As employers across the state worked to amend policies and procedures in preparation for California’s paid sick leave law, questions were raised about ambiguities and hurdles to implementation. The California State Legislature responded this spring with Assembly Bill 304, hoping to amend the sections of the law that were unclear or unnecessarily onerous. Earlier this week, the bill cleared the final legislative hurdles and was signed by Governor Brown. It is effective immediately.
The good news for household employers is that if you have already ensured that your sick leave policy complies with the original law, these California paid sick leave law amendments likely will not require you to revise your policy. If you are still working on getting your policy in place, or if you would like to make changes to your current compliant policy, you will now have a few more options in some key areas.
Let’s look at a few of the changes:
- Alternative accrual methods are now offered, including allowing an employer to use an accrual method other than the 1 hour for each 30 worked, provided that the accrual is on a regular basis and that an employee will have at least 24 hours of accrued sick leave or paid time off (PTO) by the 120th calendar day of employment, of each calendar year, or of each 12-month period. This provision will be especially helpful for employers who would prefer to have employees accrue time per week, per pay period, or per month rather than per hour worked.
- While the original sick leave law referred in many places only to the “employment year,” AB 304 makes it clear that employers may use the employment year (anniversary date), calendar year, or other 12 month period as the “year” for purposes of tracking and limiting the amount of leave an employee can accrue, use, and rollover.
- If an employer provides unlimited paid sick leave or unlimited paid time off, the employer may note “unlimited” on the employee’s itemized wage statement. This notation satisfies the requirement that an employer provide written notice of available sick time or paid time off.
- An employer is under no requirement to inquire into or record the purpose for which an employee uses sick leave or PTO. This will make tracking leave easier for employers who have combined sick leave and vacation leave into one PTO bank.
- Two additional methods were added for determining at what rate the sick time should be paid. An employer may now calculate paid sick leave using any of the following calculations: 1) for exempt employees, calculating in the same manner as the employer calculates wages for other forms of leave time; 2) for non-exempt employees, calculating in the same manner as the regular rate of pay for the workweek in which the employee uses paid sick time, whether or not the employee actually works overtime in that workweek; and 3) for non-exempt employees, calculating 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.
- AB 304 clarifies that an employer need not reinstate accrued paid time off to a rehired employee if the time was paid out at the time of termination, resignation, or separation from employment.
The California Labor Commission is currently working on updating its guidance regarding California sick leave. Their updated FAQs may provide additional clarification on how the provisions of AB 304 should be applied. To see all the changes made by AB 304, the final text can be read here.