Employment Client Alert: New California Law Requires Employers to Provide Paid Sick Time Effective July 1, 2015

Governor Edmund G. Brown, Jr. has signed the Healthy Workplaces, Healthy Families Act of 2014 into law, which provides paid sick days to nearly 40 percent of California’s workforce. This landmark law requires employers to provide at least three paid sick days for an employee who works for seven or more days in a calendar year. This mandated paid sick leave accrues at a rate of at least 1 hour per 30 hours worked beginning at the commencement of employment or upon operation of the new law. The employee’s accrued sick leave can be used beginning on the 90th calendar day of employment for diagnosis, care, or treatment of the employee or a member of the employee’s family.

Although this mandated sick leave carries over into the following calendar year, the employer is authorized to limit the amount of accrued sick leave to 24 hours or three days. The law also does not displace or preempt any existing paid leave policy that meets the minimum accrual requirements. This sick leave is not compensable upon the employee’s termination, but it can be reinstated if the employee resumes employment with the same employer within one year.

Under this new law, employers are required to provide written notice to employees and maintain records for five years documenting an employee’s hours worked and paid sick days accrued. Employers should also be aware that it provides for a rebuttable presumption of unlawful retaliation if an employer denies an employee the right to use paid sick days or takes other specified adverse action within 90 days of the employee engaging in protected activity related to sick leave. While it is unclear whether this new law authorizes a claim for wrongful termination in violation of public policy, the law provides for enforcement by the Labor Commissioner or the Attorney General. The new law authorizes a maximum aggregate penalty per violation up to $4,000.00 for each person whose rights were violated.

This new law expressly excludes employees with collective bargaining agreements providing sick leave and who earn more than 30% more than the minimum wage. The state mandated sick leave also does not apply to construction industry employees that expressly waive the new law pursuant to a collective bargaining agreement if the agreement expressly provides for the wages, hours of work, and working conditions of employees, and premium wage rates for all overtime hours worked.

California is only the second state in the United States to require paid sick leave. Employers are well advised to review their policies to ensure California compliance. Employers who do not have paid sick, vacation or PTO policies, must start providing paid sick leave as of July 1, 2015.

This document is intended to provide you with general information about employment law developments. The contents of this document are not intended to provide specific legal advice. This communication may be considered advertising in some jurisdictions.

September 11, 2014