On August 30, 2014, California Governor Jerry Brown commented on the Legislature’s passage of a bill entitled the “Healthy Workplaces, Healthy Families Act of 2014”: “Tonight, the Legislature took historic action to help hardworking Californians. This bill guarantees that millions of workers – from Eureka to San Diego – won’t lose their jobs or pay just because they get sick.” The bill, which he signed into law September 10, will require employers statewide to provide paid sick leave.
Though the requirement that employees receive paid sick leave under the Act does not kick in until July 1, 2015, the Act already has employers sweating the law’s myriad of new provisions, mindful of the compliance headaches the new law’s vagaries are certain to bring. If only there were a vaccine… For now, as is often the case, the only sure cure is prevention. Awareness and proactive preparation is the only way to weather the worst of this latest legislative virus.
Employees May Earn 24 Hours of Paid Sick Leave Per Year: The Act grants a right to earn paid sick days to employees who—on or after July 1, 2015—work in California for 30 or more days within a year. Paid sick days will accrue at the rate of one hour for every 30 hours worked. The employee may use the accrued sick days beginning on the 90th day of employment. Exempt employees’ accrual is based on a presumed 40 hour-workweek; except that an exempt employee whose normal workweek is fewer than 40 hours will accrue paid sick days based on that employee’s normal workweek.
An employer can limit use of paid sick days to 24 hours or three days in each year of employment. No accrual or carry over is required if the full amount of leave is received at the beginning of each year. The Act does not require extra paid sick days to be paid by employers whose paid time off policies already provide as many sick days as the Act now requires.
Qualifying Reasons for Use: Employers must, upon an employee’s written or oral request, provide paid sick days for (1) the employee or employee’s family member’s diagnosis, care, or treatment of an existing health condition, or preventative care, and (2) an employee who is a victim of domestic violence, sexual assault, or stalking.
No Pay-Out Required: The Act does not require employers to treat sick pay like vested vacation, so the Act does not require employers to pay employees for accrued, unpaid sick days upon termination. However, the employer must reinstate unused sick days if the employee is rehired within one year of the termination.
Notice and Posting Requirements: Employers must provide employees with written notice stating the amount of paid sick leave available on the employee’s wage statement or on a separate document provided to the employee on the date that wages are paid. Violation of this provision subjects the employer to penalties under the Act, but not under Section 226. The Act also requires that the employer post a poster, and directs the Labor Commissioner to create a poster for employers, containing details regarding the rights provided by the Act. The Act further requires employers to keep records documenting hours worked and sick days accrued by employees for three years, and to make the records available to the Labor Commissioner and employee for inspection.
The Act also amends the Wage Theft Notice law to require employers to additionally include a statement on the Wage Theft Notice provided to employees at the time of hire that an employee: may accrue and use sick leave; has a right to request and use paid sick leave; may not be retaliated against or terminated for requesting or using accrued sick leave; and has the right to file a complaint against an employer who retaliates.
Prohibits Adverse Action and Creates Rebuttable Presumption: The Act prohibits employers from denying employees the right to use accrued sick days, and from discriminating or retaliating against an employee who uses or attempts to use paid sick days, files a complaint with the Labor Commissioner, alleges a violation of the Act, participates in an investigation under the Act, or opposes any policy or practice prohibited by the Act. The Act creates a rebuttable presumption of unlawful retaliation if an employer denies an employee the right to use accrued sick days or takes other adverse action against an employee within 30 days of the employee filing a complaint, cooperating in an investigation, or opposing a practice prohibited by the Act.
Enforcement and Penalties: The enforcement provision is lengthy and not the picture of clarity, but generally provides that employers who violate the Act are subject to administrative fines imposed by the Labor Commissioner, and to civil penalties on behalf of the aggrieved employee. Liable employers are also responsible for attorney’s fees, costs, and interest in actions by the Labor Commissioner or the Attorney General. Among these potential fines and penalties are an administrative penalty that includes the greater of the dollar value of the number of paid sick days withheld from the employee times three, or $250, not to exceed $4,000. If the violation results in harm to the employee, then a $50 per day additional penalty applies, up to $4,000. Employers are also subject to a $100 per offense penalty for willfully violating the posting requirement. Only employers that make an “isolated and unintentional payroll error or written notice error that is clerical or inadvertent” are absolved from penalty or liquidated damages assessments.
Granted Immunity: Employees whose employment is governed by a valid collective bargaining agreement that provides for the payment of wages, hours of work, working conditions, premium overtime, regular hourly rate of pay not less than 30 percent greater than the state minimum wage, paid sick or similar leave, and final and binding arbitration of disputes regarding the paid sick days provision. Also exempt are construction employees covered by CBAs with specified provisions, in-home supportive services providers, and certain air carrier and flight personnel.
The new legislation will appear in the newly created Article 1.5 (commencing with § 245) of Chapter 1, Part 1 of Division 2 of the Labor Code, and an amendment to § 2810.5 of the Labor Code (the Wage Theft Notice law).
Stay tuned for additional updates on significant labor and employment bills the Governor has already signed, as well as bills the Legislature passed by the close of its session this Labor Day weekend that are awaiting the Governor’s consideration.
Edited by Julie Yap