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California Sick Leave Law Gets A Facelift
AB 304 makes several changes to the new sick leave law, including employers may use different accrual methods, other than providing one hour of sick time for every 30 hours worked. Such accrual methods may be calculated by day, week, month, payroll period, or other method, provided that sick leave or paid time off (PTO) is earned on a regular basis and that an employee accrues at least 24 hours of sick time or PTO by the 120th calendar day of employment. It appears that an employer does not have to follow the statutory accrual method of one hour per every 30 hours worked provided that the employee receives no less than 24 hours of accrued leave or PTO by the 120th calendar day of employment or each calendar year, or in each 12-month period. A third option is available under the law where "an employer may satisfy the accrual requirements...by providing not less than 24 hours or three days of paid sick leave that is available to the employee to use by the completion of his or her 120th calendar day of employment." However, this option only applies to paid sick leave and not PTO (Labor Code sec. 246(b)(4)).
An employer may calculate the rate of pay for sick leave or PTO for non-exempt employees by 1) using the calculation for the regular rate of pay for the workweek in which the employee uses paid sick time; or 2) by dividing the employee's total wages (not including overtime pay) by the employee's total hours worked in the full pay periods of the prior 90 days of employment. For exempt employees - the employer can calculate their rate of pay for sick leave or PTO "in the same manner as the employer calculates wages for other forms of paid leave time."
Another significant change involves the amending of the law to provide a "grandfather" clause for sick leave and PTO policies that were in place prior to January 1, 2015. From what it appears, if an organization already had a paid sick leave or PTO policy in place prior to January 1, 2015, they are able to use their existing accrual method and not provide an additional three days or 24 hours of sick time or PTO as long as their existing policy accrues on a regular basis and meets both of the following requirements: 1) employees have no less than one day or eight hours of accrued sick time or PTO within three months of employment, each calendar year, or each 12-month period; and 2) employees were eligible to earn at least three days or 24 hours of sick time or PTO within nine months of employment (Labor Code sec. 246(e)).
Other significant changes include clarifying that an employee "...who works in California for 30 days..." can have those 30 days count working for the same employer; updating the definition of "employee" to not include retired annuitants of a public entity; specifying that an "employee in the construction industry" means an employee "performing work associated with construction" - deleting the reference to "onsite" from the previous version; providing that an employer is not obligated to inquire into or record the purposes for which an employee uses paid sick leave or PTO; providing that an employee is not entitled to a reinstatement of their accued PTO if it was paid out at the time of termination.
In closing, although AB 304 provides much needed clarification on issues plaguing the paid sick leave law, it does not address many other questions surfaced by employers attempting to implement the new law. As of this posting, the California Labor Commission's site has not been updated to include information on these updates. We anticipate that the state's website will soon provide more information and possible guidance. This posting highlights just some of the updates provided for under AB304. For more information, please visit the web links provided below.
http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB304
http://www.natlawreview.com/article/amendments-to-california-paid-sick-leave-law-effective