CALIFORNIA: Two options available for paid sick leave compliance

The new paid sick leave law in California, AB 1522, is on employers’ minds as we begin 2015. There are two ways to comply with the law, and you have until July 1, 2015, to determine which fits your company the best:

1. Accrual Method: Employers provide paid sick leave that employees accrue at the rate of 1 hour of paid sick leave for every 30 hours worked. The employer will have to track the hours of each employee and the employer may cap an employee’s sick leave accrual at six days or 48 hours. Any accrued, unused paid sick leave up to the employer’s maximum amount must be carried over to the next year. Employers may limit employees to using a maximum of three days or 24 hours of sick leave per year.

2. Front Loading Method: Employers provide each employee with at least three days or 24 hours of paid sick leave or paid time off (PTO) at the beginning of each year. Under this policy an employee does not accrue leave during the year since the employee receives all of the eligible sick leave on the first day of the year. An employer does not have to track the employee’s hours for accrual and does not have to carry over unused paid sick leave under this method.

Employers may set a minimum increment for the use of paid sick leave of no more than 2 hours. Employers do not have to provide sick leave in addition to PTO if the PTO policy either mirrors the accrual, carry over and use requirements set forth in AB 1522, or provides employees with at least three days or 24 hours of paid leave each year. Under either of the two options above, the employer must allow an employee to use the accrued paid sick leave or paid time off for the same purposes and under the same conditions as set forth in AB 1522. Any employer policy should reference these purposes and conditions.

Remember that notices are now required regarding the new sick leave law. The California Division of Labor Standards Enforcement (DLSE) has updated the required individualized notice to new hires, which employers must provide to overtime-eligible employees hired on or after January 1, 2015. You should also distribute the revised notice to existing overtime-eligible employees no later than January 8, 2015. In addition, you should already be displaying a paid sick leave poster in your workplace.

For assistance with ensuring that your company’s policy is in compliance, contact Vigilant’s California employment attorney, Pamela Helman (PamelaH@vigilant.org or 916-231-6000).

This article has been revised to reflect the following correction:

Correction: June 10, 2015
The original article offered a third method, the employer policy method. However, in practical terms this is the same as the Accrual Method.