California employees finally have paid sick leave

Understanding the myriad of new state and local regulations that impact Californians’ sick leave

2015 June

On September 10, 2014, Governor Jerry Brown signed the Healthy Workplaces, Healthy Families Act of 2014 (AB1522), requiring that employers, public or private and regardless of size, permit employees to accrue paid sick time at the rate of at least one hour for every 30 hours worked. In doing so, California became the second state in the nation, after Connecticut, to mandate employers provide their employees, including part-time and temporary workers, paid sick leave.

What this means is that many employees who could not afford to take any unpaid sick days can now have the ability to take paid sick leave rather than infect their customers and co-workers with viruses and other illnesses. It also means that these same workers will be able to take paid time off to care for a sick child. This may not seem like much, but this is a big step forward for the health and safety of employees across the state.

A study done in 2012 by the National Institute for Occupational Safety and Heath found that workers with access to paid sick leave were 28 percent less likely overall to suffer nonfatal occupational injuries than workers without access to paid sick leave. (American Journal of Public Health, September 2012, “Paid Sick Leave and Nonfatal Occupational Injuries.”)

There are some municipalities that have also instituted sick leave or that have already had paid sick leave in place. It is important to be familiar with these sick-leave regulations to be sure to protect all the rights of your client and/or potential clients.

California Healthy Workplaces; Healthy Families Act

Starting July 1, 2015, any individual employee is entitled to accrue sick leave if that individual works, in California, for at least 30 days within a year from the commencement of employment. This could mean that employees who live outside of California, but who travel into California and perform work for more than 30 days in a year, could be eligible for sick leave under the Act.

The Act makes a distinction between a cap on usage and accrual. It provides that an employer may cap an employee’s use of paid sick leave to 24 hours or three days in each year and it gives the employer the option of limiting employees’ total accrual of paid sick leave to 48 hours or six days, provided the employees’ rights to accrue and use paid sick leave are not “otherwise limited.” However, if the employer caps the use of sick leave at 24 hours per year, all other accrued, unused sick leave must carry over from year to year.

If an employer already has a paid sick-leave policy or paid time off policy, it is not required to do anything different, as long as the existing policy satisfies the Act’s accrual, carry over and use requirements or provides at least 24 hours or three days of paid sick leave each year.

The Act allows the sick leave to be used for a variety of reasons including the care, treatment of existing health conditions of, preventive care for the employee or the employee’s child, parent, spouse, registered domestic partner, grandparent, grandchild or sibling. The same group of “family members” covered by California Labor Code section 233. Sick time can also be used for employees who are the victims of domestic violence, sexual assault or stalking. New employees can start to use their accrued sick days on the 90th day of employment. To use the sick leave, employees must provide reasonable advance notice if the need to use paid sick leave is foreseeable. Otherwise, the employee must provide notice as soon as practicable.

Employers may set a reasonable minimum increment, not to exceed two hours, for the use of paid sick leave and must provide an employee with written notice, on the itemized wage statement or in a separate writing, of the amount of paid sick leave available.

Finally, employers must display a poster about the Act and a willful violation of the posting requirement will subject the employer to a civil penalty of not more than $100 for each offense.

There are some exceptions to the Act related to employees working under a valid collective bargaining agreement, employees in the construction industry, in-home supportive services and certain flight deck or cabin crew members.

The Act prohibits an employer from denying an employee the right to use accrued sick days, discharging, threatening to discharge, demoting, suspending, or otherwise discriminating against the employee for using or attempting to use accrued sick days or filing a complaint alleging a violation of the Act, cooperating in an investigation or prosecution of an alleged violation of the Act, or opposing a policy, practice or act prohibited by the Act. More importantly, the Act subjects an employer to a rebuttable presumption of unlawful retaliation if the employee was denied the right to use accrued sick days, discharged, threatened with discharge, demoted, suspended, or otherwise discriminated against within 30 days of the employee’s filing a complaint with the Labor Commission or alleging a violation or cooperating in an investigation or prosecution of an alleged violation of the Act, or opposing a policy, practice or act prohibited by the Act.

Violations of the act are enforced by the Labor Commissioner through complaints by the employee or civil action by the Labor Commissioner or the Attorney General.

Oakland’s Measure FF

A City of Oakland Ballot Measure FF, which went into effect on March 2, 2015, includes a new and more favorable paid sick leave policy for employees with businesses in Oakland.

