New California Paid Sick Leave Requirements Go Into Effect January 1
On January 1, 2024, Senate Bill (SB) 616 goes into effect and expands paid sick leave (“PSL”) for almost all California employers and employees. SB 616 amends Labor Code sections 245.5, 246, and 246.5, and increases the minimum required amount of PSL for California employers to 40 hours or 5 days, whichever is more (e.g., if an employee works 10‑hour days, the employee will be entitled to 5 days, or 50 hours of PSL). However, if there is a local ordinance that requires a higher amount of PSL, the employer must comply with the local ordinance.
SB 616 applies to all employees who work at least 30 days for the same employer within a year in California, including part-time, per diem, in-home supportive services providers, and temporary employees, with some narrow exceptions.
In addition to increasing the minimum amount of PSL to 40 hours or 5 days, SB 616 also provides for how employers accrue the PSL. Employers can choose any of the following:
- Employees accrue 1 hour of PSL for every 30 hours worked;
- Employers can “front load” PSL by giving employees an up-front accrual of 40 hours (or 5 days) of PSL at the beginning of employment and each 12 months thereafter; or
- Employees can accrue PSL at a rate other than 1 hour for every 30 hours worked so long as the accrual is regular and results in at least 24 hours (or 3 days) of PSL by the 120th day of employment and 40 hours (or 5 days) of PSL by the 200th day of employment.
The employer can require the employee to work for 90 days before taking PSL, or the employer can choose to advance PSL if not yet accrued.
If employers choose to accrue sick pay instead of front-loading it, employers can impose a maximum accrual cap of 80 hours (or 10 days) of PSL. Employers can restrict employees from using more than 40 hours (or 5 days) per year of the PSL they have accrued.
Employers cannot limit less than 40 hours (or 5 days) of accrued PSL to carry over, i.e., if an employee has 40 hours of unused PSL or more, at least 40 hours must be allowed to carry over to the next 12-month period.
Employers must still provide written notice to employees about the amount of PSL they have available, such as including their current balance on their pay stubs.
Some employer plans existing prior to January 1, 2015 are “grandfathered” into the new law. The “grandfather” clause allows employers with PSL policies or paid time off (“PTO”) policies that existed before January 1, 2015, to maintain those policies and be deemed in compliance as long as they meet the following requirements: (1) the accrual provides no less than 8 hours (or 1 day) of accrued PSL or PTO within three months of employment per year; and, (2) the employee was eligible to earn at least 40 hours (or 5 days) of PSL or PTO within 6 months of employment. The PSL also mandates how the PSL of a grandfathered plan must be paid.
If an employer has a PTO plan that employees may use for the same purposes as PSL, the employer may continue to use that plan instead of a separate PSL plan, so long as it complies with all applicable minimum requirements of SB 616.
The Labor Commissioner has recently updated its FAQs about PSL, which can be accessed here. The FAQs provide guidance on how employers that track PSL using something other than a calendar year can adjust their practices in order to comply with the new law starting January 1.
There is also a new PSL poster that must be posted in a conspicuous place as of January 1, 2024, which can be found here. Covered employers that previously provided less than 40 hours of PSL per year must also provide their non-exempt employees with a new Notice to Employee form, which can be accessed here, and inform the employees of the new PSL accrual by January 1, 2024.
Please contact your favorite CDF attorney if you need assistance with the new PSL requirements.