In December, California Labor Commissioner’s Office presented employers with three “holiday gifts”: (1) an updated Paid Sick Leave (“PSL”) poster; (2) an updated 2810.5 employee notice; and (3) updated and heavily revised California PSL FAQs. Our previous legal update on S.B. 616 can be found here.
Effective January 1, 2024, all employers in California are required to post the updated PSL poster, and to use the updated 2810.5 employee notice (Wage Theft Prevention Notice).
The Labor Commission also issued updated PSL FAQs, posted here. On January 1, 2024 – almost all California employers (with very limited exceptions) are required to provide increased PSL to their employees. To assist employers in getting compliant, below is a short summary of five key FAQ highlights:
FAQ No. 2. “What does 40 hours or five days mean?”
On January 1, 2024, S.B. 616 will define the legal term “full amount of leave” as 40 hours or five days (not 24 hours or three days). This FAQ reminds employers that they must provide employees with the greater of 40 hours or five days. The Labor Commission provides two illustrative examples, “… if an employee works 10‑hour days, the employee will be entitled to use at a minimum 50 hours of paid sick leave… [a]lternatively, if an employee works only 6 hours a day and takes five days of paid sick leave, for a total of 30 hours, the employee will still have 10 hours remaining.”
FAQ No. 3: “What if a local ordinance requires an employer to provide more paid sick leave than state law?”
Always check the applicable local rules. Remember, the general rule of thumb is that whatever will most benefit the employees is the rule that controls. Echoing that sentiment, the FAQ notes, “…The employer must provide the paid sick leave required by the local ordinance if it is higher than the requirements of state law.”
Recall that S.B. 616 has limited preemption over the following six categories, “… the lending of paid sick leave, paystub statements, calculation of paid sick leave, providing notice if the leave is foreseeable, timing of payment of paid sick leave, and whether payment of sick leave is required upon termination.”
FAQ No. 12: “What is an accrual policy?”
There are two accrual rates suggested by the revised PSL legislation: one hour of PSL for every 30 hours worked, or an alternative accrual that results in accrual of 24 PSL hours by calendar day 120 and 40 PSL hours by calendar day 200. Due to very poorly-drafted language in Labor Code Section 246(b)(1)-(4), there has been a question as to whether the legislature intended that these should be considered alternative options, or whether all accrual policies require an employer to meet the 120/200 standard.
Just yesterday, the Labor Commissioner confirmed LightGabler’s position that the enhanced accrual rates required at day 120 and day 200 apply only to an alternative accrual method selected by the employer (not the standard 1:30 accrual rate). The Labor Commissioner’s email to LightGabler stated, “The 120- and 200-day rule only applies if a different accrual method is used other than 1 hour of paid sick leave per every 30 hours worked.” This statement by the Labor Commissioner aligns with FAQ No. 12, which reads, “… In general terms … employees under an accrual plan must earn at least one hour of paid sick leave for each 30 hours of work (the 1:30 schedule). Although employers may adopt or keep other types of accrual schedules, the schedule must result in an employee having at least 24 hours of accrued sick leave or paid time off by the 120th calendar day of employment and 40 hours by the 200th calendar day of employment.”
FAQs No. 15: “If an employer uses an accrual method and capped an employee’s yearly use of leave at 3 days or 24 hours, what must an employer do to comply with the law on January 1, 2024?” and FAQ No. 16: “If an employer utilized the ‘up-front’ method prior to January 1, 2024 and provided an employee with 3 days or 24 hours of leave on the employee’s anniversary date during the year, what must an employer do to comply with the law on January 1, 2024?”
These two questions address what employers must do with their current PSL plans to be compliant under S.B. 616 as of January 1, 2024.
If an employer uses the accrual method with an annual start date other than January 1, then the use and accrual caps must be increased as of January 1, 2024. The Labor Commission gives the following example, “if an employer uses the 12-month period of May 1 - April 30 and implements a cap and an employee used 24 hours or three days before January 1, 2024, the employer must allow the employee to use an additional 2 days or 16 hours before April 30 if the employee has accrued that additional leave.”
If an employer uses the frontload method, the employer has two options: (1) “frontload the two additional days on January 1, 2024…” or (2) “…move the measurement of the yearly period to January 1, 2024 and frontload five days.” The Labor Commission provides the following example, “… if an employee started on May 1, 2021 and the employer used that anniversary date to frontload 3 days or 24 hours on May 1, 2023, the employer may either provide 2 days or 16 hours on January 1, 2024 and keep the May 1 date to frontload or can ‘reset’ the frontload date to January 1, 2024 and provide the employee 5 days or 40 hours then.”
Be sure you have posted the new PSL poster and implemented the new 2810.5 Notice to Employee as of January 1, 2024 (and watch for the March 1, 2024 update). Second, read the full set of Labor Commission FAQs. This legal update covers only five of the 34 FAQs issued by the DLSE. Lastly, update your employee handbooks and PSL policies for S.B. 616 compliance effective January 1, 2024.
For questions regarding paid sick leave, or assistance with other employment law issues, contact the attorneys at LightGabler.For questions regarding reimbursement of employee expenses, or assistance with other employment law issues, contact the attorneys at LightGabler.
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