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Guide to California Paid Sick Leave Law

October 01, 2020 7441

All employers are required to provide a set amount of paid sick leave (PSL) to employees who work California. The law establishes minimum requirements, but employers have options with how they provide and manage the time. 

California’s Healthy Workplaces, Healthy Families Act of 2014 requires all employers to provide a set amount of paid sick leave (PSL) to employees working in California effective July 1, 2015, or on the first day of employment for new employees.

The law establishes minimum requirements; however, employers have the option to provide more sick time off than the minimum required under the act or to combine the time into a personal time off (PTO) policy.

In addition to California’s mandatory PSL law, employers should review local ordinances that might also provide PSL benefits. This resource is limited to covering the requirements of the state PSL law and does not provide specific details on the local ordinance requirements.

Overview

  • The law applies to all employers, regardless of staff size.
  • All salary and hourly part-time, full-time and temporary employees who have worked in California for the same employer for 30 or more calendar days are eligible. Consider that, if an employee’s schedule is such that you anticipate them working a 30 or more calendar days for you in a year, that employee should begin accrual from the first day of employment.
  • Accrual begins the first day of employment; however, the employer can limit an employee from using the leave for the first 90 days of employment.
  • The year or 12-month benefit year is defined by the employer.
  • The employer can limit employees to using no more than three days a year (24 hours).
  • An employer who chooses to provide leave on an accrual basis — no less than one hour for every 30 hours worked — can limit the amount of PSL to a minimum of 24 hours (three days) each year and can cap the total accrual banked by an employee to a minimum of 48 hours (six days). Keep in mind that both regular and overtime hours are counted toward the employee’s accrual rate.
  • If the employer already has a policy in place that provides for PSL equal to or greater than the state requirement, there is no requirement to provide additional paid sick days. CDA recommends adding additional language to a practice’s employee manual that indicates that the policy adheres to the state requirements for time and broad use.
  • If an employee should leave the practice, unused sick leave does not need to be paid out unless the employer’s policy combines the sick leave and vacation into a PTO policy.
  • Noncompliance can result in fines and state penalties.

Employer options

PSL can be calculated using several methods depending on which option the employer chooses to provide the leave.

The statutory mandated accrual method

  • Both regular and overtime hours are counted toward the accrual rate of one hour for every 30 hours worked.
  • Salary (salaried) employees are considered to work 40 hours per workweek, but if the normal workweek is less than 40 hours then accrual will be based on their normal workweek.
  • Any accrued but unused time must carry over to the following year of employment. However, an employer can cap the employee’s total accrued amount at a minimum of 48 hours or six days.
  • Employers can also limit the amount of leave an employee can take in any one year to a minimum of 24 -hours.
  • It is possible for a part- time employee to accrue less than 24 hours if the employee doesn’t work sufficient hours to meet the 24-hour cap.

An optional accrual method

An employer may use a different accrual method, other than providing one hour per every 30 hours worked, provided that the accrual is on a regular basis so that an employee has no less than 24 hours of accrued sick leave or PTO paid time off by the 120th calendar day of employment or each calendar year, or in each 12-month period.

A pre-existing employer policy

If an employer already had a more generous PTO or PSL 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 meets the requirements below. These pre- existing policy accrual methods can be grandfathered in so long as certain conditions are met.

  • An employee has no less than one day or eight hours of accrued sick leave within three months of employment, each calendar year, or each 12-month period; and
  • The employee was eligible to earn at least three days or 24 hours of sick leave or PTO within nine months of employment. Note: If an employer modifies the accrual method used in the policy it had in place prior to January 1, 2015, the accrual method is no longer eligible to be grandfathered in and must now comply with the statutory accrual method, the optional accrual method, or the lump-sum method as described.

A lump-sum approach

In order to avoid the administrative burden of tracking of accrual and carry-over, employers have the option to provide the time using a “lump-sum method” that grants the full amount of leave at the onset of the benefit year. The employee is provided the time, not a payment of wages, in advance for mandated PSL use.

With this method, an employee does not carry -over unused time at the end of the benefit year. The employee will receive 24-hours or three new PSL days at the beginning of the established benefit year.

The policy must satisfy the following requirements:

  • The paid sick days must be offered at the beginning of each year of employment, calendar year, or 12-month period. For example, if you provided three days/24 hours on July 1, 2015, you would need to provide another three days/24 hours on July 1, 2016.
  • The employee must receive a minimum of 24 hours or three days (or equivalent to an established alternative workweek).
  • The employee must be provided the full amount of PSL.
  • The employer’s lump- sum policy must allow employees to use the leave for all of the same purposes and conditions specified under the law.

