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California Paid Sick Leave FAQ

October 26, 2023 18140

The following FAQ generally applies to California’s Mandatory Paid Sick Leave Law. Several California cities have implemented their own local ordinances offering more generous allowances.

Employers will need to be aware of the specifics and how they may differ from state law and adjust their policies accordingly.

Please reference Minimum Wage and Paid Sick Leave Ordinances by City for more information.

How do I comply with the new PSL law if my benefit year isn’t January 1?

Employers who provide PSL based on the accrual method have the option to provide the full 40-hours beginning new January 1 benefit date or “true-up” an employee’s hours to meet the 5 days or 40-hour obligation for the 2024 year.

Employers who provide PSL based on a front-load method who wish to change their benefit year to Jan 1 can provide the full 40 hours as of the Jan 1 date. There is no obligation to carry-over any unused 2023 time.

If I already provide my staff with sick time as part of my PTO policy, do I have to pay an additional five days?

It depends.

If your current policy was effective July 1 2015 or later, then you may continue to provide accrual rate of 1 hour for every 30 hours worked and modify the maximum accrual rates to reflect the new state law of 40 hours/five days annually with an overall rollover cap of 80 hours/10 days.

If an employer already had a more generous PTO policy in place prior to January 1, 2015, the employer may continue to use the pre-existing accrual method as long as the accrual method provided that the accrual is on a regular basis, provides no less than one day or eight hours of accrued sick leave or paid time off within three months of employment of the benefit year, and the employee was eligible to earn at least five days or 40  hours of sick leave or paid time off within six months of employment.

Ensure that the language in your current employee policy indicates that the time meets or exceeds the state requirements for the law.

If an employer should modify the accrual method used in the policy it had in place prior to January 1, 2015, the employer shall comply with the method as described above.

Be certain to post or distribute a notice for employees to review prior to implementation of a modified policy (provide the date that it becomes effective), meet to discuss, provide a new Wage Theft Notice and have each employee sign an acknowledgment of the new policy.

Note: It’s important to understand that while you don’t need to add additional days to your existing policy. You may include paid sick leave (PSL) in your PTO policy if it meets or exceeds the five days/40 hour PSL requirement (as of 2024) and subjects all of the time included in the policy to PSL laws. It is recommended for ease of compliance that employers have two separate policies, a sick leave policy and a vacation policy.

Note: Employers in the city of Santa Monica cannot provide PSL as part of a PTO policy. PSL must be a distinct amount of time separate from vacation time offered by the employer.

According to the California Paid Sick Leave Law, does our office have a choice in providing leave on an accrual basis? If it does, what would be the minimum paid leave that we would need to provide in order to comply?

Yes, your office does have a choice. If you choose to provide the time on an accrual basis, you must provide no less than one hour for every 30 hours worked. As of January 1, 2024, employers must provide 40 hours (five days) each year. Any unused time will roll over into the following year. An employer can cap the total accrual banked by an employee to 80 hours (10 days) and can limit an employee who has accrued more than 40 hours to only use 40 hours in a year under the new law. Keep in mind that both regular and overtime hours are counted toward the employee’s accrual rate.

My current policy stipulates that employees provide a physician’s note for time off due to illness. Can I still require this?

Under the law, you cannot require that employees provide a physician’s note for extended leave, unless the need for time exceeds beyond your minimum policy limit for providing leave or five days. For example, if you provide staff with more than the minimum requirement of five days or 40 hours and pay 7 days of sick leave, then your physician’s release note policy must exceed 7 days.

Is this a required benefit for part-time employees as well?

The paid sick leave law applies to all employees, full time, part time and temporary, as long as they have worked for the same employer in California for a minimum of 30 days. To better explain, if an employee is hired to work in the practice and their scheduled workdays will exceed 30 days in a 12-month period, this employee would be eligible for the benefit.

I have a mix of full-time and part-time employees in my practice. How should I provide the leave?

