Bill Gives Employers Greater Options, Changes to Take Immediate Effect

The rules for mandatory Paid Sick Leave (“PSL”) in California have once again changed. Yesterday, Governor Brown signed into law AB 304, a bill to amend the Healthy Workplaces, Healthy Families Act of 2014, less than two weeks after the original PSL law went into full effect. The bill passed both houses of the Legislature with no votes in opposition. Recognizing the difficulty employers and others were encountering to understand the requirements of the original law and to create paid sick leave programs that satisfied those requirements, AB 304 was passed as an “urgency statute” that takes effect immediately. Employers need to be aware that AB 304 may require (or permit) revisions to employer policies and procedures.

SHLC will discuss the impact of these amendments and other PSL issues in a special noon-time webinar on August 19, 2015 (12pm PDT).

Here are some of the key amendments made by AB 304:

– Employees must work for the same employer for 30 days within a year of employment to be eligible for PSL.
– Employers may use an accrual method different from the original requirement of one (1) hour of PSL for every 30 hours worked, so long as the accrual is on a “regular basis” and the employee has accrued at least 24 hours of PSL by the 120th calendar day of employment or each calendar year, or in each 12-month period.
– An employer may also provide at least 24 hours or three (3) days of PSL for the employee’s use by the completion of the 120th calendar day of employment.
– Certain existing PSL or paid time-off (“PTO”) policies will satisfy the PSL law, including a program in place before January 1, 2015 where leave is accrued on a regular basis and affords an employee one (1) day or eight (8) hours of PSL/PTO within three (3) months and (3) days or 24 hours of PSL/PTO within nine (9) months of employment. Please note that if the PSL/PTO policy is modified, other than increasing the accrual amounts or rates, the policy must comply with one of the PSL options specified in Section 246(b) (i.e., an approved accrual method or the lump sum method).Employers that provide unlimited PSL or PTO may state “unlimited” on an employee’s wage statement or check stub to indicate the amount of leave available.
– Methods describing how compensation for PSL may be calculated are specified:
(1) For non-exempt employees, either: Using a “regular rate of pay” calculation for the workweek in which the PSL is taken or dividing total wages by total hours worked in full pay periods in the prior 90 days (excluding overtime premium pay).
(2) For exempt employees, the same method for calculating wages for other paid leave may be used.
– Employers are not required to “inquire into or record the purposes for which an employee uses [PSL] or [PTO].”

Employer policies that tracked the language of the original PSL law may no longer reflect the language of the PSL law as amended by AB 304; therefore, we recommend employers review and update their policies accordingly. Other aspects of the original PSL law remain relatively unchanged, including the broad scope of covered employees, reasons for use, carry-over and reinstatement of unused PSL, record keeping and retention, anti-retaliation and interference provisions, and penalties.

Advice to Employers

Employers should evaluate their PSL/PTO policies for compliance with the PSL amendments, even if the policy was recently updated to comply with the original PSL law. Please consult with qualified legal counsel before making changes to a PSL/PTO policy. Changes to the methods of accrual and compensation calculation or use of an existing PSL/PTO policy under the “grandfather” provision should be given close attention. Employers are reminded that generally they must provide notice to the employee within seven (7) days of any changes to their policies. A revised Notice to Employees is available at: https://www.dir.ca.gov/dlse/LC_2810.5_Notice.pdf.

Further PSL Information

The text of AB 304 that shows the amendments made to the original PSL law can be found here:  https://leginfo.legislature.ca.gov/faces/billCompareClient.xhtml?bill_id=201520160AB304.

Please visit https://suttonhague.com/california-paid-sick-leave-law-may-webinar-highlights/ to see the highlights from Sutton Hague Law Corporation’s May Webinar discussing the original PSL law with Deputy Labor Commissioner Steve Jones.

SHLC will discuss the impact of these amendments and other PSL issues in a special noon-time webinar on August 19, 2015 (12pm PDT). You can Click Here to register.