Paid sick leave: The latest compliance requirement for California employers

Published on Fri, 06/26/2015 - 00:22

The Affordable Care Act has kept employers on their toes in recent years as they adjust to a host of new regulations and compliance requirements. And, if you run a business in California, you have one more law to contend with beginning this summer.

Under the Healthy Workplaces, Healthy Families Act of 2014, employers in California will be required to provide paid sick leave to their employees beginning July 1, 2015. Any employee who works in California for 30 or more days within a year from the beginning of his or her employment is entitled to paid sick leave. Employees – including part-time and temporary employees – will earn at least one hour of paid leave for every 30 hours worked. The paid leave begins accruing on the first day of employment or July 1, 2015, whichever comes later.

Are you prepared?

This is a complex and far-reaching law that will affect most California employers, so you need to make sure you’re ready. Here are some of the Act’s highlights provided in part by the NAIC:

  • Employers can provide accrued paid sick leave at a rate of at least one hour of paid time off for every 30 hours worked (accrual method), or provide a lump sum of 24 paid hours (three regular work days) at the beginning of each year (lump sum method). Under the accrual method, the total amount of accrued paid sick leave may be capped at 48 hours (six work days). Under the lump sum method, any remaining balance of paid sick leave can’t be carried over from year to year, as the employee will receive three days of sick leave at the beginning of each year.
  • There are some exceptions to the law, such as employees who work under certain collective bargaining agreements, provide in-home support services under the Welfare and Institutions Code, or work in air travel.
  • Employers can limit the use of paid sick leave to 24 hours (three regular work days) per year, if the notice of the limit is provided in advance to employees.
  • Employees can’t be required to find a replacement for their shift when they use the paid sick leave, have a medical certification to validate the necessity of sick leave usage, or be disciplined or retaliated against for using paid sick leave.
  • Employees must be allowed to use their accrued paid sick days beginning on the 90th day of employment. (Employers can impose an 89-day waiting period.)
  • Upon termination from employment for any reason, an employer is not required to pay employees for accrued, but unused, paid sick days unless the employee separates from employment and is then rehired within one year. In that case, the employee’s previously accrued and unused paid sick days must be reinstated and the employee must begin accruing additional paid sick days upon rehire.

What about nonprofits?

If you run a nonprofit and offer paid time off to your employees, your policies still have to meet the requirements of the new law regarding accrual, carry-over, and use.

What if you already have a sick-leave policy?

If you already have a sick-leave policy in place, you may or may not be required changes to existing policies because the Act says it only sets minimum standards and does not limit employers from offering equivalent or more generous policies. Thus, an employer is not required to provide additional paid sick days if it already has a paid leave policy or paid time off policy that meets or exceeds the Act’s requirements. 

What do employers need to do to comply?

Here are some of the steps you’ll need to take:

  • Display a poster on paid sick leave where employees can easily read it.
  • Provide written notice to employees of their paid sick leave rights at the time of hire.
  • Allow eligible employees to use accrued paid sick leave upon reasonable request.
  • Show how many days of sick leave an employee has available on a pay stub or document issued the same day as a paycheck.
  • Keep records showing how many hours have been earned and used for three years.

For more details about the new law, see the Frequently Asked Questions provided by the State of California Department of Industrial Relations.

When you need a trusted expert in your corner to help you stay compliant and protect your business, contact Heffernan Insurance Brokers’ Benefit Advisory Services