It is possible with the difference in office hours for you to provide the leave to employees you know will meet or exceed the minimum requirements (40 hours or five days) and “front load” the time in advance. In turn, you can provide the time to part-time staff on an accrued basis (minimum one hour for every 30 hours worked), as they will earn the time at different rates based on the days and hours worked in the practice. Your written policies will be important to outline the eligibility requirements for affected employees.

My hygienist is paid as an independent contractor. Is she eligible for sick leave under this new law?

We really have two issues at hand here. First, under almost all circumstances, hygienists by definition do not qualify for independent contractor status and therefore are considered W-2 employees. In its simplest form, a non-dentist independent contractor must meet the “ABC” standard and if they do, they would be ineligible for the benefit. Unless a hygienist meets the “ABC” standard, they are considered employees and must be paid as such, which means they do qualify for the sick leave time.

Is the sick leave accrued or renewed and available immediately every new benefit year?

As the practice owner/employer, you can determine if the sick leave time is accrued or provided as front-loaded full days. If the time provided is accrued (one hour for every 30 hours worked up to 40 hours annually), unused time must roll over into the following year and you can “cap” this total time at 80 hours banked overall.

If you front load the time, any unused time is lost at the end of the year and new days are provided at the beginning of the next benefit year.

I pay out unused sick time as a bonus at the end of the year. Can I continue to do so?

Yes, but you are not obligated to do so. Unused front-loaded time provided in a lump sum at the beginning of the year is lost at the end of the benefit year.

Employers who provide PSL on an accrued basis are discouraged in paying out PSL at the end of the benefit year as this may leave the employee with a zero balance in which to draw from at the beginning of the next benefit year.

Employees should not be discouraged from using paid sick leave, when necessary, in order to be eligible for the end of year bonus.

Note: Sick and vacation time combined as PTO must be paid out when employment is terminated.

Will employees who have several employers, such as hygienists who work at several offices, be paid up to or more than 25 days of sick leave each year?

It is possible for an employee with several employers to earn different amounts of sick time depending on the provided days or accrued hours earned and determined by each employer’s policy. The obligation to provide leave is tied to each individual employer. Typically, employees can only use the PSL time for absences on regularly scheduled days for that employer.

What rate of pay do we use to pay employees’ PSL if their wages include commissions and a base hourly rate?

You must pay sick leave at an employee’s “regular rate of pay” (which includes commissions), either for the workweek in which the paid sick leave was taken, or as determined by averaging over a 90-day period. The regular rate of pay is the same rate of pay used to calculate overtime wages. The 90-day “lookback” rate is 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.

The PSL rate for exempt employees is calculated in the same manner that you calculate wages for other forms of paid leave time.

How do I learn more about how to calculate the “regular rate of pay”?

The California Division of Labor Standards Enforcement provides FAQs and other information about how to calculate the regular rate of pay for overtime (which is the same for PSL), including examples. If you are still confused (understandable!), contact your employment lawyer.

Our employees have an alternative work schedule of four 10-hour days each week. Are they entitled to 40 or 50 hours of PSL per year?

Effective January 1, 2024, employees are entitled to “40 hours or five days” of PSL, whichever is more. Employees with 10-hour workdays are entitled to “five days,” or 50 hours, of PSL per year. (DLSE Opinion Letter 2015.08.07.)

Do we need to allow employees to use PSL for bereavement?

Yes. An employee may use vacation, personal leave, accrued and available sick leave, or compensatory time off that is otherwise available to the employee during bereavement leave. Remember, bereavement leave is now mandatory for California employees.  (Cal. Gov. Code § 1295.7(e)(2).)

Is there any burden on the employee to prove an actual illness is involved rather than personal or vacation time off? How can I keep my employee from abusing the sick leave time?

While you can’t keep an employee from abusing the time, we recommend that you add specific language to your employee manual regarding sick leave and its intended use.

