Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
On July 13, 2015, California’s AB 304 was approved 39-0 by the State Senate and signed by Governor Brown.
The changes took effect immediately.
The wave of new sick leave legislation continues across the country. At the same time, state and local governments continue to refine existing laws to address new laws passed, as well as the complexities that surround providing for and administering paid sick leave benefits.
California Amendments of Paid Sick Leave Law Pending
After much discussion and more than half a dozen versions, the California Assembly voted 67-0 on June 22, 2015 to amend California's paid sick leave law (PSL), the Healthy Workers, Healthy Families Act of 2014.1 In order to change the PSL law, the amendments must also pass through the Senate on a two-thirds vote and be signed by Governor Jerry Brown. The bill is considered an urgency measure. If it passes through the Senate and up to the Governor, these amendments would become effective immediately upon the Governor’s approval. The urgency was based the Legislature's desire to tweak and clarify some provisions of the current PSL law, much of which takes effect on July 1, 2015.
The present pending amendments change some critical issues and clarify other areas of concern for California employers, including clarifying that an employer may use any one of three methods to calculate the rate of pay for sick time. The amendments:
- Clarify that an employee must work for the same employer for 30 or more days within a year of the commencement of employment to be eligible to use sick leave time.
- Allow for alternative accrual methods for all leave banks. Employers may still provide paid sick time using accrual based on hours worked (1 hour for every 30 hours worked) or frontloading of 24 hours or 3 days, whichever is greater, at the start of the year measurement period. Other accrual methods, however, such as providing a set amount per pay period or per quarter, will now comply with the statute provided that the employee accrues leave on a regular basis, and no less than 24 hours of paid sick time by the 120th calendar day of the year. See Labor Code section 246(b)(3). It is still the case that an employer can only avoid carryover if the full 24 hours or 3 days of leave are frontloaded at the beginning of the designated year.
- Grandfather leave banks existing as of January 1, 2015. Leave policies in place as of January 1, 2015 that provide for accrual: (a) on a regular basis; and (b) of no less than one day or eight hours of accrued leave within three months of employment of each year, and under which the employee was eligible to earn at least three days or 24 hours of sick leave or paid time off within nine months of employment, will comply with the amended law. However, if an employer modifies the accrual method used in the policy it had in place prior to January 1, 2015, the employer must satisfy the alternative accrual methods described above. This change does not prohibit the employer from increasing the accrual amount or rate for a class of employees covered by this subdivision. This is a late, but important, development for employers and they should consider whether revisions to existing leave banks (if not already implemented) must be made.
- Allow employers with unlimited or undefined leave banks to indicate “unlimited” on the employee’s itemized wage statement. Prior to implementing such an “unlimited” bank, employers should carefully consider whether the use of such a leave bank is the right decision for their business and whether an “unlimited” notation on wage statements accurately reflects their policy.
- Allow employers to calculate the rate of pay for employees using any of the following methods:
(1) Paid sick time for nonexempt employees shall be calculated in same manner as 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.
(2) Paid sick time for nonexempt employees shall be calculated by dividing 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.
(3) Paid sick time for exempt employees shall be calculated in the same manner as the employer calculates wages for other forms of paid leave time.
- Clarify that employers are not required to reinstate accrued paid time to an employee if that paid time was paid out at separation of employment.
- Clarify that employers have no obligation to inquire or record the purposes for which an employee uses sick leave or paid time off.
- Clarify that an employer may choose the year to be used (employment, calendar, or 12-month period), except that the 30-day requirement uses a 12-month rolling backwards year.
- Exclude retired annuitant of a public entity from the definition of employee.
- For employers in the broadcasting and motion picture industries, delay the requirement to provide notice of the amount of paid sick time available each time wages are paid until January 21, 2016. For all other employers, this obligation begins on July 1, 2015.
Employers should review their existing and proposed policies to determine the best compliance options given the potential new options available.
Emeryville, California Paid Sick Leave Ordinance Set to Take Effect July 1, 2015
On June 2, 2015, Emeryville, California passed its own paid sick leave ordinance, slated to take effect on July 1, 2015. The Emeryville ordinance attempts to apply portions of the original paid sick leave law passed in California, the Healthy Workers, Healthy Families Act of 2014.
At first glance, this ordinance may seem to be just another “run-of-the-mill” sick leave law. However, the ordinance includes many nuances, including allowing an employee to take time off from work to aid or care for the guide dog, signal dog, or service dog of the employee, employee’s family member, or other designated person. In addition, because of the pending amendments to California’s PSL law, it is unclear whether Emeryville will modify its ordinance and which provisions of the California PSL law will be incorporated into the Emeryville ordinance. As a result, it is recommended that employers with employees performing work in Emeryville seek assistance from qualified employment counsel to understand and address the ordinance’s complexities.
Eugene, Oregon Paid Sick Time Act Will be Repealed
On June 23, 2015, Oregon’s governor signed into law a state-wide paid sick leave act. This state-wide law preempts Eugene’s Paid Sick Time Act. In anticipation of the Governor’s signature on this state-wide law, the Eugene City Council voted on June 17, 2015 to:
- Move the implementation date of the Eugene Sick Leave Ordinance from July 1, 2015 to January 1, 2016, effective immediately; and
- Automatically repeal the ordinance on January 1, 2016, should the pending state-wide sick leave legislation be signed into law (and not referred to voters).
Given this action, employers do not need to change their policies in Eugene for a July 1, 2015 start date. However, employers should now turn their attention to the state-wide paid sick leave law, which will be effective January 1, 2016.2
Reminder: Bloomfield, New Jersey Set to Take Effect June 30
Finally, employers with employees working in Bloomfield, New Jersey are obligated to comply with Bloomfield’s Paid Sick Leave law beginning on June 30, 2015.
1 See Michelle Barrett Falconer and Pam Salgado, An Update on the Epidemic: California’s Statewide Paid Sick Leave Law, Littler Insight (Jan. 12, 2015).
2 See Doug Parker and Don Stait, Oregon Becomes Fourth State to Pass Paid Sick Leave Law, Littler ASAP (June 15, 2015).