California Governor Brown signed the Healthy Workplaces, Healthy Families Act of 2014 (the “Act”) which will provide qualifying California employees with paid sick leave beginning July 1, 2015. Modeled on a Connecticut law and the San Francisco Paid Sick Leave ordinance, this Act will generally provide employees who work at least 30 days per year in California with one hour of paid sick leave for every 30 hours worked. This will be a dramatic change for many employers who have not extended paid sick leave benefits to part time or temporary employees.
The accrual begins at hire or July 1, 2015, whichever is later. Employees become eligible to use their accrued sick hours after 90 days.
The sick time may be used:
- for diagnosis, care, or treatment of an existing health condition of, or preventive care for, an employee or an employee’s family member.
- in the event an employee who is a victim of domestic violence, sexual assault, or stalking needs time off to seek medical attention, to obtain services from a domestic violence program or psychological counseling, or to participate in safety planning and/or to obtain relief in court such as a restraining order or other injunctive relief, to help ensure the health, safety, or welfare of the victim or his or her child
“Family member” includes the employee’s children (biological, adopted, or foster child, stepchild, legal ward, or a child to whom the employee stands in loco parentis) regardless of age or dependency status; parents (biological, adoptive, or foster parents, stepparents, or legal guardians of an employee or the employee’s spouse or registered domestic partner, or a person who stood in loco parentis when the employee was a minor child); spouse; registered domestic partner; grandparents; grandchildren; and siblings.
Employees may request to use sick time orally or in writing. Employers may require employees use a minimum amount of paid sick leave per request but that minimum increment shall not be greater than 2 hours. Paid sick days will carry over from year to year but may be subject to a 48-hour or 6-day accrual cap. Employers may also limit an employee’s use of paid sick days to 24 hours or 3 days in each year of employment. Alternatively, employers may “front load” paid sick leave annually in at least the statutory amount (3 days or 24 hours) provided the other requirements of the law are satisfied.
As is currently the case, accumulated sick leave need not be paid out upon termination. However, employees who terminate and are rehired within one year will be entitled to have their former accrued balance restored and available for immediate use. Employers may also advance or “lend” paid sick days to an employee in advance of accrual at their discretion.
The Act permits employers to use their existing paid time off, vacation and sick leave policies in lieu of creating separate sick leave entitlements to comply with this law but they must offer at least the same amount of paid leave and allow it to be used for the same purposes and under the same conditions. In short, employers seeking to use existing policies will need to review them closely to confirm that they will comply with the Act.
Other noteworthy requirements of the Act include:
- Available paid sick leave balances must be reported on paystubs or in a separate writing provided on the designated pay date with the employee’s pay
- There will be a workplace poster issued by the Labor Commissioner prior to the effective date of the Act
- There will be an updated Labor Code 2810.5 wage notice that specifically references the paid sick leave entitlement
- The rate of pay for the leave is the employee’s hourly wage but it is a blended rate for those employees with multiple rates of pay (calculated by dividing the employee’s wages for the prior 90 days by the hours worked during that period); exempt employees’ pay rate for paid sick leave is based on a 40 hour workweek.
- There is no mandatory amount of notice employees must provide prior to using their leave but they should give “reasonable advance notice” when leave is foreseeable
- Employers may not require an employee to obtain coverage or a replacement for his/her absence prior to approving use of the sick leave
- Records demonstrating compliance with the Act (employees’ accrual and use of paid sick leave) must be retained for at least three years
Failure to comply with this law or an employer’s denial of the right to use accrued sick leave, adverse action resulting from use or attempted use of the sick leave and/or discrimination or retaliation related to use of sick leave or any policy/practice prohibited by the Act may result in employee complaints to the Labor Commissioner for penalties, fines, liquidated damages of up to $4,000, attorneys’ fees costs and interest. The Act also empowers the Labor Commissioner and/or Attorney General to take action, including filing a civil lawsuit in court, to enforce compliance with the Act which opens the door to additional Private Attorney General Act complaints seeking to pursue legal or equitable relief on a representative basis for all potentially aggrieved current and former employees including reinstatement, back pay, the payment of sick days unlawfully withheld, and reasonable attorney’s fees and costs as well as interest.
There are some narrow exclusions from the Act. The employees not covered by this law are:
- those who are covered by a collective bargaining agreement that “expressly provides for paid sick days or a paid leave or paid time off policy that permits the use of sick days for those employees, final and binding arbitration of disputes concerning the application of its paid sick days provisions, premium wage rates for all overtime hours worked, and regular hourly rate of pay of not less than 30 percent more than the state minimum wage rate.”
- those in the construction industry who are covered by a collective bargaining agreement that “expressly provides for the wages, hours of work, and working conditions of employees, premium wage rates for all overtime hours worked, and regular hourly pay of not less than 30 percent more than the state minimum wage rate, and the agreement either (A) was entered into before January 1, 2015, or (B) expressly waives the requirements of this article in clear and unambiguous terms.
- Certain in-home caregivers
- Flight deck or cabin crew employees of air carriers who are covered by the federal Railway Labor Act provided the employees are provided compensated time off at least equal to one hour of paid time off for every 30 hours worked.
One silver lining in the Act comes in the form of an affirmative defense to the imposition of penalties. The Act says that if an employer makes an “unintentional” and “isolated” payroll error or written notice error that is clerical or inadvertent, no penalty or liquidated damages shall be assessed. In addition, any factfinder reviewing that employer’s compliance with the Act may consider the employer’s adopted policies, procedures and practices compliant with the law as a relevant factor that may mitigate possible penalties as well.
Squire Patton Boggs will be monitoring this new law closely in the coming months and will alert you to the publication of the poster, updated wage notice and any further guidance from the Labor Commissioner as they are available. Please feel free to reach out to your SPB counsel should you like assistance with updating your policies before next summer.