This post was updated March 2018.
Among a number of regulatory changes in 2018, more and more states and municipalities are enacting their own laws and ordinances for paid sick leave, ensuring employees have protected time off for their own illness or to help a family member. These rules are designed to be employee-friendly, and they can come with unique challenges for employers, especially those whose current policies and practices are at odds with the new requirements.
The state of California led the charge for employee-friendly paid sick leave policy. The California Paid Sick Leave (PSL) statewide mandate took effect July 1, 2015, as part of the Healthy Workplaces, Healthy Families Act of 2014.
Most recently, Maryland’s law took effect on Feb. 1, 2018 and Washington state’s law took effect Jan. 1, 2018. Seattle, Tacoma and Spokane also have city ordinances that require sick leave for employees.
Other states have enacted similar laws, including Connecticut, Massachusetts, Oregon, Vermont, Arizona and the District of Columbia. Rhode Island’s paid sick leave law will begin on July 1 of this year. Additionally, numerous cities including New York City, Chicago, Minneapolis and Austin, currently have or will soon have their own ordinances.
As of January 1, 2018, the minimum wage in California increased to $10.50 an hour, and sick time must be paid at this or a higher rate.
Even if your state or city doesn’t currently have a paid sick leave law, one could be coming. Or you may have employees working in one of these states or cities, particularly with the increase in telecommuting across various industries. It can be helpful to educate yourself on what other states and cities have done.
Here’s a look at what the California law entails for employees and employers of all sizes.
California Paid Sick Leave at a glance
- The statewide law requires all companies, regardless of size, to provide three days or 24 hours of protected sick leave annually to all employees, regardless of status (full-time, part-time, exempt, nonexempt, etc.).
- You can’t penalize employees for using up to the protected amount of sick time.
- Employees can use paid sick leave for themselves or for a family member for diagnostic or preventive care, to care for or treat an existing health condition, or for certain reasons related to being a victim of sexual assault, domestic violence or stalking.
- A family member is defined as the employee’s parents (including in-laws), children, spouse, registered domestic partner, grandparents, grandchildren, and siblings.
- If your city has its own sick leave ordinance, adhere to whichever law is more generous, whether that be local or state law.
See Also: Workers’ Compensation Insurance
How do the sick hours work?
The California law requires employers to provide protected sick leave for their employees at an accrual rate of one hour per 30 hours worked. The employer can limit the amount of time taken per year to three days or 24 hours and can choose to cap the accrual at six days or 48 hours. The employee must be allowed to carry over up to six days from year-to-year, but once they’ve reached the cap, they will no longer accrue additional time in their sick bank. Once the employee uses banked sick time and available sick hours falls below the cap, the employee will begin accruing time again up to the cap.
Alternatively, the company can choose to front-load three days or 24 hours of paid sick time into each employee’s sick bank. They can use any or all of the time during the calendar year, and their bank will reset to 24 hours on Jan. 1 each year. Employees won’t roll over time if the 24 hours is front-loaded.
You can also offer the 24 hours as part of an employee’s overall paid time off (PTO), but if you do this, note that you’ll be required by law to pay out any remaining PTO if the employee leaves your company. If the time is classified as sick leave, there’s no requirement to pay it out.
Nonexempt employees are entitled to the full 24 hours even if they don’t normally work 24 hours in three days. Their pay for sick time can be calculated using their regular rate of pay for the week in which they took the sick time. Rate of pay may be calculated by dividing total regular wages (not including overtime) in the previous 90 days by the total number of hours worked during full pay periods in those 90 days; or with the same method used to calculate pay for other types of paid time off.
After 90 days of employment, an employee may use accrued sick time and can choose how much protected sick leave they take at once (e.g. a half day versus a full day), but the employer can require a two-hour minimum.
Who is impacted?
If you have any employee working in California for more than 30 days over the course of a calendar year, you are required to adhere to the state’s law, regardless of your company’s size. This means even if your company isn’t located in California, an employee who frequently travels to California for business or who lives in California and telecommutes, for example, may be covered by the PSL law.
The law also extends to all types of employees: full-time, part-time, seasonal, temporary, exempt, and nonexempt.
What circumstances qualify for sick leave?
Employees can use PSL for themselves or family members, for diagnostic or preventive care or to care for or treat an existing health condition. Additionally, team members can use PSL for certain reasons related to being a victim of sexual assault, domestic violence or stalking.
Under the California law, the definition of a “family member” was also expanded and now includes the employee’s parents (including in-laws), children, spouse, registered domestic partner, grandparents, grandchildren, and siblings.
What else should employers know?
Most importantly, employers are not allowed to take disciplinary action, discriminate or retaliate against an employee for taking protected sick leave. If an employee makes a verbal or written request for PSL, you’re required to allow them to take it. The employee should provide advance written notice of a planned absence (for example, an annual check-up). For an unplanned absence (e.g. a sick child), they should notify the employer as soon as reasonably possible.
It’s important to have clear, written policies for reporting a planned or unplanned absence and notifying employees of limits on the number of hours taken annually (the law requires a minimum of 24 hours of PSL) or caps on accrual. Employers should also review existing policies, such as performance review processes, to ensure they aren’t based in any way related to protected absences.
The state labor commissioner’s office provides two required pieces of communication: a poster about protected sick leave and a Notice to Employee form. The poster, which outlines the policy and steps an employee can take if they believe their rights under the law have been violated, should be displayed in a conspicuous, public area. An individualized Notice to Employee form detailing paid sick leave information should be provided to most new nonexempt employees (exempt employees, most government employees and those covered by a collective bargaining agreement that meets specific requirements are excluded from the form requirement).
In addition to providing the specified PSL hours, employers are required to provide written documentation of each employee’s accrued hours either on each pay stub or separately from the pay stub but on the same day. PSL should be paid no later than the next pay date after the employee uses it. Employers are required by law to keep a record of PSL accrual, time taken, and total hours worked for each employee for a minimum of three years.
In 2017, California updated their frequently asked questions and clarified that employers that were grandfathered in and already offered paid time off for sick leave do not have to offer an additional 3 days as long as their policy offered a minimum of 3 days of leave a year. Basically, the must meet or exceed the requirements of the current law.
The update also clarified that the law does not change how employees calculate the rate for paid time off taken for other purposes, such as personal time.
How does the statewide law interact with city-specific protected sick leave ordinances?
The employer should adhere to whichever policy is most generous in the amount of protected sick leave provided. For example, San Diego’s policy, which took effect in 2016, requires employers to provide five days of protected sick leave to each employee annually.
How can employers in other cities and states prepare?
Being knowledgeable about what other cities and states are doing is a good start. Some companies may choose to be proactive in revamping their own company-wide sick leave and attendance policies, particularly if they have employees who work in covered locations.
For employers in states and cities that have announced future sick leave initiatives, now’s the time to review and update existing policies to be fully compliant once the regulation takes effect. This includes reworking policies that punish employees for excessive sick absences and determining if other disciplinary actions not related to use of protected leave will be considered.
It’s always a good idea to have a contingency plan, so, whenever possible, employers should ensure each job function can be executed by more than one employee and that back-ups are available.
While new sick leave laws and ordinances may provide challenges for companies, they will likely only become more widespread in the coming months and years, so be as prepared as you can for changes.
California Paid Sick Leave: Frequently Asked Questions
10 Things Businesses Might Not Know About California’s Paid Sick Leave Law