See the CDA Practice Support Sample Employee Manual for assistance in adding the following language to your policy: “Sick leave is a form of insurance that employees accumulate in order to provide a cushion for incapacitation due to illness. It is intended to be used only when actually required to recover from illness or injury; sick leave is not for ‘personal’ absences. Time off for medical and dental appointments will be treated as sick leave. The practice will not tolerate abuse or misuse of your sick leave privilege.”

Should the vacation benefit be different from sick leave?
This is up to you. If an employer provides PTO instead of separate benefits, your policy must indicate that the employee is allowed to use the time for sick leave under the law.

Keep in mind that unlike vacation time, sick time is not paid out at the time of termination. From an administrative standpoint, separating the benefit might be beneficial.

Note: Including paid sick leave (PSL) in your PTO or vacation policy subjects all of the time included in the policy to PSL use and accrual laws. It is recommended that you have two separate policies.

Are hygienists and associate dentists (employees who are usually paid “by the day”) eligible for paid sick leave as well? Do I need to start keeping track of their hours?

Yes, hygienists and associate dentists (unless otherwise contracted) are considered employees of your practice. Each of these positions, while paid by the day, should have an hourly salary related to the workday. This rate must be based on a normal workday (or alternative workweek schedule).

With this, yes, they are eligible for the paid sick leave, and it is assumed you will continue to keep track of their hours. You will need to provide each employee with a written notice (pay stub) indicating the amount of sick time available to them at each pay period.

It is up to each individual practice to decide how it would like to provide the leave — lump sum or accrual basis.

If my hygienist works only one day a week and I don't use the accrual method, does this mean she receives three full days of sick leave like my full-time employees? Or can we grant 1 1/2 days upfront based upon the number of hours to be worked?

Because of the chance of underestimating the time, as a best practice, it is recommended that the full allotted time of PSL be provided to your employee. Under the law it is possible to have two separate policies that use front loaded time for full-time employees and accrual for part time employees.

I have a 90-day probationary period for my new employees. When are they entitled to sick pay?

Accrual begins on the first day of employment; however, your policy can indicate that your employee isn’t eligible to use the time until after satisfying the 90-day (91-day in some cities) probationary period.

Can an employee request sick pay for past time off or for a time not scheduled to work?

An employee is entitled to be paid any available earned sick time for a time when they miss scheduled work for a covered reason for themselves or covered individual. The intention of the law is to provide time to employees to care for themselves or a loved one and not suffer a loss of wages.

The law requires that an employer provide payment for sick leave taken by an employee no later than the payday for the next regular payroll period after the sick leave was taken. This does not prevent an employer from making the adjustment in the pay for the same payroll period in which the leave was taken, but it permits an employer to delay the adjustment until the next payroll. For example, if an employee did not clock in for a shift and was not paid for it but utilized their paid sick leave, you would have to pay them not later than the following pay period and account for it in the wage stub or separate itemized wage statement for that following regular pay period.

It is recommended that if you are aware that an employee took time off sick and had accrued sick time available to use at the time of the illness, pay the employee for the time.

When my employee called in sick, the employee did not indicate to me whether the time was paid sick leave, what should I do?

Ask. When an employee calls in, you should always ask them “will you be using your available sick time?”. By law, employees must direct the employer to use their paid sick leave for absences. It is a violation of the law for employers to use the time without permission.

Can I ask my employee for details related to the absence?

No. It violates employee privacy and the more an employer knows, it could open up discrimination issues.

Can I establish a set wage to pay my employees when they’re out sick?

No. Nonexempt (hourly) employees should be paid their regular or normal non overtime hourly rate for time that was taken as paid sick leave. For an employee paid on a “commission basis,” you would divide the total compensation for the previous 90 days (excluding overtime premium pay) by the total number of non-overtime hours worked in the full pay periods of the prior 90 days of employment.

For additional frequently asked questions, please visit the Department of Industrial Relations website.

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