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Employers Must Provide Three Days of Paid Sick Leave Each Year, Starting July 1, 2015

Beginning July 1, 2015, a new law will require California employers to provide virtually all of their employees with at least three days of annual paid sick leave.  Signed by Governor Brown on September 3, 2014, the Healthy Workplaces, Healthy Families Act of 2014 is very broad, applying to both exempt and non-exempt employees who work in California for 30 days or more each year.  Covered employees will accrue sick time at a rate of one hour for every 30 hours worked.

Employers may limit an employee’s use of sick time to 24 hours per year, but accrued sick time carries over to the following year of employment.   Total accrued sick leave time may be capped, however, at 48 hours. Employees are not entitled to compensation for accrued, unused sick time when their employment terminates.

Sick days may be used not only for purposes of diagnosis or treatment of existing health conditions, but also for preventative care, care of family members, and for employees who are victims of domestic violence, sexual assault, or stalking.

While an employer’s existing paid time off policy may fulfill the requirement to provide paid sick days, employers with such policies should not assume they will automatically comply with the new law. The new law adds a number of administrative requirements even for employers that already provide paid sick leave. For example, employers must track each employee’s sick leave accrual and reflect it on his or her wage statements.  Further, the new law requires that employers post a notice of sick leave rights, maintain records of accrued sick leave, and notify each new employee of his or her sick leave rights.

Moreover, the law imposes new administrative and financial burdens on employers that compensate by commission or piece rate.  For employees who receive such compensation, the rate of pay for each employee’s sick leave will vary depending on how much the employee earned in the previous 90 days of employment.

Employers that already provide paid sick leave may need to update or modify their existing policies, even if those policies are more generous than the newly mandated sick leave.  Also, because many employers offer sick leave only to full-time employees, it may be necessary to create a two-tier sick leave benefit to comply with the new law.

Employers should contact their Labor and Employment counsel at Hill Farrer for guidance on how to best prepare for implementation of this new law.