This newsletter that was previously sent out was updated as of 12/30/2014 to reflect the most recent information about this new law. Keep in mind, this bill doesn’t go into effect until July 1, 2015 and while no changes are expected in the actual regulation, there is expected to have some clarifications made prior to July by the California Department of Labor Standards Enforcement (DLSE) otherwise known as the Labor Commissioner in the form of an opinion letter.
The New Mandated Sick Leave also known as the “Healthy Workplaces, Healthy Families Act of 2014…What Every Employer Should Know?
A law was passed in California in 2014 that is finding some employers feeling a little “sick”. The law referred to as the “Healthy Workplaces, Healthy Families Act of 2014” or AB 1522 has been quite controversial since it requires employers of all sizes and almost all industries, for the first time to pay sick leave to their employees.
What is AB 1522?
Assembly Bill 1522 was signed into law by Governor Brown on September 10th, 2014. This bill will change the way almost every employer in California handles their sick pay plans. Most important if an employer doesn’t offer sick pay plans now, they will be required to do so starting July 1, 2015.
While many laws in California have size requirements, meaning a certain threshold of employees, AB 1522 does no such thing. Therefore an employer with as little as one employee would be required to offer this benefit. This law also includes all employees including: full time, part time, seasonal and temporary workers.
There are a few (very few) exceptions of companies that don’t have to comply with this law. They are: employees covered by collective bargaining agreements (CBAs) with certain provisions, construction industry employees covered by a CBA, providers of in-home supportive services, and certain individuals employed in the airline industry.
When is an employee eligible?
An employee who, after July 1, 2015, works in California for 30 or more days within a year from the commencement of employment is entitled to paid sick days. Accrual begins on the first day of employment or July 1, 2015, whichever is later.
What is the accrual requirement?
The law requires that the employee will accrue paid sick leave at a rate of no less than one hour for every 30 hours worked. Exempt employees will be deemed to work 40 hours per week for accrual purposes, unless their normal workweek schedule is less than 40 hours, in which case they will accrue paid sick leave based upon that normal workweek.
When does the accrual begin?
Per the regulation an employee shall be entitled to use 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. Of course an employer can offer accrued sick time sooner than 90 days if it chooses.
Accrual Carry Over
According to the legislation, accrued paid sick days shall carry over to the following year of employment. However, an employer may limit an employee’s use of paid sick days to 24 hours or three days in each year of employment. This section shall be satisfied and no accrual or carry over is required if the full amount of leave is received at the beginning of each year, in accordance with the bill.
1st Option- SB 1522 contemplates two ways for employers to comply with the sick leave law. First, employees can be allowed to accrue sick time as they work. In that case, employees must receive at least one hour of paid sick leave per every 30 hours worked. Employers are not obligated to allow total accrued paid sick leave to exceed 48 hours or six days. Employers may implement a policy that requires that employees wait 90 days until they can use whatever sick leave has been earned. They also limit the use to three days per year.
2nd Option- Another option for the employer is to grant three full days of sick leave to all employees at the start of the year and upon hire, and then they need not deal with the accrual or carry over. The goal of the new law is for employees to have three full days of sick leave to use at the start of every year. In this “lump-sum” situation, an employee won’t be able to carry over unused sick days but will get three new sick days the following year.
Maximum Accrual Rate
An employer has no obligation under this section to allow an employee’s total accrual of paid sick leave to exceed 48 hours or 6 days, provided that an employee’s rights to accrue and use paid sick leave under this section are not otherwise limited. This six-day accrual limit appears intended to ensure the employee has their full sick leave rights both for the instant year and the beginning of the next year. Under the new law, accrued sick leave “shall carry over to the following year of employment,” however, the employer may cap the accrual at no less than 24 hours or three days.
An employer is not required to provide additional paid sick days in accordance with this law as long as it meets these standards:
- The employer has a paid leave policy or paid time off policy already in place.
- The employer makes available an amount of leave that may be used for the same purposes and under the same conditions as specified in the regulation.
- The employer plan satisfies the accrual, carry over, and use requirements as this plan.
- The employer provides no less than 24 hours or three days of paid sick leave, or equivalent paid leave or paid time off, for employee use for each year of employment or calendar year or 12-month basis.
- An employee may use accrued paid sick days beginning on the 90th day of employment (unless the accrual method starts with the first day of employment or first day of the New Year).
- An employee may request paid sick days in writing or verbally. An employee cannot be required to find a replacement as a condition for using paid sick days.
- An employee can take paid leave for employee’s own or a family member for the diagnosis, care or treatment of an existing health condition or preventive care or for specified purposes for an employee who is a victim of domestic violence, sexual assault or stalking.
Who is considered a “family member” under this regulation?
The answer is somewhat complicated. In most employers the definition can depend on whether they have to comply with certain laws like Family Medical Leave Act (FMLA) or California Family Rights Act (CFRA) or Kin Care. This law has its own definition and must be applied accordingly as listed below:
- Spouse or registered domestic partner
- Grandparent (outside of kin care and FMLA/CFRA laws)
- Grandchild (outside of kin care and FMLA/CFRA laws)
- Sibling (outside of kin care and FMLA/CFRA laws)
What happens at termination?
As most employers know, if you offer vacation pay in California it is considered wages and therefore any unused accrued time must be paid out upon termination. THE GOOD NEWS…..this is not required or the case for this regulation. An employer is NOT required to provide compensation to an employee for accrued, unused paid sick days upon termination, resignation, retirement, or other separation from employment.
If an employee separates from an employer and is rehired by the employer within one year from the date of separation, previously accrued and unused paid sick days shall be reinstated. The employee shall be entitled to use those previously accrued and unused paid sick days and to accrue additional paid sick days upon rehiring.
Advance Sick Days
An employer may lend paid sick days to an employee in advance of accrual, at the employer’s discretion and with proper documentation
Under this bill, an employer cannot require employees to locate a replacement worker to cover days on which the employee uses paid sick days. This is a common practice in the restaurant and retail industries and it is unclear how those industries will deal with this challenge.
New pay stub rules
Effective in July 2015, employers must track and display the number of paid sick days or hours available at that time on the employee’s pay stub, or the employer can give the employee a separate writing each pay day providing that information. The Act also requires employers to keep for at least three years records regarding employees’ paid sick leave accrued and used, and employers must use a new Wage Theft Prevention Act Notice on hiring non-exempt employees.
How do I pay the employee for the sick day?
Paid sick leave must be compensated at the employee’s hourly wage, and must be paid no later than the next payday after the sick leave was taken.
- The employer is required under this bill to provide written notice to all employees that sets forth the amount of paid sick leave available or paid time off leave. This can be done on their itemized wage statement or in a separate document provided on the designated pay date with the employee’s paycheck. This would be a good time to see if your payroll provider can add this information (along with any accrued vacation) on the employee paycheck to insure this requirement is met.
- The employer must make sure to have the correct notices and postings that should be out early next year.
- The employer will also be responsible for recordkeeping at least 3 years for documenting the hours worked and paid sick days accrued and used by the employee.
Employers need to update all policy, procedures and employee handbooks. Employers should educate their managers and supervisors and HR departments on the new law and make sure they understand how to handle sick leave requests. While we have listed many of the aspects of this regulation, it is quite in depth and this article is not all inclusive. For the actual regulation the link is listed here: Click Here
How can JR Consulting?
JR Consulting can assist in writing new policies and procedures and in updating an existing employee handbook or creating a new handbook for employers who don’t currently have one.
Sources used for portions of the Newsletter include: The State of California Legislative website, The SHRM website, the DOL Website and the California Chamber of Commerce.