State Mandated Paid Sick Leave (AB 1522) Effective July 1, 2015

Touted as the “Healthy Workplaces, Healthy Families Act of 2014,” the State of California has mandated paid sick leave starting July 1, 2015. By law, an eligible employee accrues paid sick leave rights at the rate of one hour for every 30 hours worked. Not all employees are eligible for this benefit. For example, this law carved out exemptions for employees covered by certain collective bargaining agreements, and those who provide MediCal in-home supportive services.

By our calculation, if an employee works 40 hours per week, then he or she can accrue 69.3 hours of paid sick time off per year. But the law also states that an employer is not obligated to allow an employee to accrue more than 48 hours, or six days, of paid sick leave, provided the employee’s rights are not otherwise limited. In addition, an employer may limit an employee’s use of paid sick days to 24 hours in each year of employment.

An exempt employee is deemed to work a 40-hour schedule, unless his/her schedule is less than 40 hours per week. The law does not differentiate between overtime and regular hours for non-exempt employees. Conceivably, workers earn paid sick time on all hours worked, creating an extra administrative task in tracking accrual of paid sick time benefits.

If utilizing the accrual method, rather than front-loading PSL, unused sick leave carries over to the following year of employment. If the employment relationship is severed, but the employee is rehired within one year of the date of separation, the employee is entitled to use any accrued but unused sick days upon rehire.

Employers will be required to display a new poster detailing information about paid sick leave. Moreover, the ‘Notice to Employees’ has been amended to include a notice regarding paid sick leave rights.

Records regarding sick leave accrued and used must be kept for three years. And if paid sick leave days were unlawfully withheld, the employer is penalized at least $250 with an administrative penalty not to exceed $4,000. Liquidated damages can also be imposed against an employer who withholds paid sick leave benefits.

This new law requires employers to make significant changes to their sick leave policies. For those clients who use Sierra HR Partners or FLC for their handbooks, we provide the information necessary to make the required changes during our “Year in Review” held in December. We will also provide a model sick leave policy.