Healthy Workplace, Healthy Family Act of 2014: Mandatory Sick Time Becomes Effective July 1, 2015

As of July 1, 2015, AB 1522, better known as “Healthy Workplace, Healthy Family Act of 2014,” requires that employers provide at least three paid sick days per year (24 hours) to employees. This bill applies to full-time, part-time, and temporary employees; it also applies to non-exempt and exempt employees, and to businesses small and large (with the exception of 4 limited statutory exceptions: (1) employees covered by a valid collective bargaining agreement that provides paid leave and has other required provisions; (2) employees in the "construction industry" covered by a valid collective bargaining agreement; (3) providers of in-home supportive services; and (4) individuals employed by an air carrier as a flight deck or cabin crew member (provided they receive compensated time off).

If an employer already provides Paid Time Off (PTO) benefits of at least 24 hours (3 days) annually, and that PTO plan complies with the other mandates of this new law, then nothing more needs to be done for those already-covered employees (but remember that part-timers and temporary employees are now covered).

If an employee works in California for 30 or more days within a year, the employee is entitled to paid sick days accrued at a rate of no less than one hour for every 30 hours worked, beginning with the first day of employment. Accrual of paid sick days may be capped at 24 hours or 3 days in each year of employment, and an employee can be prohibited from using accrued sick days until the employee has completed the 90th day of employment.

Accrued sick leave may carry over from year-to-year, but, “An employer has no obligation . . . to allow an employee’s total accrual of paid sick leave to exceed 48 hours or 6 days, provided that an employee’s rights to accrue and use paid sick leave under this section are not otherwise limited.” Conversely, the new law provides that “no accrual or carry over is required if the full amount of leave is received at the beginning of each year.” So, what does this mean? Here are two examples:

  • Company X provides eligible employees with 24 hours (3 days) of fully vested sick leave time on January 1st of each year. No accrual or carry over is required.
  • Company Y provides eligible employees with one hour of sick leave time for every 30 hours worked, capped at 24 hours (3 days) annually. Company Y must allow accrued but unused sick leave time to carry over from year to year. However, Company Y may implement an accrual “cap” that once eligible employees have accumulated 48 hours (6 days) of accrued but unused sick leave time, those employees will stop accruing further sick leave time until they have taken enough sick leave to bring them back below the accrual cap.

Some other important points:

  • Exempt employees are deemed to work 40 hours per workweek for accrual purposes unless the employee’s normal workweek is less than 40 hours, in which case the employee shall accrue paid sick days based upon that normal workweek.
  • If an employee separates from employment and is later rehired within one year from the date of separation, previously accrued and unused paid sick days must be reinstated.
  • Employers may advance sick leave to employees if they wish (this should be thoroughly documented).
  • Employers must provide employees with a written notice that sets forth the amount of paid sick/PTO leave available. This can be done on the wage statement or in a separate writing, but it must be given to the employees on their designated pay days.
  • The employer may set a reasonable minimum increment for use of paid sick leave; this minimum may not be more than two hours.
  • Sick leave is paid to an employee at the employee’s hourly wage rate. Employees with varying rates of pay are entitled to paid sick leave at a blended rate: “If the employee in the 90 days of employment before taking accrued sick leave had different hourly pay rates, was paid by commission or piece rate, or was a nonexempt salaried employee, then the rate of pay shall be calculated by dividing the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment.”
  • Payment for sick leave taken by an employee must be made no later than the payday for the next regular payroll period after the sick leave was taken.
  • Sick leave can be taken for the following reasons:
    • Diagnosis, care, or treatment of an existing health condition of, or preventive care for, an employee or an employee’s family member (the definition of family member is very broad). Note that this expands the Kin Care rules already in effect so that an employee can now use all three days.
    • For an employee who is a victim of domestic violence, sexual assault, or stalking, the purposes described in subdivision © of Section 230 and subdivision (a) of Section 230.1.
  • Employers cannot require sick employees to find coverage or a replacement worker as a condition of using paid sick days.
  • Employers are prohibited from discriminating or retaliating against any employee who requests paid sick days and requires employers to satisfy specified posting and notice and recordkeeping requirements.
  • Employers must display a poster in a conspicuous place that denotes that an employee is entitled to accrue, request, and use paid sick days; the amount of sick days required by the law and the terms of use of paid sick days. The Labor Commission has been tasked with creating this poster.
  • Employers must keep records related to sick leave for at least three years, documenting the hours worked and paid sick days accrued and used by an employee. Failure to properly document this will result in a presumption that the employee is entitled to the maximum number of hours accruable under the law.
  • Employers must provide a notice at time of hiring, “That an employee: may accrue and use sick leave; has a right to request and use accrued paid sick leave; may not be terminated or retaliated against for using or requesting the use of accrued paid sick leave; and has the right to file a complaint against an employer who retaliates.” This should be added to the Wage Theft Prevention form handed out at the beginning of employment. The Labor Commission will provide a form that includes this language.
  • Note that unlike PTO or vacation, the law does not require an employer to pay out unused sick time at the time of departure from employment (for any reason).
  • There are steep penalties for failure to comply and willful violation of these laws.

For questions regarding mandatory sick time, or any other employment law issue, contact any of our employment attorneys at LightGabler.