"This & That" Tuesday: Paid Sick Leave (Special Edition)

July 21, 2015

 

Here is the latest issue of “This & That” Tuesday. I hope you find it to be informative and useful.

 

Announcements

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July 22 2015

Industry Manufacturers Council

HR4U 101 Full-day Workshop

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September 15, 2015

Irwindale Chamber of Commerce

Hiring Talent for Consistent Performance

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Mandatory Paid Sick Leave in California: New Amendments

Effective July 13, 2015 (abbreviated)

By: CalChamber Employment Law Counsel

 

How Much Paid Sick Leave Will Employees Get?

The answer to this question will depend on which approach the employer chooses.

• Statutory Accrual Method: Under the accrual method, an eligible employee earns one hour of sick pay for every 30 hours worked beginning either July 1, 2015, or, if hired after July 1, on the employee’s first day of work. Both regular and overtime hours are counted toward the accrual rate of one hour for every 30 hours worked.
• New: Optional Accrual Method that Provides No Less than 24 Hours by the 120th Day: An employer does not have to follow the statutory accrual method of one hour per every 30 hours worked provided that the accrual is on a regular basis so that an employee has no less than three days or 24 hours of accrued sick leave or paid time off (PTO) by the 120th calendar day of employment or each calendar year or in each 12-month period. The employer can determine the accrual method so long as it meets the above requirements.
• New: Alternative Accrual for New Hires: A third option is available under the statute. The Labor Code states that “an employer may satisfy the accrual requirements … by providing not less than 24 hours or three days of paid sick leave that is available to the employee to use by the completion of his or her 120th calendar day of employment.” This option applies only to paid sick leave; not to PTO.
• New: A Pre-Existing Employer Policy (Policy in Effect Prior to January 1, 2015): If your organization already had a paid sick leave or paid time off policy in place prior to January 1, 2015, you have the flexibility to use your existing accrual method and not provide an additional three days/24 hours of paid sick leave or PTO as long as your pre-existing policy accrues on a regular basis and meets both of the following requirements:
  • Employees have no less than one day or eight hours of accrued sick leave or paid time off within three months of employment, each calendar year, or each 12-month period; and
  • Employees were eligible to earn at least three days or 24 hours of sick leave or paid time off within nine months of employment.
• Lump-Sum Method: An employer can avoid the administrative and other burdens of having to calculate the accrual and the carryover amounts by using a “lump-sum” method. Here, the full amount of leave (24 hours or three days) is provided to the employee at the beginning of each year of employment, calendar year or 12-month period. In this “lump-sum” situation, an employee won’t be able to carry over unused sick days but will get three new sick days at the beginning of the following year. An employer will need to make sure that any lump-sum policy allows employees to use the leave for all the same purposes and conditions specified under the Act.

 

How Do I Pay The Employee For The Sick Day?

Paid sick leave must be paid no later than the payday for the next regular payroll period after the sick leave was taken.

• New: Employers can use any one of the following three methods to calculate how to pay employees who take paid sick time:
  • Calculate paid sick time for nonexempt employees in the same manner as the “regular rate of pay” for the workweek in which the employee uses paid sick time, regardless of whether the employee actually works overtime in that workweek.
  • Calculate paid sick time for nonexempt employees by “dividing the employees total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment.”
  • Calculate paid sick time for exempt employees in the same manner as wages are calculated for other forms of paid leave time.

 

What Happens When An Employee Leaves?

• Employees who leave employment are not entitled to a payout on any accrued but unused paid sick leave:
  • However, if you combine the sick leave and vacation into a PTO policy, you will have to follow the rules relating to vacation and PTO, including paying out accrued but unused PTO upon termination.
  • Remember, accrued PTO and vacation is treated like wages in California.
• Previously accrued and unused paid sick days must be reinstated if an employee leaves employment and then is rehired within one year.
• The rehired employee must be allowed to use those previously accrued sick days and begin accruing additional paid sick days from the date of rehire.
• New: An employer is not required to reinstate accrued paid time off to an employee who was paid out at the time of termination, resignation or separation of employment.

 

What Are The Documentation/Notice Requirements?

The Act contains several notice, posting and recordkeeping requirements:

• Pay-Stub Notice: An employer must provide an employee with a written notice setting forth the amount of paid sick leave available to the employee each pay period. An employer can either provide this notice to the employee on the already required itemized wage statement or in a separate written document provided to the employee with the payment of wages.
  • New: If an employer provides unlimited paid sick leave or unlimited paid time off to an employee, the employer may satisfy this section by indicating on the notice or the employee’s itemized wage statement “unlimited.”
  • New: In addition, these provisions have a delayed implementation — until January 21, 2016 — for employers covered by Wage Orders 11 or 12 (broadcasting and motion picture).
• Wage Theft Notice: The Wage and Employment Notice (Labor Code section 2810.5), which employers have been required to provide to nonexempt employees since 2012, has been updated by the Labor Commissioner to contain information about an employee’s right to accrue and use paid sick leave and about employee protections under the Act. The updated Wage Theft Notice is available on the Labor Commissioner’s website
• Poster: There is a required poster advising employees of their sick leave rights. The Labor Commissioner has released the poster, and it’s available on the Labor Commissioner’s website
• Recordkeeping Requirements: Employers will need to keep records for at least three years that document the number of hours that each employee worked and paid sick days accrued and used by each employee.
  • New: However, an employer is not obligated to inquire into or record the purposes for which an employee uses paid leave or paid time off.