On 7/13/15, Governor Jerry Brown signed AB 304, which amended several vague areas of the current California Healthy Workplaces, Healthy Families Act. Below is a summary of the significant amendments:
Unlimited Paid Sick Leave or PTO Policies
Employers with unlimited paid sick leave or PTO policies may now satisfy the notice requirements by stating “unlimited” on employees’ itemized wage statement or in a separate statement provided on the same date as the payment of wages.
Pre 1/1/2015 Policies
If an employer had a paid sick leave or PTO policy in effect as of 1/1/2015 that allowed employees to accrue at least eight hours of paid sick leave or PTO within three months of employment each calendar year, and allowed employees to earn at least 24 hours of paid sick leave or PTO within nine months of employment, then the employer does not need to offer additional paid sick leave.
Alternative Accrual Method
Whereas the original law required paid sick leave to accrue at a rate of one hour for every 30 hours worked, under AB 304, employers may use any accrual method provided that paid sick leave me accrues on a regular basis and employees will have 24 hours of accrued paid sick leave by the 120th calendar day of employment each calendar year.
Paid Sick Leave Calculation for Commissioned and Piece Rate Employees
Employers have two options for calculating paid sick leave for non-exempt employees who have variable wage rates (e.g., commission or piece-rate):
- Calculate the regular rate of pay for the workweek in which the employee uses paid sick time, whether or not the employee actually works overtime in that workweek; or
- Divide the employee’s 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.
Reinstatement of Prior Accrued Sick Leave
Per AB 304, if paid sick leave was paid out upon an employee’s separation from the company, then the employer is not required to reinstate accrued paid sick leave if the employee is rehired within one year of the separation date.
The original law required employers to keep records of paid sick leave usage for three years, but did not state whether that included documents such as doctor’s notes. AB 304 clarifies that employers are not required to inquire into or record the purpose for which an employee uses paid sick leave.
Employers are encouraged review their current paid sick leave policies in light of these new amendments.
What is the Paid Sick Leave Law? In September 2014, California passed a law called the Healthy Workplaces, Health Families Act, also known as the Paid Sick Leave Law, that requires California employer’s to provide employees with 1 hour of sick leave for every 30 hours worked.
When does the law go into effect? July 1, 2015
What do I need to do now? Review existing corporate sick leave policies to ensure they comply with California requirements.
As you may know, on 9/10/2014, California passed the Healthy Workplaces, Healthy Families Act of 2014 (the “Act”), also known as California’s Paid Sick Leave law. Under the Act, California employers will be required to provide employees who have worked in California for 30 or more days, with at least one (1) hour of paid sick leave for every 30 hours worked.
Any employee who works over 30 days in California within a year from the commencement of their employment are covered by the new law, which includes, but are not limited to:
- Part-time employees
- Full-time employees
- Exempt/non-exempt employees
- Temporary employees
Please note that there are limited exceptions to the rules that should be closely reviewed. For further detailed information, please visit the State of California’s Department of Industrial Relations Paid Sick Leave webpage. Your Sequoia Client Service Manager can also provide more information through our partnership with ThinkHR, including details on leave accrual, use of leave, notice, recordkeeping, and posting requirements.
In addition to a close review of the Act in order to ensure an understanding of its requirements, employers should review and update existing paid leave policies to be sure they are in compliance, and plan for the written notice, posting, and recordkeeping obligations.
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