California Employment Law Update Taking Effect

June 2015

This past January, The Rose Group published its Newsletter regarding California’s new paid sick leave law, which becomes effective July 1, 2015. In light of the extensive and positive feedback our Newsletter generated, and given that the paid sick leave law takes effect in a few weeks, it is timely to reissue the Newsletter now as a reminder. Please feel free to contact us should you have any questions about California’s paid sick leave law.

Ten Important Things You Need To Know About California’s New Mandatory Paid Sick Leave Law

Effective July 1, 2015, California’s new mandatory paid sick leave law (AB 1522) requires virtually all employers to provide workers a minimum of three days of paid sick leave per year. This new statute is codified as California Labor Code sections 245-249.

There are many nuances to California’s paid sick leave law that will require employers to modify their existing paid sick leave or paid time off policies, as well as payroll, recordkeeping and employee notice procedures. Every entity with employees in California should determine what steps to take to become compliant.

Here is our list of 10 of the most important components of California’s paid sick leave law.

1. Beginning January 1, 2015, California employers must post notice of the mandatory paid sick leave law.

Although employee accrual and use of mandatory sick leave does not begin until July 1, 2015, employers are required to inform employees of the new law by January 1, 2015. A poster explaining the new law must be displayed in a conspicuous place at all worksites such as bulletin boards. A poster created by the California Labor Commissioner for this purpose can be downloaded at http://www.dir.ca.gov/DLSE/Publications/Paid_Sick_Days_Poster_Template_%2811_2014%29.pdf.

2. Beginning January 1, 2015, California employers must begin using the
California Labor Commissioner’s revised Wage Theft Notice to Employee Form–
which references employee rights under the new sick leave law.

The Labor Commissioner updated its Wage Theft Prevention Act / California Labor Code Section 2810.5 Notice to reference employee rights under the new sick leave law. Employers should use the new Notice beginning on January 1. The revised Notice can be downloaded at http://www.dir.ca.gov/DLSE/Publications/LC_2810.5_Notice_%28Revised-11_2014%29.pdf

3. All California employers regardless of size are covered under the new law.

There is no exemption for small employers. The mandatory paid sick leave law applies to every California employer, even if the employer only has one employee.

4. All full and part-time California employees are eligible to receive sick pay.

Most California employees, including part-time, per diem, and temporary employees, who work for an employer for at least 30 days (on or after January 1, 2015), are covered by the paid sick leave law There are some specific exceptions to coverage under the statute that are applicable to home care workers, employees covered by collective bargaining agreements and airline flight crews.

5. Employers have the option to implement workplace policies limiting their employees’ maximum accrual and year to year carryover of sick leave.

Starting July 1, 2015, employees will earn at least one hour of paid leave for every 30 hours worked. That equates to slightly more than eight days per year for an employee who works 40 hours per week throughout the year. However, under the paid sick leave law the employer can issue a policy capping its employees’ maximum accrual of sick leave at 48 hours or 6 days. With one important exception, accrued sick leave carries over to the following year of employment. If, by policy, the employer provides employees with a lump-sum sick leave bank of 24 hours/3 days at the beginning of the year, it is not required to allow employees to carryover unused accrued sick leave into the next year.

6. Employers have the option to implement workplace policies limiting their employees’ use of sick leave to three days per year.

Regardless of how much paid sick leave an employee has accrued, by policy the employer can limit the amount of sick leave that an employee can use in one year to 24 hours (three days).

7. Employees can use mandatory sick leave for their own illness, due to illness of family members, and for doctor appointments.

An employee can use accrued sick leave related to his or her own, or a family members’, illness or need for preventive care. The statute defines “family members” to include parents, children, foster and step-children, grandparents, siblings, and domestic partners.

8. Employers must notify employees every pay period of their paid sick leave balances and separately track each employee’s sick leave accrual and use.

The paid sick leave law requires that employers include on every itemized wage statement (or other document issued the same day as the employee’s paycheck) how many hours of accrued sick leave the employee has available. Employers that use a third party for payroll should confirm that the payroll service has modified its itemized wage statement template to include an entry for accrued sick leave. Also, employers must keep personnel file type records showing how many paid sick leave hours an employee has earned and used for the past three years.

9. There is no requirement to compensate terminating employees for their unused accrued sick leave.

Unlike California’s vacation pay laws, the paid sick leave law does not require employers to pay out accrued unused sick leave at time of an employee’s termination.

10. Employers with existing hybrid PTO policies need to rethink their paid leave policies.

The paid sick leave law does not require an employer to provide additional paid sick days if the employer has a paid time off (PTO) policy that allows for employees to accrue and use sick leave for the same purposes and under the same conditions as specified in the new statute. Nevertheless, many employers will find that their current PTO policy fails to meet all of the sick leave law’s requirements and protections. For example, an existing PTO policy that excludes from coverage those employees who have not completed one year of service, and/or part-time and temporary employees, does not comply with the paid sick leave law. Trying to reconfigure a PTO policy to bring it in step with the statute may be a challenge. One option is to create a separate sick leave policy that applies only to those workers not eligible to earn PTO. Another option is to replace PTO by reverting back to having one policy for paid vacation and a separate policy for paid sick leave.

For additional information concerning California’s new mandatory paid sick leave law, contact Ken Rose or Robert Rose at 619.222.1088 or at our email addresses listed above. We also suggest you read the California Division of Labor Standards Enforcement’s FAQs explaining how it will interpret this new law. The link is http://www.dir.ca.gov/dlse/Paid_Sick_Leave.htm.

California’s paid sick leave law is just one of the numerous new employment laws enacted by California’s Legislature and Governor that become effective in 2015. For a summary of the many new employment laws, we recommend you read the California Department Of Industrial Relations’ “2014 Legislative Report.” The link is http://www.dir.ca.gov/OPRL/Leg_Digest2014.pdf. These new laws should serve as a reminder to out-of State and foreign employers with California-based employees that California’s employment laws are often cutting edge and more comprehensive and complex than analogous federal law or the laws of other states.

ABOUT THE ROSE GROUP

The Rose Group, APLC was founded in June 2006 by San Diego, California-based employment law specialist Ken Rose. The Rose Group is a boutique firm dedicated to providing cost-effective, practical advice and counsel to employers and employees on domestic and international employment law matters and in related litigation. The Rose Group is often called upon to conduct sensitive workplace investigations. In addition, through Rose Mediation www.rosemediation.us, Ken Rose serves as a neutral mediator and arbitrator in employment law and other civil litigation matters. Ken Rose is listed in the 2014 Who’s Who Legal: Management, Labour & Employment, as well as the 2015 San Diego Super Lawyers. The Rose Group recently added attorney Robert Rose to the practice, and moved its San Diego offices to 10021 Willow Creek Road, Suite 200, San Diego, CA 92131.