What Employers Need to Know about California’s New Sick Pay Law

We are continuously keeping a watchful eye for changes that affect our clients, which is why we are alerting you to California AB 1522. This law, also known as the Healthy Workplace, Healthy Families Act of 2014, became effective January 1, 2015 and California businesses must take immediate steps to make sure that they are in compliance.

Employer posting, notice and recordkeeping requirements went into effect on January 1, 2015, and employee entitlement to paid sick leave takes effect on July 1, 2015, provided the employee has worked in California for 30 or more days within a year from the commencement of their employment.

Posting Requirement

Beginning January 1, 2015, employers must display a poster notifying employees of their paid sick leave rights. This poster must be available for viewing in a conspicuous place in each workplace. Employers who willfully violate the posting requirement may be subject to a penalty of up to $100 per offense.

Covered Employers

Employers who employ at least one person are covered under AB 1522, regardless of their size or status.

Covered Employees

Employees who work in California for 30 or more days within a year from commencement of employment are covered under AB 1522. Covered employees may be full-time, part-time, temporary, or seasonal employees.

Accrual Method or Annual Grant (Up-front Method)

Employers may choose to use the accrual method or the annual grant method. The Annual Grant method allows covered employees at least three days or 24 hours of paid sick leave at the beginning of each year. Under the Annual Grant method, no accrual or carry-over is required.

Enforcement and Penalties

Among the potential fines and penalties that may be levied is an administrative penalty that is determined by using either the dollar value of paid sick days withheld from the employee multiplied by three or $250, whichever is greater; however, the fine may not exceed $4,000. Moreover, if the violation results in harm to the employee, an additional penalty of $50 per day is applied but may not exceed $4,000.

Employee Handbook

The Healthy Workplace Healthy Family Act of 2014 must be reflected in Employee Handbooks.
Summary of California AB 1522

For your information, we are providing the summary statement of the Act:

“This bill would enact the Healthy Workplaces, Healthy Families Act of 2014 to provide that an employee who, on or after July 1, 2015, works in California for 30 or more days within a year from the commencement of employment is entitled to paid sick days for prescribed purposes, to be accrued at a rate of no less than one hour for every 30 hours worked. An employee would be entitled to use accrued sick days beginning on the 90th day of employment. The bill would authorize an employer to limit an employee’s use of paid sick days to 24 hours or 3 days in each year of employment. The bill would prohibit an employer from discriminating or retaliating against an employee who requests paid sick days. The bill would require employers to satisfy specified posting and notice and recordkeeping requirements. The bill would define terms for those purposes.”

For more information, go to: http://www.dir.ca.gov/dlse/ab1522.html

Employers Sample Sick Pay Plan Letters

Following this article are two sample sick pay plan letters, one that applies to the Accrual Method and one that applies to the Annual Grant or Up-front Method. Each employee should sign the appropriate letter for inclusion in their employee file.

Questions?

Please call me at (310) 894-9244 or email me at mike@wkacctax.com if you have any questions or concerns. I am available to help.

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Employers Sample Sick Pay Plan Letter — Accrual Method (Option 1)

Effective July 1, 2015, under California law, all employees of [COMPANY], including part-time and temporary employees who have worked for more than 90 days, are eligible for up to three (3) days of sick pay benefits each year, beginning on the first day of employment, and continuing every anniversary date thereafter. Benefits accrue at the rate of one (1) hour per 30 hours worked, but may only be claimed after 90 days of employment.

The maximum hours of sick pay that may accrue in a year are 24 hours. Although up to six (6) days of benefits may be carried over, you are only entitled to use three (3) days of paid sick leave in a 12-month period, commencing on your hire/anniversary date.

The benefits are available to cover time taken for the diagnosis, care, or treatment of an existing health condition, to cover preventive care for yourself or a family member (e.g., spouse, registered domestic partner, child, parent, sibling, grandparent), or for specified purposes for an employee who is a victim of domestic violence, sexual assault, or stalking. Sick leave may not be used for vacation or personal time off. The company may require verification of illness from a physician.

The benefits may be claimed for partial or full days (minimum two (2) hours). You will not be compensated for unused sick days if you are no longer employed by [COMPANY].

Signed
Employee: _____________________________________ Date: _____________________
Employer: _____________________________________ Date: _____________________
Effective/anniversary date: _____________________________________________________

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Employers Sample Sick Pay Plan Letter — Up-front Method (Option 2)

The benefits may be claimed for partial or full 8-hour days (minimum two (2) hours). This benefit does not accrue and cannot be carried over from one year to the next. An employee will not be compensated for unused sick days at the end of the year or if the employee is no longer employed by [COMPANY].