New Sick Pay Laws Guarantee Paid Sick Leave for All Employees

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Recorder

By Lisa Lawson and Scott Lawson

April 2, 2015

In September, Gov. Jerry Brown signed into law groundbreaking legislation requiring employers of all sizes to provide each of their employees with a minimum of three paid sick days per year.

While the most onerous requirements of the law do not go into effect until July 1, some notice-related requirements are already active. Employers and their attorneys should promptly assess their sick pay policies to ensure compliance with the new law.

Employers and Employees Covered

The scope of the Healthy Workplaces, Healthy Families Act (HWHFA) is deep and far-reaching. It applies to in-state and out-of-state companies employing as few as one employee. Any employee who has worked in California for 30 days is entitled to the law’s benefits.

The HWHFA makes no distinction between part-time, temporary and full-time employees; all are entitled to its benefits. Employers whose sick pay policies exclude employees working less than a set number of hours per week should revise their policies. The law does prescribe three narrow categories of excluded employees: those whose employment is governed by certain collective bargaining agreements, providers of in-home supportive services and certain air-carrier employees.

Use of Paid Sick Days

The HWHFA provides employees with a great deal of latitude regarding use of accrued sick time. Employees may use paid sick time to tend to their own health issues or address the health issues of a “family member.” The new law defines a family member more broadly than other health-related employment statutes. Specifically, a family member includes a child, spouse, parent or domestic partner as well as grandparents, grandchildren or siblings.

If employees have accrued sick days and want to use them for a permitted purpose, their employer has very little say in limiting use. Although employers may require employees to give reasonable advance notice of any foreseeable need for sick days, if the need for sick days is not foreseeable, employees need only provide as much notice as is “practicable.” Employers cannot require that the request for paid sick leave be in writing, or request that employees find their own substitute.

Employers may not retaliate against employees for requesting or taking sick days, or for engaging in any other related activity protected by the statute. Indeed, the law imposes a rebuttable presumption of unlawful retaliation if an employer takes an adverse employment action against an employee within 30 days of the employee engaging in certain types of activities protected under the law.

However, employers can restrict the use of any paid sick days during the first 90 days of employment. In addition, although employees may determine how much paid sick leave to use for a permitted reason once sick pay is accrued, employers can require that employees use such sick leave in increments not less than two hours long.

Unlike many laws affecting health care-related leaves of absence in California, the HWHFA is silent about if an employer can request medical certification of the need for paid sick days. Employers whose sick pay policies require medical certification as a matter of course should assess whether those policies run afoul of the new law.

Accrual and Payout of Paid Sick Days

The new law requires employers to provide paid sick days to employees starting July 1 or, for employees hired after July 1, commencing on the first day of employment. One of the most complicated aspects of the new law relates to the accrual of paid sick days. Employers can comply with the accrual requirements in one of two ways: They may allow employees to accrue one hour of sick pay for every 30 hours of work performed, or they may provide 24 hours of paid sick days in a lump sum at the beginning of each year of employment—or alternatively, each calendar year or other 12-month period. Both methods have their pros and cons, and employers should consider which is most appropriate given current policies.

The lump sum method has an appealing simplicity. Every year, the employer must provide 24 hours of paid sick time—or three paid sick days—to employees. If employees do not use all of their paid sick days in a year, the unused sick days do not carry over to the next year. Employees then receive a new block of three paid sick days at the beginning of the next year, and those days must be available for immediate use. If an employer chooses the lump sum option, it must do so pursuant to a policy, so employers should document the policy in writing.

The alternative accrual method is the statutory default, and employers must comply with it if they do not have a compliant lump sum policy in place. Under the accrual method, all employees accrue one hour of sick pay for every 30 hours worked. Exempt employees are presumed to work 40 hours per week unless their normal schedule is otherwise. For nonexempt employees, both regular and overtime hours are counted in the accrual rate. Accrual of sick time begins upon hire. As a result, any existing policy providing that accrual of sick time does not begin until the conclusion of some probationary period will no longer be lawful.

Although an employee working 40 hours per week under the accrual method could conceivably accrue over 69 hours of paid sick time per year, the law allows employers to impose an accrual cap of 48 hours of sick pay, or six days, per year. In addition, employers may limit the employee’s use of paid sick days to 24 hours per year.

Impact on Part-Time or Alternative Workweek Employees

One question left unanswered by the legislation is exactly how much sick time employers must provide per year to employees who regularly work part-time hours or work more than eight hours per day. The statute says employees must be paid for “24 hours or three days” per year. However, for the four-hour-a-day worker, 24 hours is the equivalent of six days per year, not three. While the legislative guidance on this issue is thin at best, it seems logical to presume the Legislature intended for a worker to receive the equivalent of three days off work based on his or her own specific schedule. Hence, if a given employee works four-hour days, it would make sense that the employee would be entitled to 12 total hours of paid sick leave. Any other interpretation would render use of the phrase “or three days” superfluous throughout the act. Employers with part-time employees or employees who are regularly scheduled to work more than eight hours a day should consult counsel for definitive guidance on application of the law to those workers.

Relation to Municipal Paid Sick Leave Laws

While many of the requirements of the HWHFA are similar to those of the San Francisco Paid Sick Leave Law, the two laws are just different enough to be a challenge for employers with San Francisco-based employees. Oakland, too, will have its own sick leave law, effective March 2, and San Diego voters will determine in June of 2016 if that city will have its own law. Employers with employees in these cities must ensure they always provide whichever sick leave benefits are most favorable to employees.

Other Sick Leave and Paid time off Programs

Employers with existing sick pay or paid time off programs at least as generous as the benefits provided under the HWHFA need not provide additional sick days under the new law. Employers should, however, ensure their sick pay or paid time off programs allow employees to take paid time off for the same reasons as those provided by the new law, and ensure their existing accrual methods and use constraints are consistent with those required by the law.

Recordkeeping and Notices

The law mandates employers maintain records for at least three years documenting the number of hours employees work, and the number of sick days accrued and used by an employee. Employers must also provide employees with notice of their accrued sick pay total every pay period—either through the employee’s pay stub or in a separate writing. These recordkeeping and paystub requirements may pose challenges for employers with unlimited paid time off policies that do not track the use of time off for sick leave or vacation.

Although July 1 is the date by which employers must comply with the new sick-pay accrual and recordkeeping requirements, employers must make sure they distribute and post the required notices and posters about the law. The deadline for distribution of the posters and notices was Jan. 1.

Enforcement

There is no private right of action for any violation of the HWHFA, but the law authorizes the labor commissioner to impose significant fines and penalties for employers who violate it. In addition, the law allows for a civil action to be brought against an employer on behalf of the state for any violations committed, and expressly entitles the state to an award of attorneys fees in such actions. The labor commissioner also may seek remedies like reinstatement, back pay or payment of an administrative penalty.

Reprinted with permission from The Recorder, April 2, 2015

Read more: https://www.therecorder.com/id=1202722243450/New-Sick-Pay-Laws-Guarantee-Paid-Leave-for-All-Employees#ixzz3XPgcieRg