On July 13, 2015, just 12 days after California's "Healthy Workplaces, Healthy Families Act of 2014" ("California Paid Sick Leave Law"), codified at Labor Code sections 245-249, went into effect, the California Legislature passed, and Governor Jerry Brown signed, Assembly Bill 304, amending the California Paid Sick Leave Law, effective immediately.
The Amendment alters or clarifies several provisions of the California Paid Sick Leave Law, including pay rate calculations, accrual methods, accrual reinstatement, recordkeeping requirements, notice requirements, eligibility, and specific industry requirements.
Employers may now calculate non-exempt paid sick leave pay rates by either calculating the regular rate of pay for the workweek in which the employee takes Paid Sick Leave or dividing the employee's total wages, exclusive of overtime premium pay, by the employee's total hours worked during the prior ninety days of employment. Employers must calculate exempt employees' sick pay in the same manner as other forms of paid leave.
Additionally, employers may now allow employees to accrue paid sick leave on a basis other than one hour for every thirty hours worked, so long as paid sick leave is accrued on a regular basis and employees accrue at least twenty-four hours or three days of paid sick leave by the 120th calendar day of employment or each calendar year, or in each twelve-month period.
The Amendment also allows employers to satisfy paid sick leave requirements through paid time off policies in effect prior to January 1, 2015, which use an accrual method other than one hour for every thirty hours worked, provided that employees accrue time off on a regular basis, accrue at least eight hours or one day off within three months of employment or each calendar year, or in each twelve-month period, and employees are eligible to earn at least twenty-four hours or one day off within nine months of employment.
However, if an employer modifies its preexisting policy, the employer must follow the accrual methods stated in the statute. Therefore, this exception does not apply to employers that changed their policies to comply with the Paid Sick Leave Law.
Further, the Amendment clarifies that employers implementing a "frontloaded" entitlement system (wherein employees are provided an upfront lump sum of paid sick leave, rather than accruing paid sick leave over time) must make the entitlement available for use by the end of the 120th day of employment.
The Amendment also clarifies that employers are not required to reinstate paid sick leave accruals of employees rehired within one year of termination if the employer paid out the paid sick leave accrual at the time of termination.
This article does not provide a full description of all statutory requirements and revisions. For more information regarding the Paid Sick Leave Law and the Amendment, please visit Jackson Lewis P.C.'s California Workplace Blog (californiaworkplacelawblog.com). Also, the California Labor Commissioner's website (www.dir.ca.gov) contains helpful information, including "Frequently Asked Questions," which the Labor Commissioner is in the process of updating to address the Amendment.
Written by John P. Nordlund, attorney at law, for Jackson Lewis PC.