Limits or ‘caps’ on accrual

If an employer chooses any one of the accrual options, the employer should consider whether it wants to institute a cap on the maximum accrual. Any accrued but unused time must carry over to the following year of employment. However, employers are allowed to cap the amount of PSL carried over to the next year at 48 hours or six days.

If an employer does not cap the accrual by policy, a full-time employee (40 hours a week with no overtime) could potentially accrue more than 69 hours of PSL per year under the statutory accrual method, and be allowed to carry that over to the next year. This is nearly nine days per year if the employee works a 40-hour workweek.

Employers are encouraged to confirm that these annual and carry over accrual caps are in place with their payroll administrators as many of these providers rely on the employer to inform them of these limits. Payroll companies cannot be held responsible for employees who earn more than their employer’s intended limits, nor can employers take away time earned beyond the limits of the employer’s policy.

Employers who work an established alternative workweek

For those employers who work an established alternative workweek, the law as written requires 24 hours or three days of PSL, based on a standard eight-hour day/40-hour week schedule. The law does not consider employers whose employees have elected an alternative workweek schedule. Employees should be given the greater of either 24 hours or three days of PSL, regardless of whether the front-loading or accrual method is selected. This means that employees whose regular workday is 10 hours would get the greater of 24 hours or three 10-hour days.

The labor commissioner’s office issued an opinion letter that answers questions relating to how an employer provides “24 hours or three days” of PSL when you have employees that don’t work a traditional eight-hour day schedule.

Permissible usage

Employers must allow employees to use the time for the diagnosis, care, or treatment of an existing health condition, or preventive care, for themselves or a “family member.” For example, an employee could take PSL for a cold or other sickness, for a sick child, or for an annual physical or other preventive care, like a flu shot.

An employee can use the full amount of the paid sick days for a qualifying family member. Please note that local ordinances may have additional definitions of qualifying family members.

A family member under California’s sick leave law is a:

  • Child: Child is defined as a “biological, adopted, or foster child, stepchild, legal ward, or a child to whom the employee stands in loco parentis.” The definition of child applies regardless of the child’s age or dependency status. (“In loco parentis” means standing in the place of a parent, or acting as a parent to someone)
  • Parent (or parent-in-law): Parent is defined as a “biological, adoptive or foster parent, stepparent, or legal guardian of an employee or the employee’s spouse or registered domestic partner, or a person who stood in loco parentis when the employee was a minor child.”
  • Spouse or registered domestic partner.
  • Grandparent.
  • Grandchild.
  • Sibling.

PSL may also be used for an employee who is a victim of domestic violence, sexual assault or stalking. For more information, see Domestic Violence, Sexual Assault and Stalking Victims’ Leave notice.

Requesting time

  • PSL must be provided upon an employee’s oral or written request. If the need for PSL is foreseeable, an employee must provide “reasonable” advance notice. If not, the employee must provide notice “as soon as practicable.”
  • Employers should to adjust absence policies that require a doctor’s note when employees are absent for a set number of days or that discipline employees based on a specific number of absences. Absence policies should not count days off that are protected by this law (or any other protected leave of absence).
  • An employee may determine when and how much PSL they needs to use. The employee can decide if they want to take a full day or part of a day. For example, you cannot tell an employee that they need to take a half-day off for a brief morning doctor’s appointment. An employer, however, can set a “reasonable minimum increment” of time that must be taken not to exceed two hours. In other words, you can require the employee to take a minimum of two hours of PSL at a time.
  • An employer cannot require an employee to find a replacement worker for the time off.
  • An employer can lend paid sick days to employees in advance of accrual.

Requesting a medical or doctor’s note

The law is silent on the topic of whether and employer may require the employee to provide a doctor’s note of the need for PSL. The law simply states that the employee must provide reasonable advance notification. The labor commissioner has stated that denying leave because an employee failed to provide a doctor’s note or other details about the leave may lead to a claim against the employer for violation of the law. As a best practice, unless the doctor’s note is required pursuant to another leave law, there is no provision allowing an employer to require it for PSL.

Paying your employees

Employers must pay employees no later than the payday for the next regular payroll period after the sick leave was taken.

