Pending California Legislation Will Require All Employers to Pay For Sick Leave

On June 25, 2014, the California Senate Judiciary Committee approved A.B. 1522.  A.B. 1522, also titled the Healthy Workplaces, Healthy Families Act of 2014, mandates that employees who work for more than 30 full-time days in a calendar year are entitled to accrue paid sick leave.  Under the proposed bill, all employers will have to credit one hour of paid sick leave for every 30 hours worked to qualifying employees, or one full workday for 18 weeks of full-time work.  New employees will only be able to use paid sick leave after their first 90 days of employment.  

 

Although, employers may cap how much sick leave employees can accrue under the new legislation, such a cap must be no lower than 24 hours, or three workdays.  The bill will also entitle employees to take time off for their own illness or to care for a family member.  Employers will have to record accrued paid sick leave on employees’ itemized wage statements, in addition to the existing nine items required under California Labor Code § 226.  Employers will also have to provide notice to its employees, via an additional mandatory workplace posting, of California workers’ right to paid sick leave.  

 

Importantly, the legislation differentiates between employees who are not "exempt" from overtime and those who are"exempt." Although an employer’s plan may be more generous, "non-exempt" employees must accrue a minimum amount of sick leave based directly on their number of hours worked (one hour for every 30 hours worked).  Exempt employees, who work greater than 40 hours per week, must accrue paid sick leave at the minimum standard for an employee who works 40 hours a week, and no more.  However, if the "exempt" employee ordinarily works 40 hours or fewer during a workweek, the employee will accrue paid sick leave for the hours worked as if he or she was "non-exempt."

 

Currently, California law does not require employers to provide employees with paid or unpaid sick leave.  However, the law imposes minimum requirements for employers who choose to have a sick leave policy.  For example, employers currently cannot cap sick leave accrual at less than the amount an employee would accrue in six months.  Like the proposed bill, current law also mandates that employees who accrue sick leave be permitted to use it for personal recovery as well as to care for immediate family members.

 

If A.B. 1522 passes into law, effective July 1, 2015, sick leave will no longer be optional and all California employers will be forced to provide employees paid sick leave.  Employers that already have a sick leave policy will likely have to review their existing policy to ensure that it complies with the new law’s minimum accrual and use requirements.  Employers that do not have a sick leave policy will have no alternative, but to implement one.  With respect to "exempt" employees, employers will have to consider "exempt" employee work patterns and practices to determine the impact on sick leave accrual.

 

The Division of Labor Standards Enforcement (the "DLSE") will be tasked with enforcing the new law.  As with many of California’s other wage-and-hour requirements, the DLSE will be able to assess penalties from an employer for failure to keep record of paid time off accrued by both "exempt" and "non-exempt" employees.  In addition to compliance, employers will have to exercise diligence in record keeping and policy enforcement so as to avoid liability from claims of unlawful discrimination for using accrued sick leave.  This may be difficult for some employers, especially in cases where employees adopt a use-it-or-lose-it mentality with respect to accrued sick leave.

 

As July 1, 2015, approaches, the text of A.B. 1522 or laws surrounding its enforcement may change.  Most notably, the bill is scheduled for hearing on August 4, 2014, before the Senate Committee on Appropriations to approve amendments made on June 15, 2014.  As the legislation develops, we will keep you updated.  Employers are encouraged to discuss the upcoming law with their labor and employment counsel.  

 

Fisher & Phillips is a preferred CIOMA partner.  

Any questions regarding the issues in this article can be directed to

Colin P. Calvert

Attorney at Law

ccalvert@laborlawyers.com | O: (949) 798-2160

2050 Main Street | Suite 1000 | Irvine, CA 92614Colin at Fisher & Phillips, LLP, (949) 851-2424.