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California’s Paid Sick Leave Law – A New Headache for California Employers

7/22/15

By: Kacie L. Manisco

California’s newly enacted Healthy Workplaces, Healthy Families Act of 2014 (HWHFA) can be added to the lengthy list of laws creating major headaches for California employers. The statute, which requires virtually all California employers to provide employees with paid sick time off to care for themselves or their family members, imposes onerous, often unclear, obligations on California employers.

Accrual and Use

The HWHFA, which took effect on July 1, 2015, enables employees to accrue at least one hour of paid sick time for every 30 hours worked, which totals a little more than eight days per year. Employers, however, can cap accrual at six days or 48 hours and limit the use of paid sick leave to 24 hours or three days in one year. An unofficial interpretation from the Labor Commissioner’s office is to provide covered sick leave at the more generous measure of 24 hours or three days, which means an employee who works 16 hour shifts would actually be able to use up to 48 hours (three days) of paid sick leave. Similarly, an employee who works 16-hour shifts would be capped at 96 hours (6 days) of paid sick leave. This becomes complex for employees with fluctuating hours and shift lengths, as employers either need to implement a different cap for each individual employee taking into consideration the particular employee’s longest shift, or provide one generous cap for all employees.  Fortunately, employers also have the option of disregarding the accrual method and instead frontloading each employee with three days or 24 hours of paid sick leave at the beginning of each 12-month period. Of course, that 12-month period started July 1, 2015 and, practically speaking, most employers would prefer to fill the sick leave bank at the beginning of each calendar year. Accordingly, many of our clients have opted to place three days or 24 hours of paid sick time into the employee’s leave bank on January 1, 2016, and every January 1^st thereafter. Employees will not be able to carry over the unused sick days provided to them on July 1, 2015; rather, each employee will get three new sick days. Needless to say, this is more generous than what the law requires if an employee uses any paid sick time off between now and the beginning of the year, but employers are electing this method due to its administrative ease.

Record-Keeping and Notice Requirements

The statute additionally requires the employer show the amount of sick leave an employee has “available” on their pay stub or a document issued the same day as their paycheck. Although not clear in the text of the HWHFA, “available” means sick time the employee has to use, not sick time the employee has accrued.  Employers must also display a poster notifying employees of the sick leave law in a conspicuous location at the work place, and provide all new employees with an individualized Notice to Employee that includes paid sick leave information. The notice can be found here. It is also available in Spanish.

Interaction with Existing Personnel Policies

In addition to creating a sick leave policy that complies with all the nuances of the HWHFA, employers should carefully consider the statute’s interaction with existing personnel policies. For example, the HWHFA prohibits an employer from disciplining an employee for using sick days accrued under the statute. Accordingly, if an employer has disciplinary procedures in place in the event of an unexcused absence, an employee who invokes their accrued sick time for protected reasons will be shielded from adverse action. Likewise, attendance policies requiring employees to give a certain amount of advanced notice in the event of an absence will need to be revised, as the HWHFA limits employers to requiring only “reasonable advance notification” of an employee’s use of sick leave and, where a sick leave absence is unforeseeable, an employer may only require notice when “practicable.” Employers should consider drafting attendance policies that impose discipline for absences that take place after an employee has exhausted all accrued paid sick days.

Along those same lines, while not explicitly addressed in the HWHFA, the Labor Commissioner has cautioned employers that requiring employees to submit documentation as a condition for payment of sick leave can arguably interfere with the employee’s use of paid sick leave. But, this conflicts with the Family Medical Leave Act’s (FMLA) express provision allowing employers to request medical certification from an employee who requests FMLA leave. If employers have a policy mandating or allowing use of accrued sick time before taking the remainder of the FMLA leave unpaid, employers may not ask for medical certification until after all accrued paid sick days have been used.

Interaction with City Sick Leave Ordinances

The intricacies of the HWHFA become even more complex for those employers with employees working in the cities of Oakland, Emeryville, and San Francisco. All three cities have enacted their own sick leave laws that impose additional requirements on employers. For example, all three laws expand the definition of “family members” to allow care for a “designated person” if the employee does not have a spouse or registered domestic partner. The Emeryville law broadens the definition of “family member” even further by allowing time off to care for guide dogs and signal dogs, or a family member’s guide dog or signal dog. Most importantly, these cities do not allow for frontloading of sick leave time. Queue the complicated accrual cap scenario discussed above.

Enforcement and Relief for Violations

The California Labor Commissioner has the authority to investigate alleged HWHFA violations, and we can expect it to come down hard on non-compliant employers. Potential relief for violations may include reinstatement, back pay and administrative penalties. The labor commissioner or the attorney general may also file a civil action and seek legal or equitable relief, attorney’s fees and costs. It is therefore critical employers not only create a sick leave policy that is compliant with the HWHFA and any applicable city ordinance, but that employers revise all existing personnel policies to comply with the law(s) as well.