Under California’s paid sick leave law, which has been in effect since July 1, 2015, all temporary, part-time and full-time employees are eligible to use up to 24 hours or 3 days (whichever is greater) of paid sick leave each calendar year or other designated 12-month period. Employers can (i) accrue paid sick time for employees at a rate of 1 hour for every 30 hours worked, or (ii) grant up front 24 hours or 3 days (whichever is greater) of paid sick time at the beginning of each 12-month period.
If your company already has a PTO policy, you may not need to provide additional paid sick time if your existing policy satisfies the law’s accrual, usage, and carry over requirements.
Keep in mind that many cities and counties in California have passed paid sick leave ordinances or regulations of their own, and those regulations and ordinances often have different or additional requirements. As of January 2017, the list of cities in California with paid sick leave ordinances includes San Francisco, Berkeley, Oakland, Emeryville, Los Angeles, San Diego, and Santa Monica. Remember that new regulations or ordinances can be enacted at any time going forward, so be sure to stay updated on new laws.
Also remember that if more than one paid sick leave law applies, you must comply with the provisions of each law that most benefit the employee. With all of this in mind, your paid sick leave policy and practices should be reviewed periodically by your legal counsel for the state and cities or counties in which your employees are working to ensure compliance with all applicable federal, state, and local laws, and to ensure that your policy and practices are appropriate to your particular situation.
All temporary, part-time and full-time employees who, on or after July 1, 2015, work in California for the same employer for 30 or more days within a year from the commencement of employment are entitled to paid sick leave.
Employees may use accrued paid sick time for any of the following reasons: the diagnosis, care, or treatment of an existing health condition of, or preventive care for, the employee or the employee’s family member. “Family member” for purposes of a paid sick leave policy includes a spouse, registered domestic partner, child (regardless of the child’s age), parent (including a stepparent or parent-in-law), grandparent, grandchild, or sibling. Paid sick leave may also be used by an employee who is a victim of domestic violence, sexual assault, or stalking to seek aid or medical attention, obtain services or counseling, or participate in safety planning.
Setting up a compliant policy
Set up a policy that meets the minimum California requirements and document it. California’s paid sick leave law outlines the different methods for accruing and paying sick leave time that will satisfy the state law’s requirements. Here is a quick summary:
- Accrual Method: You can accrue paid sick leave at the rate of 1 hour for every 30 hours worked. Under this method, accrued unused paid sick leave must be carried over to the following year or other 12-month period that your policy defines (such as a 12-month period that begins on the employee’s date of hire), and the maximum annual accrual of paid sick leave may be capped at 48 hours (or 6 days, whichever is greater) if your written policy provides for a maximum accrual cap. Also, you can restrict the number of paid sick time an employee may use per calendar year or other 12-month period to 24 hours (or 3 days, whichever is greater).
- Up-Front Method: You can provide 24 hours (or 3 days, whichever is greater) at the beginning of each calendar year, anniversary date or other 12-month period that you designate in your policy. Under this method, there’s no need to track accrual or to carry over paid sick time into the following year..
- Company’s Policy: You can use your existing PTO policy if your policy satisfies the law’s minimum accrual, usage, and carryover requirements. For your exempt employees, you can use an existing “unlimited” time off policy, if you have such policy.
An example in Justworks
You can set up an example policy in Justworks by following the directions here, and using the following settings:
- Type of policy: Sick leave
- Effective date: July 1, 2015 or earlier
- Track accrued hours: Yes
- Accrual Rate: 1 hour of paid sick time for each 30 hours worked
- Maximum accrual: 48 hours or 6 days (whichever is greater)
- Days of leave per year: 9 or higher
- Do unused days carry over: Yes
- Limit carryover days: Can be Yes or No
- Tenure levels: up to you
- Who should the policy apply to: All employees
- When do employees begin to accrue: On date of hire
- When may employees use accrued sick time: After 90 days of employment
Please note, we’re providing the example above to you for informational purposes only. This example should not be construed as legal or tax advice.
According to the new law, you need to make a poster with this text available to all your employee. Justworks will redesign this poster and add to all California-based employee’s Document Center.
If your office is based in California, we also highly encourage you to print out one of the posters above and hang it in your office.
Under California’s paid sick leave law, you required to distribute a wage notice to each of your non-exempt employees based in California. The wage notice refers to employees’ wage information, workers’ compensation, and paid sick leave, amongst other things. We’ve included a copy of the required notice here.
Information on pay stub
You must show, on an employee’s pay stub or a document issued the same day as their paycheck, how many days of sick leave the employee has available. You also must keep records showing how many hours employees have earned and used for three years. This information may be stored on documents available to employees electronically.
If you set up a paid sick leave policy with Justworks, we will automatically add this information to employee pay stubs.
Limitations on paid sick leave
Employees begin accruing paid sick time on their first day of work, but you can limit their ability to take their paid sick leave until after 90 days of employment. Also, you are not required to pay out accrued, unused paid sick time when an employee separates from employment with you, unless you are providing paid sick time through your PTO policy, in which case you will need to pay out all of an employee’s accrued, unused PTO upon separation from employment. Also keep in mind that if a separated employee is re-hired within a year of separation, you must reinstate her prior unused paid sick leave.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.