The Division of Labor Standards Enforcements (DLSE) issued new FAQs and an opinion letter that clarified confusions about the July 2015 California Paid Sick Leave Amendments. The updated FAQs and August 7, 2015 opinion letter provide guidance and incorporate more detailed information about how the new amendments will affect employers. Here are the main things to note:
Eligibility Requirement: employees are eligible to begin accruing paid sick leave as of their first day of employment but may not use accrued paid sick leave until the employee has finished 90 days of employment. However, the new amendments clarifies that in order to qualify for paid sick leave the employee must also work for the same employer in California for at least 30 calendar days.
Exempt Employees: the original law recognized certain individuals who were exempt from the paid sick leave law. This included: 1) providers of publicly-funded In-Home Supportive Services, 2) employees covered by collective bargaining agreements with specified provisions, and 3) individuals employed by an air carrier as a flight deck or cabin crew member, if they receive compensated time off at least equivalent to the requirements of the new law. The updated FAQs recognize a new class of individuals who are exempt from the law: retired annuitants employed by the government.
Accrual Policy: under the paid sick leave law, employers can limit the use of paid sick pay to 24 hours or three days. The DLSE has clarified that the law is to be liberally construed to be most favorable toward the employee, so it is whichever number is greater for the employee. For example: if an employee normally works a 10-hour shift and has accrued 30 hours of sick pay, the employee is enabled to use all 30 hours and not be constrained to the 24 hour use limit.
The amendments also enable employers to stray away from the original accrual method (one hour paid sick time for every 30 hours worked) if the employees accrue at least 24 hours of paid sick time by the 120th calendar day of employment for the same employer.
No Accrual/Up Front Policy: under a no accrual/up-front policy, the employer must front load the full amount of paid sick leave at the beginning of each calendar year, each year of employment, or any other 12-month period. The full amount of paid sick leave is 24 hours or three days, whichever is more for the employee based on the regular hours worked by the employee.
Unused Hours and Seasonal/Returning Employees: an employee’s accrued and unused sick hours must be restored if that employee returns to the same employer within 12 months of leaving. However, if the employer chooses to cash out the employee’s accrued paid sick leave at the end of the employee’s term, the employer does not have to restore those hours upon the employee’s rehire and the employee will start accruing from zero.
Grandfathered Policies: the new amendments state that some policies may be “grandfathered” in (meaning that the policy existed before the amendments passed on January 1, 2015) if:
- The accrual policy provides no less than one day or eight hours of accrued paid sick leave within three months of employment per year, and
- The employee was entitled to earn at least three days or 24 hours of paid sick leave within nine months of employment.
However, if an employer modifies a grandfathered policy, they nullify the grandfathered qualification exception and must comply with the new sick leave law requirements.
Unlimited Paid Sick Leave: employers with unlimited paid sick leave policies should indicate this by writing “unlimited” on the employee’s pay stubs or on separate written documents.
Next Steps for Employers
In addition to these clarifications, employers must ensure that they have already taken steps to comply with the paid sick leave requirements, which primarily went into effect on July 1, 2015. Specifically, employers must:
- Have a written paid sick leave policy.
- Provide employees with state-mandated individualized notifications.
- Comply with tracking and recordkeeping requirements of the accrual and use of an employee’s paid sick leave.
- Display a state-mandated poster in a conspicuous place at the workplace. Employers may obtain a copy of the poster on the Labor Commissioner’s website.
If you have any questions about your obligations or compliance as an employer, please contact us at firstname.lastname@example.org or reach out to your Mitzel Group, LLP attorney directly.