California Passes Paid Sick Leave Law, Joining Nation-Wide Trend

What you need to know:

Effective July 1, 2015, California will require virtually all employers to grant at least three days of paid annual sick leave to California employees.  Employees may take the paid sick days to care for themselves or family members.  Notably, the law applies to employers of all sizes, and to California employees of companies based in other states. 

What you need to do:

Employers that do not currently grant paid sick time to their California employees should revise their policies accordingly and notify their employees of the new law.  Employers that already provide paid leave that may be used for sick days may not have to offer any additional paid time off, but will nonetheless have to comply with additional recordkeeping, notice and posting requirements.  Employers should consult with counsel before disciplining California (and other) employees for taking paid sick leave.  Finally, employers should ensure that their policies comply with paid sick leave laws in other states and cities in which they operate, such as Connecticut, San Francisco and New York City.

On August 30, 2014, California Governor Edmund Brown signed into law the Healthy Workplaces, Healthy Families Act of 2014.  The new law requires employers to grant three days, or 24 hours, of paid sick leave to virtually all California employees, beginning on July 1, 2015. 

The law applies to virtually all employers, regardless of size, and covers California employees of companies that have headquarters or offices in other states.  It also covers employees who work in California for 30 or more days in a year, as well as part-time and temporary employees.  The law exempts narrow categories of workers, including those covered by collective bargaining agreements and those who provide in-home supportive services. 

Covered employees are entitled to take paid sick leave to address their own health condition or that of a family member.  The definition of “family member” is broad, and includes grandparents, grandchildren and siblings, in addition to spouses, registered domestic partners and children.  Sick leave may also be taken to care for the adoptive parent, foster parent, stepparent or legal guardian of an employee or of the employee’s spouse or domestic partner.  Employees are also eligible to take paid sick leave if they are a victim of domestic assault, sexual violence or stalking.

Employers that already provide paid time off that may be used for sick days (such as vacation or personal time) need not provide additional specific sick time under the new law, although the requirements of their existing paid leave policy must otherwise meet the requirements of the new sick leave law.  Such employers will likely need to make adjustments to their existing policies, such as tracking sick time specifically and providing employees with written notice setting forth the amount of paid sick leave available on either the employee’s itemized wage statement or a separate writing provided contemporaneously with the employee’s paychecks.  Such employers must also comply with posting and record-keeping requirements.

Under the new law, employees accrue paid sick time at a rate of at least one hour for every 30 hours worked, beginning on their first day of employment, and are entitled to begin to use the paid sick leave on the 90^th day of their employment.  Accrued time may be taken in partial-day increments.  Employees must be permitted to carry over accrued but unused sick time from year to year, although accrual can be capped at 48 hours.  Employers can also prohibit employees from using more than 24 hours of sick time per year, even if they have accrued more time.  Accrued paid sick time need not be paid out upon termination of employment, although it must be restored to the employee if he or she is re-hired within twelve months.

California is the second state (after Connecticut) to pass a paid sick leave law, and these laws appear to be on the rise.  Several municipalities have also mandated paid sick leave, including New York City, San Francisco, San Diego, Seattle, Jersey City and Newark, New Jersey and Eugene, Oregon.  In Massachusetts, paid sick leave is a statewide ballot measure in the November 2014 election.  Therefore, even employers with few or no employees in California are advised to stay tuned on this issue, and to consult with counsel to ensure compliance with all paid sick laws that may apply to their employees.