California Paid Sick Leave Law Clarified

influenza-156098_1280The new California paid sick leave law went into effect on July 1, 2015. The law was so confusing that it was clarified with a new bill soon after. Is your policy in compliance?
Here are the basics:

Who gets leave: Employees who work for an employer for more than 30 days within a year is entitled to paid sick days.

Accrual: At least 1 hour for every 30 hours worked. Accrual may be at a different rate if it is accrued regularly and the employee accrues 24 hours or 3 days of leave by the 120th day of work. Employers may cap accrual at 48 hours or 6 days per year.

Carry-over: Accrued but unused sick days must carry over into the next year, unless you give the employees 3 days of paid sick leave at the beginning of each year.

Use: Employee may start using accrued paid sick days beginning on the 90th day of employment. Employers may limit use to 24 hours or 3 days in each year of employment, calendar year, or 12 month period.

Written notice: Employers must provide each employee with written notice of the amount of paid sick leave available or PTO leave provided instead of paid sick leave.

Rate of Pay: Non-exempt employees – divide employee’s total wages, not including overtime premium pay, by employee’s total hours worked in the full pay periods of the last 90 days. Alternatively, it may be calculated in the same manner as the regular rate for calculating overtime in the week the employee takes sick leave, regardless of whether overtime is worked in that week. Payment to be made no later than next payroll period.

Record-keeping: 3 year requirement.

Termination: No pay-out requirement at the time of termination of employment relationship.

Reinstatement of Sick Leave: Employees who are rehired within a year of separation are entitled to reinstatement of sick leave unless employer voluntarily cashed employee out for sick leave or PTO at time of separation.

Why this matters: Unpaid sick leave = failure to pay wages.  Let’s say you have 10 employees who get paid $20 per hour and take 3 days of unpaid sick leave each year for 3 years. Upon separation of the relationship, they each have $1,440 in unpaid wages, plus 30 days’ worth of waiting time penalties, and that amount goes up to $6,240 per person, with a total potential liability of $62,400, excluding other penalties.
Is your current policy in compliance?  Contact me or call 949.529.0007 to ensure you’re in compliance.

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In: Employment Law, New Laws

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