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Paid Sick Leave Amendments: Effective Immediately

California’s Paid Sick Leave Law was written with several ambiguities, resulting in confusion regarding compliance. Governor Brown signed a bill designated as ‘urgency legislation’ that addresses and attempts to clarify several of the obscurities within the still new law as well as providing some alternative methods of complying with particular provisions. The new bill, AB 304, amends several sections of the California Paid Sick Leave Law and is effective immediately. Some notable provisions are:

  • An alternative method of accrual can be used as long as it is on a regular basis and the employee will have 24 hours of Paid Sick Leave available by the 120th calendar day after hire.
    • E.g. 1.4 hours per week; 2.8 hours every other week; 4.8 hours semi-monthly; 8 hours per month (CAUTION; You end up needing to accrue more per period when using semi-monthly or monthly as the 120th day can fall before the end of a full fourth month. So you have to accrue it in 3 months for monthly or 5 semi-monthly periods in order to guarantee it will be there for use by the 120th day.)
  • Explicit allowance to use any 12-month period (calendar year, employment year, or other) as the “year” for purposes of accruing and using sick leave.
  • A Grandfather Clause for policies implemented prior to January 1, 2015, for employers that provided paid sick leave or paid time off/vacation using a different accrual method other than one hour per 30 hours worked. An employer’s policy will be grandfathered in provided that (a) the accrual is on a regular basis so an employee (including one hired after January 1, 2015) has no less than one day or eight hours of accrued sick leave or paid time off within three months of employment each calendar year or each 12-month period and (b) the employee was eligible to earn at least three days or 24 hours of sick leave or paid time off within nine months of employment. If an employer reduces the accrual amount or rate used in the policy that it had in place before January 1, 2015, the employer will need to comply with one of the accrual methods allowed by the original sick leave law or the amendment.. Note that even if an employer’s policy is grandfathered in for accrual purposes, the employer still needs to ensure it complies with other significant provisions of the law (e.g., pay calculation, broad definition of family member, notice, and record-keeping).
  • An allowance that if you provide unlimited sick or PTO, you can meet the notice requirements by stating “unlimited” on the pay stub or other written notice provided to employees.
    • Clarification that if an employee is rehired within one year, previously accrued but unused sick time must be reinstated UNLESS it was paid out upon separation.
    • Additional methods for calculating the pay rate. Employers may now use any of the following calculations:
      • Paid sick time for nonexempt employees shall be calculated in the same manner as the regular rate of pay for the workweek in which the employee uses sick time;
      • Paid sick time for nonexempt employees shall be 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 in the prior 90 days of employment;
      • Paid sick time for exempt employees shall be calculated in the same manner as the employer calculates wages for other forms of paid leave time.
    • An exclusion for retired annuitants.

    If you need to create a new Sick Leave Policy we have a human resource expert waiting to help you with our HR On-Demand service. Plus, you also get unlimited access to the HR Support Center, an online database and encyclopedia of HR laws, policies, and resources.

    Call California Payroll today and let us help guide you towards compliance.

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