Are you tired of employmSacramentoent lawyers’ obnoxious headlines asking if you are sick over California’s paid sick leave law yet?  I’ll spare you the play on words and get to some of the major amendments to California’s paid sick leave law, which took effect immediately upon the Governor’s signature of AB 304 on July 13, 2015.  Therefore, the amendments apply to employers going forward.  For today’s Friday’s Five, here is a summary of five of the major amendments employers should note:

1.      Employers may now use a different accrual method other than one hour of paid sick leave for every 30 hours worked.

In order to simplify the math for employers, the law was amended to provide that an employer may use an alternative accrual method as long as it is (1) on a regular basis, and (2) the employee has no less than 24 hours or three days paid sick leave or paid time off by the 120th calendar day of employment, or each calendar year, or in each 12-month period.

2.      If an employer pays out accrued paid time off to an employee at time of termination, the employer does not have to reinstate the previously accrued and unused paid sick days.

The law requires that if an employee separates from employment, but is rehired within one year, the previously accrued and unused paid sick leave must be reinstated.  This amendment clarifies that if the employer pays the accrued but unused sick leave out at the time of separation (which is not required under the sick leave law), then the employee is not entitled to reinstatement of the paid sick leave that was already paid out to them earlier.

3.      If an employer provides unlimited paid sick leave or unlimited paid time off to an employee, the employer meets its reporting requirements on the employee’s pay stub by indicating “unlimited” on the wage statement. 

4.      Employers have different options for calculating the amount of pay owed to employees while taking sick leave.

The amendment clarifies that the employer can use any of the following calculations when determining how much to pay employees while on paid sick leave:

a) For non-exempt employees, the regular rate of pay can be calculated in the same manner as the regular rate of pay for overtime purposes in the workweek.  This is a new option for employers provided under the amendment.

b) For non-exempt employees, the regular rate of pay can be calculated 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.  This method was permitted for employers to use under the original law.

c) For exempt employees, employers can calculate paid sick leave in the same manner as the employer calculates wages for other forms of paid leave time.

5.      Employers are not required to inquire into or record the purpose of why the employee uses paid leave.

Employers have many other record keeping requirements under the new law, but now it is clear that they are not required to maintain the reasons why employees used the sick leave.  The original requirement created under the paid sick leave law, and unchanged by these amendments, requires employers to document and keep records of the hours worked and paid sick days accrued and used by an employee for at least three years. Employees (as well as the Labor Commissioner) have the right to access these records. Failure to keep the required records creates a presumption against the employer that the employee is entitled to the maximum number of hours provided for under the law.

Photo: Franco Folini