California recently enacted the Healthy Workplaces, Healthy Families Act of 2014, which requires virtually all employers to provide paid sick leave benefits to employees. Some employer actions are required by January 1, 2015, and others by July 1, 2015. It's important to start thinking and planning ahead.
What should you do now?
- Post this new poster on or before January 1 (or ensure that your combined poster includes this information):
- Start developing your new policies and procedures, or review your current policies for compliance. We expect that most (if not all) current sick leave and PTO policies will need some modification.
This is a complex and confusing law, and we expect to see continued legal guidance over the coming months. In the meantime, here are some highlights:
What does the law require on July 1?
- Employees who work 30 or more days within a year are entitled to paid sick leave, including part-time and temporary employees. Paid sick leave can be provided as a stand-alone benefit, or as part of a combined PTO (vacation and sick) benefit.
- Paid sick leave accrues at the rate of one hour per every 30 hours worked (including overtime hours). (Exempt employees are generally assumed to work 40 hours per week.) Accruals begin on the first day of employment or July 1, 2015, whichever is later. Employees may begin using accrued days beginning on their 90th day of employment.
- Accrued sick leave may be carried over to the following year, and can be capped at 48 hours (6 days). However, the employer can limit the use of paid sick days to 24 hours (3 days) per year.
- Employers also have the option of "front-loading" at least 24 hours (3 days) of paid leave at the beginning of each year, with no additional requirement for accruals or carry-over.
- The law also provides specific guidelines regarding sick leave usage, employee protections, and record-keeping.
- There is no requirement to pay out accrued sick leave upon termination, unless the employer has a PTO policy that combines sick and vacation time. However, employers must reinstate unused accrued sick leave if a former employee is rehired within one year.
- Of course, employers can provide more generous benefits, as long as they meet all the provisions of this law.
Arrow's HR Division is available to discuss this law with you to explore how it will impact your workplace, and assist in developing policies to ensure you are meeting your legal requirements. Please contact Karen Alary at KarenA@arrowbenefitsgroup.com for more information.