California Expands Mandatory Paid Sick Leave

On October 4, 2023, Governor Newsom signed Senate Bill (SB) 616 authorizing the expansion of California’s Paid Sick Leave law, the Healthy Workers Healthy Families Act of 2014. The new bill includes notable expansions to the amount of protected, paid sick time that must be provided to employees in California, as well as the amount of accrued time they are able to roll over from one year to the next. The new requirements take effect on January 1, 2024.

Background

In 2014, California enacted the Healthy Workplaces, Healthy Families Act of 2014 (“HWHFA”), providing California employees with mandatory paid sick leave. The HWHFA became effective on July 1, 2015.
Under the existing law, eligible employees accrue paid sick days at the rate of one hour per every 30 hours worked, beginning at the commencement of employment. The HWHFA applies to full-time, part-time, and temporary workers who work for the same employer for at least 30 days within a year in California and complete a 90-day employment period before taking any paid sick leave. Upon the oral or written request of an employee, an employer must provide paid sick days for the following purposes:

1. Diagnosis, care, or treatment of an existing health condition of, or preventive care for, an employee or an employee’s family member; and
2. For an employee who is a victim of domestic violence, sexual assault, or stalking.

The HWHFA defines “family member” to include the following:

• A child, meaning a biological, adopted, or foster child, stepchild, legal ward, or a child to whom the employee stands in loco parentis regardless of age or dependency status;
• A parent, meaning a biological, adoptive or foster parent, stepparent or legal guardian of an employee or a person who stood in loco parentis when the employee was a minor child;
• The employee’s spouse or registered domestic partner;
• A grandparent;
• A grandchild;
• A sibling;
• And a designated person, meaning a person identified by the employee at the time the employee requests paid sick days.

An employer may limit an employee to one designated person per 12-month period for paid sick days.

Although these basics remain the same under SB 616, the new law amends various provisions of HWHFA, requiring employers to revise their California paid sick leave policies to ensure compliance.

Accrual and Carryover

Under California law, accrued paid sick days must carry over to the following year and use-it-or-lose-it policies are prohibited. However, California employers may set a threshold accrual cap. Once an employee accumulates an amount of paid sick time that equals the cap amount, they stop accruing. Once an employee uses the sick time and their banked time falls below the cap, they immediately commence accruing leave again. The accrual cap also operates as a cap on the amount of unused leave employees can carry over from one year to the next.

• Current Law: Currently, an employee’s banked, accrued paid leave may be capped at 48 hours or 6 days, whichever is greater.
• New Law: Effective January 1, 2024, the cap increases to 80 hours or 10 days, whichever is greater.

Under SB 616, the default approved accrual formula of 1 hour of paid sick leave accrued for every 30 hours worked by the employee remains unchanged.

Frontloading

The HWHFA allows employers to frontload a specific amount of paid sick leave each year, rather than accruing hours.
• Current Law: Currently, the law requires employers that frontload to provide 24 hours or 3 days, whichever is greater.
• New Law: Effective January 1, 2024, the frontloading requirement increases to 40 hours or 5 days, whichever is greater.

Notably, no accrual or carryover is required if the full amount of leave is received at the beginning of each year of employment, calendar year, or 12-month period (i.e., frontloaded). Effective January 1, 2024, the term “full amount of leave” means five days or 40 hours.

Alternative Accrual Methods

Instead of using the standard accrual rate of 1 hour for every 30 hours worked, employers may use a different accrual method, as long as the method meets certain requirements.

• Current Law: Currently, instead of using the standard accrual rate, the HWHFA allows employers to use a different accrual rate as long as employees accrue leave on a regular basis resulting in them having accrued no less than 24 hours of paid sick leave by the completion of their 120th day of employment and having that same amount by the completion of the 120th day in each subsequent year.
• New Law: Effective January 1, 2024 employees must also have accrued no less than 40 hours (or 5 days) of paid sick leave by the 200th day of employment and that same amount by the 200th day in each subsequent year.

Use Caps

Employers must allow accrued paid sick leave to carry over from year to year. However, an employer may limit the use of paid sick days in each year of employment.

• Current Law: Currently, the HWHFA allows employers to limit employees’ paid sick leave use per year to 24 hours or 3 days, whichever is greater.
• New Law: Effective January 1, 2024, employers may limit employees’ annual use cap to 40 hours or 5 days, whichever is greater.

Employer Takeaway

As the new law goes into effect January 1, 2024, all covered employers should update their Paid Sick Leave policies to reflect the coming changes now. Additionally, employers should ensure they are prepared to implement procedures to comply with the new law, including wage statement compliance. Employers should also take care to update their Wage Theft Prevention Act Notice provided to all new hires (also known as a Labor Code section 2810.5 Notice). The Department of Industrial Relations will provide an updated template to reflect these changes, check the DIR Website HEREfor the release of the update.

If you have any questions about how this new law may affect your business or need assistance preparing compliant policies or revising your practices, please contact your attorneys at Bradley, Gmelich + Wellerstein LLP. We are here to help.

About the Authors

Jaimee K. Wellerstein, Esq. is a Partner and the firm’s Employment Team Head. Representing employers in all aspects of employment law, Ms. Wellerstein collaborates with her clients to develop proactive business and legal strategies to try to avoid workplace conflict and employment disputes. She provides legal advice and counsel to numerous businesses, including conducting individualized training programs for both management and employees. Ms. Wellerstein performs internal audits of her client’s employment practices to ensure compliance with the rapidly changing world of employment laws and guides investigations of employee allegations regarding harassment, discrimination, and employee misconduct.

When litigation cannot be avoided, Jaimee K. Wellerstein aggressively defends her clients against employment law claims in the state and federal courts, as well as at administrative hearings, arbitrations, and mediations. Having defended numerous representative and individual lawsuits on behalf of her clients, Ms. Wellerstein is a skilled litigator and negotiator with a broad spectrum of experience upon which to draw.

A frequent speaker on numerous topics, including employment law and contract law, Ms. Wellerstein regularly conducts training seminars and programs for managers and employees in all areas of employment practices and policies.

Michael J. Bruskin, Esq. is Special Counsel for the firm’s Employment Team Advice & Counsel Practice Group. Advising employers in all aspects of employment law, Mr. Bruskin develops deep relationships and working knowledge of his clients’ operational preferences and devises forward-thinking strategies to align business needs with risk mitigation and legal compliance. Mr. Bruskin performs internal audits of his client’s employment practices to ensure compliance with the rapidly changing world of employment laws and guides their employment and business strategies to create successful and lasting relationships with their employees.