As of March 2, 2015, Oakland-based employers must provide their employees with up to nine days (72 hours) of paid sick leave which may be accrued by eligible employees at the rate of one hour of paid leave for every 30 hours worked. Now one distinction, however, is that employers who normally employ fewer than 10 employees per week (including any employees working outside of Oakland) need only permit up to 40 hours of accrued paid sick leave. Unused paid sick leave similarly carries over from year to year, but is subject to the applicable accrual cap. Unused time does not need to be paid out at time of separation from employment.

Employees are eligible to accrue paid sick leave if they work at least two hours per week in the City of Oakland and are not exempt from state minimum wage requirements. Also, unlike the new State of California paid sick-leave law that goes into effect July 1, 2015, there is no basis under Measure FF to grant paid sick leave at the beginning of each calendar year. The Measure, however, provides that employers who already make available sufficient paid time off to their employees to meet the Measure’s requirements do not need to provide additional time off.

Accrual and eligibility for use of paid sick leave begins immediately on the March 2, 2015, effective date for existing employees. Employees hired after March 2 begin accruing paid sick leave upon hire, but they are not eligible to use any accrued time until they reach 90 days of employment.

Paid sick leave can be used not only for an employee’s own illness or medical diagnosis or treatment, but also to aid or care for the employee’s child, parent, legal guardian or ward, sibling, grandparent, grandchild, and spouse or registered domestic partner or other designated person who is ill, injured, or requires medical diagnosis or treatment. Under the Measure, the familial relationship extends not only to biological relationships, but also relationships resulting from adoption, step-relationships, and foster care relationships. “Child” includes a child of a domestic partner and a child of a person standing in loco parentis. 

The Oakland Measure mirrors the San Francisco Paid Sick Leave Ordinance in permitting a covered employee without a spouse or registered domestic partner to designate one person for whom the employee may use paid sick leave to provide aid or care. An employee must be permitted to make such a designation no later than the date on which the employee first accrues an hour of paid sick leave (i.e., the employee has worked 30 hours after paid sick leave begins to accrue). The employee has 10 work days in which to make the designation. Annually thereafter, an employee with no spouse or registered domestic partner must be provided a 10-day window to make a designation, including the opportunity to change any previous designation. 

An employer may require an employee to provide reasonable advance notice of the need to use paid sick leave. The Measure, however, does not define what constitutes “reasonable notice.” The Measure clearly provides that an employee cannot be required to find a replacement worker when taking paid sick leave. Finally, an employer may take only reasonable measures to verify or document that an employee’s use of paid sick leave is lawful, and may not require an employee to incur expenses in excess of five dollars to show his or her eligibility for such paid leave.

Every employer must give written notification of employees’ rights under the Measure to each current eligible employee and to each new employee at the time of hire. The written notice must be in all languages spoken by more than 10 percent of the eligible employees and must be posted prominently in areas of each work site where it can be seen by all employees. The Measure authorizes the City Administrator to prepare sample notices and an employer’s use of such notices will constitute compliance with the Measure’s requirements. 

Under the Measure, employers also must maintain for at least three years for each covered employee a record of his or her name, hours worked, pay rate, paid sick leave accrual and usage, and, if applicable, service charge collection and distribution. Employers must provide an employee with a copy of the records relating to the employee upon the employee’s reasonable request.

Measure FF authorizes aggrieved employees to seek damages and injunctive relief in court. A successful employee, but not a successful employer, is also entitled to recover reasonable attorneys’ fees and costs.

San Francisco regulations – the 56-hour rule

Beginning February 5, 2007, all employers must provide paid sick leave to each employee who performs work in San Francisco. [Chapter 12W of the San Francisco Administrative Code]. An employee is any person who performs work, including on a part-time or temporary basis. An employer is any person, as defined in Section 18 of the California Labor Code, who directly or indirectly employs or exercises control over the wages, hours, or working conditions of an employee.

For employees working for an employer on or before February 5, 2007, paid sick leave begins to accrue on that date. For employees hired by an employer after February 5, 2007, paid sick leave begins to accrue 90 calendar days after the employee’s first day of work. For every 30 hours worked, an employee accrues one hour of paid sick leave. Paid sick leave accrues only in hour-unit increments, not in fractions of an hour. For a non-exempt employee, overtime hours worked are counted toward the employee’s paid sick leave accrual. For an exempt employee, paid sick leave accrues based upon a 40-hour work week, unless there is evidence that the exempt employee’s regular work week is less than 40 hours.

The Sick Leave Ordinance covers all employees who are “employed within the geographic boundaries of the City by an employer.” This undefined provision caused a great deal of consternation among employers based outside San Francisco (in the Bay Area and across the country) whose employees occasionally perform work in San Francisco. The general rule is that “[e]mployees who perform work in San Francisco on an occasional basis are covered by the ordinance only if they perform 56 or more hours of work in San Francisco within a calendar year.” The 56-hour rule applies to employees who: work from their homes in San Francisco, who are present in San Francisco for the sole purpose of attending or presenting at a convention or conference, and who travel within and stop in San Francisco for work such as to make pickups or deliveries.

