On September 10, 2014, Governor Brown signed into law the “Healthy Workplaces, Healthy Families Act of 2014.”
The HWHFA is meant to provide protection to California employees to ensure, among other things, that they are able to address their own health needs and those of their families.
This new law took effect January 1, 2015 and requires California employers to provide paid sick leave benefits to their employees beginning July 1, 2015.
Read on for some important guidance and clarifications.
HOUSEKEEPING
Employers in California will need to carefully review their sick leave or paid time off policies and practices, as well as revise payroll and wage statement practices regarding such time off. The law also requires:
- Changes to the employer’s new-hire employee notice
- Displaying a poster addressing employees’ rights for mandatory sick time pay
- Recordkeeping for a period of 3 years
EFFECTIVE DATES
The new law, and all of its provisions – including the qualifying periods that determine which employees are eligible for paid sick leave and the employee notice required by Labor Code 2810.5 – took effect January 1, 2015. The only exceptions involve the employee’s right to accrue and take sick leave under the law. These provisions take effect July 1, 2015.
The different effective dates result from the general effective dates of new legislation (on January 1 following enactment of the law) and the particular way the new law was drafter, making some of its provisions operative on July 1, 2015. *
QUALIFIED EMPLOYEES
All California employees are covered by the new law, including part-time, per diem, and temporary employees, even those employed by staffing agencies. Those who work “for an employer on or after January 1, 2015, for at least 30 days within a year in California and by satisfying a 90 day employment period (which works like a probationary period) before an employee can actually take any sick leave” are eligible to accrue paid sick leave.*
The only exceptions are providers of publicly funded In-Home Supportive Services (IHSS) (though Assembly Member Gonzales introduced AB-11 to remove this exception); employees covered by collective bargaining agreements with specified provisions; and individuals employed by an air carrier as a flight desk or cabin crew member, if they receive compensated time off at least equivalent to the requirements of the new law. *
HOW MUCH?
Starting July 1, employees will earn no less than one hour of paid leave for every 30 hours worked, which would work out to a little more than eight days a year for someone who works full time (if an employer chooses not to impose a cap of 48 hours [6 days] as permitted by the law). But employers can impose a limit of 24 hours (3 days) on the amount of annual paid sick leave that an employee can take.
USE LUMP SUM GRANT METHODS
If an employer chooses to implement a lump sum grant method (as opposed to an accrual method), the full amount of accrued leave (no less than 24 hours or 3 days) must be available to a Qualified Employee at the beginning of the 12 month period. This would seem to mean that for Qualified Employees, as of July 1, the full 3 days/24 hours must be available for their use.
LEAVE YEAR MEASUREMENT
The 12 month period begins July 1, 2015 for those employed on that date, and may be tracked by anniversary date for those hired after July 1, 2015. Nothing precludes an employer from switching to a calendar year after the first partial year of employment. But beware that if an employer does switch to a calendar year method, then it still must grant the full three days (or 24 hours) of sick leave during the first partial year of employment.
UNLIMITED TIME OFF?
Not anymore…At least not when it comes to CA Paid Sick Leave. According to the Labor Commissioner, the new law requires that employers separately track sick leave accrual and use (and, if follows, comply with all other notice and posting requirements of the law).*
TIMING OF PAYMENT
No later than the payday for the next regular payroll period after the sick leave was taken; but an employer can adjust the pay for the same payroll period in which the leave was taken if it wishes. For example, if the employee did not clock in for a shift and therefore was not paid for it but utilized paid sick leave, then the employer would have to pay not later than the following pay period and account for it in the wage stub or separate itemized wage statement for that following regular pay period.
RATE OF PAY
The employee’s regular hourly rate. Rates of pay for employees with fluctuating pay (e.g. commission or piece rate) are calculated by dividing total compensation for the previous 90 days by the number of hours worked.*
DOCUMENT SHOWING AVAILABLE PAID SICK LEAVE CAN BE ELECTRONIC (MAYBE)
Employers must show, on the pay stub or a document issued the same day as the employee’s paycheck, how many days of sick leave the employee has available. Employers also must keep records showing how many hours an employee has earned and used for three years. The LC states that “[t]his information may be stored on documents available to employees electronically,” which leaves the question open as to whether this statement qualifies the paystub notice requirement, the recordkeeping requirement, or both. As we’ve noted previously, a reasonable interpretation of the statute is that as long as the information is provided to the employee on the same day as the employee’s paycheck, and in writing, providing that information electronically should comply with the law.
MEDICAL DOCUMENTATION/CERTIFICATION
The LC did not mention whether the employer can require documentation or certification that the leave was taken for a qualifying reason.
NOTIFY EMPLOYEES
As previously noted, you must post the template poster (or one containing the requisite information) by January 1, 2015.
You must also use the revised Wage Theft Notice to Employee Form for employees hired after January 1, 2015, and when any information on the form changes as to existing employees, in accordance with Labor Code section 2810.5. You can even start using it before January 1, 2015 if you want! The LC states that use of the revised form prior to January 1, 2015, will be deemed compliant with the new requirement as of January 1, 2015.
The LC encourages employers to notify employees of any specific policy that provides for any additional paid sick leave, and to check the box, on the revised template Wage Theft Notice, to inform an employee that the employer’s own policy meets or exceeds the requirements of the new law.
We’ll continue to keep you posted as to any new developments.
Worried you’re not compliant? Get in touch with us!
*An amendment to various provisions of the HWHFA is currently being proposed under AB304.