UncategorizedCalifornia’s New Sick Leave Laws Expose Unprepared Employers to Significant Administrative Penalties and Legal Liability

April 30, 2015

On July 1, 2015, all employees in California will begin accruing paid sick leave under the state’s new “Healthy Workplaces, Healthy Families Act” (California Labor Code Sections 245-249). Under this new law, employees will be entitled to one hour of paid sick leave for every thirty hours of work. As employees accrue these hours of paid sick leave, employers are required to accurately record and report the accrued hours. Employers are also required to allow employees to rollover a significant amount of unused sick leave for use in later years.

Unlike other California and Federal laws regulating medical leave, the new “Healthy Workplaces” Act will apply to nearly all employers in California. While current family medical leave laws typically don’t apply to a business unless it employs at least fifty employees, the new HWHFA contains no such restrictions. Similarly, under this new law, employees are entitled to the use of their accrued paid sick days after just ninety days – compared to existing laws that typically don’t apply until an employee has been on the job for at least one year. As a result, a significant number of California businesses will now face a level of legal responsibility (and liability) that they have not previously encountered.

The new paid sick leave law does not simply set a floor for the minimum paid time off. It is a complex law that contains a number of pitfalls and traps that could potentially result in an employer unwittingly violating California law and becoming exposed to substantial risk and liability.

For example, an employer can set a “reasonable minimum increment” for the use of paid sick leave, but that minimum cannot exceed two hours. So, if an employee asks to take four hours off for a doctor’s appointment and her supervisor tells her to take off the entire day (with pay), the employer could be violating this new law. Similarly, under this new law, an employer is prohibited from asking an employee to “search for or find a replacement worker to cover the days during which the employee uses the paid sick days.” So if a waiter asks for two hours off at the end of a shift at a restaurant in order to take his sister to see the doctor, his employer might inadvertently violate this law if his supervisor asks him to check if any of his co-workers can cover the shift.

Finally, employers will be required to accurately report information related to accrued sick days on pay stubs and wage statements that it provides to its employees, and will similarly be required to report when an employee had been paid for a sick day. An employer that fails to accurately do so could be facing stiff penalties costing thousands of dollars per employee. The law also requires other administrative changes, including to HR handbooks and new employee hire packets. An employer that fails to meet these administrative requirements will face not just significant penalties, but may also risk significant financial exposure to employees suing under California’s Private Attorneys General Act (“PAGA”).

While many of the new law’s provisions, such as the requirement to post the appropriate poster in the workplace by January 1, 2015 and the requirement to provide existing employees with written notice of their new rights no later than July 8, 2015 are mandatory, the act does allow employers to offer alternatives, such as an automatic award of 24 hours or 3 days sick leave every 12 months, in order to tailor compliance to a specific business need. Whether you manage your payroll and human resources in-house or with the assistance of outside professionals, it is critical that you review your HR guidebooks, employee handbooks, new hire policies, timekeeping systems, and paystub information in order to ensure that you are fully compliant with this new law. If you have questions about the new law or any aspect of compliance, please feel free to contact Smith LC to arrange a consultation.


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