Therefore, the rule effectively requires employers outside San Francisco to track the “San Francisco hours worked” of their employees, unless the employer chooses to have paid sick leave accrue for its employees for all hours worked. If the employer distinguishes between San Francisco hours worked and non-San Francisco hours worked, the employer need not pay for sick leave taken, however, unless the employee meets or exceeds the 56-hour threshold for San Francisco hours worked.

For employees of employers for which fewer than 10 persons (including full-time, part-time, and temporary employees) work for compensation during a given week, there is a cap of 40 hours of accrued paid sick leave. For employees of other employers, there is a cap of 72 hours of accrued paid sick leave. OLSE will calculate business size for the current calendar year based upon the average number of persons who worked for compensation per week during the preceding calendar year. The business size of new employers for the current calendar year will be determined based upon “the average number of persons per week who worked for compensation for the first 90 days after its first employee(s) began work.” Use of the phrase “the current calendar year” indicates that determination of business size for the purpose of the Sick Leave Ordinance must occur annually. 

San Francisco, sick leave carries over

An employee’s accrued paid sick leave does not expire; it carries over from year to year.

For employees hired after February 5, 2007, who are separated from employment before completing the 90-day period, and are rehired by the same employer within one year of separation, “the prior period of employment counts towards the 90 calendar day eligibility period. The 90 calendar days do not have to be continuous or consecutive or completed within the same year.” Employees who were separated after becoming eligible for paid sick leave, and are rehired within one year of separation by the same employer, are not required to satisfy the 90-day eligibility period, but they are not entitled to reinstatement of their previously accrued paid sick leave hours.

If an employer has a paid leave policy, such as a paid time off policy, that makes available to employees an amount of paid leave that may be used for the same purposes as paid sick leave under the law and that is sufficient to meet the accrual requirements under the law, the employer is not required to provide additional paid sick leave.

All or any portion of the applicable requirements shall not apply to employees covered by a bona fide collective bargaining agreement to the extent that the law’s requirements are expressly waived in the collective bargaining agreement in clear and unambiguous terms.

An employee may use paid sick leave not only when he or she is ill, injured, or for the purpose of receiving medical care, treatment, or diagnosis, but also to aid or care for a family member or designated person (discussed below) when they are ill, injured, or receiving medical care, treatment, or diagnosis.

If an employee has no spouse or registered domestic partner, the employee may designate one person for whom the employee may use paid sick leave to provide aid or care. Employers must offer the opportunity to make a designation no later than 30 work hours after the date paid sick leave begins to accrue. The employee has 10 work days to make this designation. Thereafter, employers must offer the opportunity to make or change the designation on an annual basis, again with a window of 10 work days for the employee to make the designation.

Under the Sick Leave Ordinance, an employer may require employees to give “reasonable notification” of an absence from work for which paid sick leave is or will be used. The law does not define “reasonable notification.” The OLSE rule states that requiring advance notification of a pre-scheduled or foreseeable absence from work (such as a doctor’s appointment or ongoing injury or illness) for which paid sick leave will be used is “in principle reasonable and thus presumptively lawful.” The rule cautions, however, that advance notification may be unreasonable in a particular case “because the time required for the advance notification is excessive or the method required for providing advance notification is unnecessarily burdensome.”

As with the California regulations, employers must post a notice, in a location where employees can read it easily, informing employees of their rights.  OLSE provides this notice through the city’s annual business registration mailing. In fact, a downloadable version of the notice is also available on OLSE’s website.

Employers must retain records documenting hours worked by employees and paid sick leave taken by employees, for a period of four years, and shall allow OLSE access to such records.

Employees who assert their rights to receive paid sick leave are protected from retaliation.

Employees who are denied their rights under the law may file a complaint with OLSE.

So with all that said, it’s clear changes in sick-leave regulations have provided employees with additional benefits needed to care for themselves and their families, without losing income for exercising that need as the situation had been before these regulations took effect. But what one does need to remember is where you work. Does the city you work in provide for more paid sick-leave benefits than does the State? Does the employer know of the differences if they exist? Do you as an employer know what you are now required to do relative to providing your employees with paid sick leave? As an employer, you can work with your payroll company to implement these changes and have the calculations made and maintained by them so as to avoid any additional unnecessary work yourself. But whether you are employee or employer, read and know about your rights and obligations under these relatively new regulations.