Cleanup legislation for sick leave law
Legislation to clarify some of the ambiguities found in the Paid Sick Leave Law (AB 304) has been passed by the Legislature and signed by Gov. Brown.
'There is a lot of misinformation about what this law requires,' said Allan Zaremberg, President and CEO of the California Chamber of Commerce, in a statement. 'This is not a straightforward requirement of three days of leave per employee as many have suggested. Rather, employers must create a policy addressing the amount of leave they are providing or else they will be subject to the statutory mandated accrual rate of one hour of sick pay for every 30 hours an employee works.'
'This means that if employers are not clear about capping their leave at three days, full time employees will be entitled to 69 hours of paid leave per year and they will be allowed to carry that over to the next year, and so on. This is nearly nine days – not three – if the employee works a 40 hour workweek. It is critical that employers understand that they must have a policy in place – preferably in writing – that clearly communicates to employees about the amount of leave they are providing.'
In addition, it is important to note that the law applies to private and public employers regardless of size; there is no exception for small employers. Any employee who has worked in California for 30 or more days within a year from the beginning of his/her employment will be entitled to paid sick days.
'The amendment is intended to clean-up some of the problems with the original law,' said Jennifer Phillips, ESQ., SPHRD, at Dickenson, Peatman & Fogarty in Santa Rosa. Phillips, who has been following the progress of the law closely, summarized of some of the key changes in the amendment:
1. Clarifies that employees must work 30 days in a year for the same employer in California for entitlement to paid leave.
2. Allows different accrual method other than one hour for every 30 hours worked as long as the employee receives at least 24 hours of paid leave by 120th day of employment. (This appears to address accruing leave by pay-period instead of by hour.)
3. Clarifies that an employer may limit use of paid sick leave to 24 hours or three days per calendar year, employment year, or any other 12-month basis. (This may assist in proration concerns.)
4. Allows employers to state 'unlimited' sick time available on wage statements for employees with unlimited time off.
5. Clarifies that employer has no obligation to determine the reason an employee takes time off. (This appears to relieve employers from the responsibility of making sure employees use paid sick leave they may otherwise be entitled to receive. It is up to the employee to state reason.)
Perhaps the biggest change has to do with the rate of pay required for paid sick leave. In the original law there was a complicated formula looking back over 90 days for anyone receiving commissions, variable hourly rates, or piece-rate pay. There was also confusion as to whether the formula applied to both exempt and non-exempt employees. The amended law gives employers the option to pay non-exempt hourly employees in one of the following ways:
1. Their 'regular rate' calculated from the work week in which the employee uses paid sick time (this is the same calculation already used to determine overtime pay); or
2. The 90-day look-back calculation from the original law.
It also clarifies that exempt employees can be paid however the employer normally calculates wages for paid time off.
California's new sick leave law also carries consequences for non-compliance. If employers do not comply with the new law, they can face Labor Commissioner enforcement measures that include awarding back pay, damages and penalties up to $4,000. The law also specifies that employers are prohibited from retaliating against employees who take sick leave.
The California Chamber of Commerce is providing resources to help employers understand and comply with the new sick leave mandate. A video, White Paper and Fact Sheet are available at www.calchamber.com. In addition, the Department of Industrial Relations provides a FAQ at: http://www.dir.ca.gov/dlse/Paid_Sick_Leave.htm.
