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California Requires Paid Sick Leave

California recently enacted AB 1522, called the Healthy Workplaces, Healthy Families Act of 2014, which requires most California employers to provide paid sick leave to its employees effective July 1, 2015. California employers already face complex employment laws, which prove to be a challenge for most small businesses. This new bill will only add to the list of laws California business must be aware of to remain compliant. We have put together a list of the most frequently asked questions MMC has received since the mandate was passed to help you with this recent change.

FAQ: California Paid Sick Leave

Q: I only have a few employees, does this apply to my company?

A: All employers are covered, no matter the size of the employer. There are very few exceptions, most revolve around collective bargaining agreements. Also, providers of in-home support services under certain sections of the Welfare and Institutions Code are not covered.

Q: Which employees are eligible for paid sick leave?

A: All employees that work for an employer for 30 days are eligible. This includes all employee classifications such as exempt, non-exempt, part time, temporary and per diem employees.

Q: When does paid sick leave begin to accrue?

A: Paid sick leave begins to accrue on the first day of employment.

Q: When can employees begin to use their paid sick time?

A: An employee has the right to use paid sick leave beginning on the 90th day of employment.

Q: How much paid sick leave can an employee earn?

A: Paid sick leave is earned at a rate of one hour for every 30 hours worked.

Q: Can an employer limit the amount of paid sick time employees can earn?

A: Yes. Paid sick time can be limited to 3 days or 24 hours per 12 month period. The 12 month period can be a rolling 12 month period, a calendar year or an anniversary year.

Q: Does the paid sick leave bank reset to zero at the beginning of each new year?

A: No. Accrued and unused paid sick time must be carried over into the next year.

Q: How much paid sick leave can an employee have in their bank?

A: The Paid Sick Leave bank can be capped at 48 hours/six days. This means once an employee has accrued 48 hours in the bank no additional accrual can happen until a sufficient amount of sick time is used to allow for additional accrual.

Q: I currently offer a Paid Time Off (PTO) bank which can be used for sick or vacation time, must I now offer a separate paid sick leave bank?

A: Maybe. If your PTO program offers the same or more time required under the new paid sick leave requirements then no, you do not have to offer additional time off.  If your PTO program offers less time than that required by the paid sick leave mandate then yes, you will need to either bring your current PTO plan up to the levels required under paid sick leave or offer a separate paid sick leave bank.

Q: Can we require the employees to use the paid sick leave for themselves only?

A: No. California’s “Kin Care” requirement still exists. “Kin Care” requires that an employee be allowed to use 50% of their available annual sick leave to attend to an ill family member.  A family member includes child, parent, spouse, domestic partner or child of a domestic partner.  The definitions of “child” and “parent” include adopted, foster, step and biological relationships, as well as legal guardians and wards. The criterion for domestic partnership is defined in Family Code Section 297(b).

Q: How will employees know how much paid sick leave they have available?

A: The employer must include the paid sick leave balance on the wage statement/paycheck stub or can provide a separate document with the balance on each pay day.

Q: Do I have to pay out unused paid sick leave at termination like unused vacation has to be paid out?

A: No. However, if a worker is rehired/reinstated less than 12 months from their termination date the unused paid sick leave balance at the time of termination must be restored.

This is a great time to review your handbooks, agreements and policies to make sure you are in compliance with California law. MMC’s comprehensive HR Outsourcing solutions protect businesses from worrying about the growing number of employment laws.

If you are not a MMC client, you can set up a free consultation with our Business Development team to see how your business can benefit from our HR services. Call: 800.899.6624 or email us.