEE USE SICK LEAVE? Employee may use accrued or available sick leave after 90 days of employment, even though accrual begins on law s effective date Labor Commissioner reads this period as subject to a January 1 effective date, so employee may meet qualifying period by July 1 date Employee should provide reasonable advance notification of need for leave not always possible Law does not address medical notes or verification Employee may set minimum period for use, but not less than two hours

EMPLOYEE PROTECTIONS Employer cannot deny right to use available sick leave Employer cannot discharge, threaten to discharge, discriminate against, demote, suspend, or take other adverse action against employee for using or attempting to use sick leave Unclear if these protections apply to all sick leave or only the 24 hours or three days per year required Employers should review policies to impose any automatic discipline or points for absences or excessive absences, and be careful with any discipline for absences

PAYING SICK LEAVE Employer must pay by payday for the next pay period Pay for sick leave shall be the employee s hourly wage It gets complicated if the employee has been paid differently or had more than one hourly rate in past 90 days, was paid on commission or piece rate, or was a non-exempt salaried employee In those cases: Divide the employee s total wages, not including overtime premium pay, by the total hours worked in the full pay periods of the prior 90 days of employment. Salaried exempt employees? Probably 40-hour week.

WHAT HAPPENS AT THE END OF EMPLOYMENT Vacation and PTO have to be cashed out New law expressly says that unused sick leave does not have to be cashed out Yet, the end of employment may not mean that unused sick leave goes away: If employee rehired within one year from the date of separation, and previously accrued and unused paid sick days shall be reinstated! Reinstated paid sick days likely could be used immediately.

ITEMIZED WAGE PAYMENT STATEMENTS California s many requirements for itemized wage payment statements just got more complicated. Now, wage payment statements must show the amount of available paid sick leave or PTO. Alternatively, employer may provide a separate writing on the designated payday showing this information.

RECORDKEEPING New law requires that employees keep records of all paid sick leave accrued and used. Law says records should be kept for three years. Four years is recommended because claims may have a four-year limitations period under Unfair Competition Law. What if employer does not keep records? A lack of required records means that the law presumes employee entitled to maximum number of hours accruable, despite any previous sick leave use.

REVISED WAGE DISCLOSURE NOTICE Since 2012, California has required employers to provide employees with a wage disclosure notice. New law added requirement that notice say that an employee may accrue and use sick leave; may not be terminated or retaliated against for using or requesting the use of accrued paid sick leave; and has a right to file a complaint against an employer who retaliates. Labor Commissioner has provided revised template of wage disclosure notice, with options. Available on Labor Commissioner s website: www.dir.ca.gov/#4

REVISED WAGE DISCLOSURE NOTICE

NEW PAID SICK LEAVE POSTER The new law requires another new poster for employers walls. The Labor Commissioner released the new sick leave poster. Available on Labor Commissioner s website: www.dir.ca.gov/#4 Good idea to post now.

NEW PAID SICK LEAVE POSTER

CONSEQUENCES OF NON-COMPLIANCE Employee can file a Labor Commissioner claim for not providing paid sick days, or for retaliation Civil lawsuit also possible Not providing paid sick days as required: Liable for dollar value of sick days x 3, or $250, whichever is greater, up to $4,000 per employee For other harm, a civil penalty of up to $50 per day that a violation occurred or continued, u[p to $4,000. Labor Commissioner also can recover costs of investigation, with $50 per employee per day that a violation occurs or continues

LOCAL ORDINANCES REMAIN IN EFFECT Law does not pre-empt local sick leave ordinances Currently, San Francisco and San Diego have them Employers must comply with both state law and local ordinance

WHAT TO DO? Review existing policies and practices now Make revisions now to existing policies to comply with the law. If you do not provide sick leave, prepare and implement a policy now. In all cases, decide whether you want a policy that complies with the minimum of the law or you want to go further. Prepare or revise policies as appropriate. Comply with notice and posting requirements Comply with wage statement requirements now

CALIFORNIA S PAID SICK LEAVE LAW NO GET WELL CARD FOR EMPLOYERS DECEMBER 18, 2014 AGSAFE Paul Lynd, Esq. 415-984-8235 plynd@nixonpeabody.com Nixon Peabody LLP One Embarcadero Center 18 th Floor San Francisco, CA 94111 This presentation contains images used under license. Retransmission, republication, redistribution, and downloading of this presentation, including any of the images as stand-alone files, is prohibited. This presentation may be considered advertising under certain rules of professional conduct. The content should not be construed as legal advice, and readers should not act upon information in this publication without professional counsel. 2013. Nixon Peabody LLP. All rights reserved.