Back in September of 2014, bill AB1522, known as the Healthy Workplaces, Healthy Families Act of 2014, was signed into law. Also known informally as the California Paid Sick Leave Law, it promised to have a profound impact on both employees and employers.
On January 1, 2015, the qualifying periods that determine which employees are eligible for paid sick leave and the employee notice required by Labor Code 2810.5 became effective, and the actual entitlement began on July 1, 2015.
California Paid Sick Leave Costs Employers
The law is extensive and far-reaching. The California Department of Industrial Relations has an entire webpage dedicated to the law, its impact, and employer resources, including a 45-minute webinar and an educational slide presentation that is 23 pages long!
The Act applies to all private and public employers regardless of size and, unlike the exclusions of other labor laws, small employers are not exempt.
What does the California Sick Leave Law mean for employers?
Unfortunately, since the passing of the legislation there has been quite a bit of erroneous and even misleading information shared regarding the law. A prime example of this misleading information is the statement that an employer only has to provide up to three days of sick leave per employee per year.
In fact, the bill clearly states that an employee will accrue paid sick leave at a rate of one hour for every 30 hours worked. For a full-time employee that is just over eight working days per year. An employer may limit the use of accrued sick leave to just three days per incident, but they must specify this policy in writing and properly notify their employees.
An additional requirement placed on employers is at the time of hire an employer needs to give each employee a notice that specifies what the company’s sick leave policy is. In addition, they must provide a payday notice that sets forth the accrued and used paid sick leave for each employee and post the required notice in the workplace to ensure that employees are aware that they are entitled to paid sick leave.
A failure to comply with these requirements can mean they could face Labor Commission Enforcement that can then award employees back pay, damages and penalties up to $4,000.
Unsurprisingly, the bill specifies an employer cannot discriminate or retaliate against an employee who seeks to utilize their paid sick leave. The general intent of the law is to benefit employees in California, some 6.5 million of whom had no sick time available to them prior July 1st, 2015. However, the overall tone and language of the legislation is somewhat punitive and antagonistic towards employers.
Who is covered by the California Sick Leave Law?
Another misconception involves which employees are actually covered by the law. While it covers all employees including part-time, seasonal, per diem, and salaried, there are a few exceptions. Some types of employees are not covered under the Act and are limited to the following four groups
- Employees covered by a union contract that specifically provides for paid sick leave, has binding arbitration, and meets other specified requirement
- Construction employees covered by a valid union contract
- State providers of in-home supportive services under certain sections of the Welfare and Institutions Code
- Certain air carrier employees
The fact is that many employers in California already have made it a point to provide generous and progressive sick leave and paid time off policies. The new law supersedes these policies and, in fact, stipulates that even in those instances where existing policies may offer similar or better paid time off benefits there are still requirements for the employer.
For example, if you already provide paid time off which can be used for vacation or illness you will not have to provide additional sick leave as long as your provide at least 24 hours per year of paid leave that can be used for health care and meets other requirements in the law.
If your company offers unlimited time you may or may not track how much time employees take off or for what reason. However, the new law requires that employers separately track sick leave accrual and use anyway.
Stay Informed, Stay Compliant
An updated and streamlined sick leave strategy will help your organization meet its obligations, while providing accuracy and timeliness. So take time to understand the law, automate sick leave tracking and calculations, and prioritize accurate record keeping. In this way, you will make compliance a sure thing.
Another key step in maintaining HR compliance and increasing your company's cost-effectiveness is to consider outsourcing. A professional agency such a Accuchex can provide much-needed help with Human Resources needs and questions. Accuchex is a full spectrum Payroll Management Services provider offering expertise in Time Management, Insurance and Retirement issues, as well.
If you are looking for reliable resource for your HR issues, we can help. And you can get your Free Download: Payroll Outsourcing Guide to help you make an informed decision, or call Accuchex Payroll Management Services at 877-422-2824.