California’s DLSE Issues Updated FAQ on Paid Sick Leave
As California employers know, California enacted a paid sick leave law that took effect this year and required that employees start accruing paid sick leave July 1, 2015. Later in July, California’s Governor signed urgency legislation amending the paid sick leave law. Those amendments did not change a whole lot, but did make some changes, including (1) a change to the rate of pay for use of sick leave by non-exempt employees who are compensated based on more than one hourly rate of pay and/or who have compensation in addition to their regular hourly rate; (2) clarification that an employee must work at least 30 days in California for the same employer in order to be eligible for paid sick leave; (3) clarification that an employer who uses an accrual method for providing sick leave to employees may use an accrual rate other than one hour for every 30 hours worked, so long as employees will have at least 24 hours of accrued sick leave available by the 120th day of employment; (4) the addition of an exemption from the law for retired annuitants of a public entity; and (5) clarification that unlimited paid time off policies satisfy the requirements of the law.
The DLSE has now updated its Frequently Asked Questions on California’s paid sick leave law. The DLSE states that the update was intended to incorporate the recent amendments to the law and also to provide responses to questions that members of the public have submitted to the DLSE concerning paid sick leave requirements. The updated FAQ are here. For the most part, the updated guidance simply incorporates the amendments to the paid sick leave law. In some areas, this guidance is confusing and hard to follow, particularly on the subject of pre-existing plans that may be grandfathered compared to new plans that use an accrual method other than one hour for every 30 hours worked. Employers should simply focus on making sure that they have current paid sick leave and/or paid time off policies that either frontload at least 24 hours or 3 days (whichever is greater) of paid time off and/or that allow employees to accrue paid sick leave or paid time off at a rate of one hour for every 30 hours worked (or some other accrual rate that ensures that all employees have at least 24 hours of paid leave available by the 120th day of employment). The easiest way to comply is to use the frontload method and simply give all employees 24 hours of paid sick leave up front at the beginning of each year (year beginning July 1, 2015, or anniversary year, or calendar year). If you have employees who work a formal alternative workweek schedule of more than 8 hours per day (e.g. 9 hours per day or 10 hours per day), then give them 3 days of leave up front (27 hours or 30 hours as the case may be). If you have non-exempt employees who have more than one hourly rate of pay and/or who earn other forms of compensation in addition to their hourly pay, then make sure you review the permissible methods for calculating the pay for sick leave, as described in the DLSE FAQ.
Unfortunately, the updated FAQ still leave many questions unanswered, including (1) whether an employer can use a calendar method and pro-rate the amount of paid sick leave provided in a frontloaded manner to employees hired at various times during the year; (2) the circumstances under which employers can require a doctor’s note for use of paid sick leave; (3) whether employers generally can require employees to comply with the notice requirements of their call-out policies (e.g. providing at least two hours’ notice prior to the start of the employee’s scheduled shift); (4) whether an employer can allow employees the option of cashing out their paid sick leave during employment in lieu of using it and/or in lieu of carrying it over from year to year (where the employer uses an accrual method); and (5) whether an employee who quits but is rehired within one year is entitled to have previously “accrued” but unused sick leave reinstated only where the employer uses an accrual method for providing sick leave, or ALSO where an employer frontloads the paid sick leave. Cities with local paid sick leave ordinances (such as San Francisco and Oakland) provide guidance on many of these issues, but the guidance under the statewide law is lacking in these areas. If the DLSE issues further guidance, we will post it here.