Hourly employees, need to be paid their regular or normal non-overtime hourly rate for the amount of time taken as PSL. For example, if an employee took two hours of PSL to attend a doctor’s appointment, they will be paid for those two hours at the same non-overtime hourly rate they would have earned if they had been working.

To determine the rate of pay, the employer may either:

  • Calculate an employee’s regular, non-overtime rate of pay for the workweek in which PSL time was used, whether or not the employee actually worked overtime in that workweek (in general terms, this is usually done by dividing the employee’s total non-overtime compensation by the total non-overtime hours worked); or
  • For commissioned employees, divide the employee’s 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.

Salaried employees’ PSL deductions

For salaried employees, PSL is calculated in the same manner as wages for other forms of paid leave time (for example, vacation pay, paid -time off).

Full-day absences

If an exempt employee has no paid sick leave (PSL), vacation or PTO accrued, or has used up all available PSL, vacation pay or PTO, you can make deductions from salary for full- day absences. To determine the daily rate, an employee’s annual salary should be divided by 52 for the weekly amount, then divided by the number of days the employee usually works in a week. The Division of Labor Standards Enforcement (DLSE) allows deductions of no more than one-fifth of a week’s salary for each day of absence, even if the employee normally works less than five days per week.

Partial-day absences

Deductions from salary for an exempt employee’s partial- day absence are not permissible. If an exempt employee is absent for a partial work day and has no PSL, vacation or PTO available, the employee must be paid for a full day if he/she performs any work that day.

Although you cannot deduct from an employee’s salary, you are allowed to deduct from an exempt employee’s PSL, vacation or PTO accrual bank for a partial-day absence. Here’s an example: Judy asks to leave work at 10 a.m. on a Friday for a medical appointment. Her normal scheduled hours are from 8 a.m. to 4 p.m. She has only two hours available in her accrued PSL bank. Because Judy worked two hours of her typical schedule, she must receive her full salary for the day. Even though she does not have enough time in her PSL bank to cover her absence, her employer cannot deduct from her salary for the time missed. The employer may, however, apply the two hours remaining in her PSL bank toward her salary for the day.

Read more in the Policies and Interpretations Manual from the Division of Labor Standards Enforcement.

Protections

PSL is a protected leave right afforded by law. Employers should not:

  • Deny employees the right to use PSL.
  • Take any action against an employee for using PSL or attempting to exercise the right to use accrued sick days. Prohibited actions include discharge, threat of discharge, demotion, suspension or any manner of discrimination.
  • Retaliate against employees who file complaints alleging violations of the Healthy Workplaces, Healthy Families Act, or who cooperate in an investigation or prosecution of an alleged violation or oppose any policy, practice or act prohibited by this law.

California Sick Leave Compliance Checklist

  • Required Poster.

    Employers must post a required Healthy Workplaces/Healthy Families Act of 2014 Paid Sick Leave poster*:

    • The poster advises employees of sick leave rights.
    • The poster needs to be posted in a conspicuous location.
    • Willful failure to post can result in a penalty of one hundred dollars ($100) for each offense.
    • *This poster is included in the CDA Required Poster set.
  • Payday Notice.

    The employer must provide the employee with a written notice indicating the amount of sick time available to the employee at each pay period. You can provide this notice to the employee either:

    • On the already required itemized wage statement; or
    • On a separate piece of paper provided to the employee with the payment of wages.
  • Notice to Employees

    • Employers also need to provide written notice of PSL information to all new hires and existing employees. The Wage and Employment Notice to Employees (Labor Code section 2810.5), contains information about an employee’s right to accrue and use PSL and about employee protections under the mandate.
    • Employers should have already provided information about the PSL law to employees hired before Jan.1, 2015. If an employer should change their PSL policy in the future, they must issue a new notice to employees.

Record-keeping

Keep records for at least three years that document the:

  • Number of hours that the employee worked.
  • Paid sick days accrued by an employee.
  • Paid sick days used by an employee.

If an employer does not keep adequate records, there is a presumption that the employee is entitled to the maximum number of hours accruable unless the employer can show otherwise by clear and convincing evidence.

The records must be available for inspection by the labor commissioner. The records must also be available for inspection by the employee upon reasonable request, as with other payroll records.

Local Ordinances

Some cities in California have local mandates that require additional sick leave for employees, in addition to the new sick leave law requirements. Often times, these local laws supersede the state’s PSL policy, especially those that provide greater sick leave benefits to employees. When the two laws differ, you must follow whichever is more generous to employees. This includes but is not limited to the following cities: