Employers are required to provide sick leave programs based on the states in which they have employees. On October 4, 2023, California Governor Gavin Newsom signed Senate Bill 616 into law, which updated California’s sick leave requirements to provide more sick leave to employees. This expansion of Healthy Workplaces, Healthy Families Act of 2014 (“HWHFA”) will be in effect as of January 1, 2024.
Background
The HWHFA requires employers to provide at least 3 days/24 hours of paid sick leave in a 12-month period to any employee who works in the state of California for 30 or more days (including part time and temporary employees). Employers can designate any 12-month period for compliance purposes.
Currently, employers can provide this sick leave either by frontloading 3 days/24 hours at the beginning of the year or by providing accruals of 3 days/24 hours by the 120th day of employment (typically at a ratio of 1 hour for every 30 hours worked). In addition, employees are currently able to accrue up to 48 hours/6 days per year with all unused time carrying over into the next year. Employers can impose certain limitations on paid sick leave, such as the amount of sick time an employee may use in one year (use cap), and the amount of time an employee may accrue in a year (accrual cap).
The law provides that employees may take paid sick leave for permitted purposes, including a medical need (for themselves, family member or designated person) or for purposes related to domestic violence, sexual assault or stalking.
The Update
Senate Bill 616 expanded the state’s existing paid sick leave mandate (Healthy Workplaces, Healthy Families Act of 2014) to require employers to provide higher caps of paid sick time. The amendment increases the annual amount of CA paid sick leave from 3 days/24 hours to 5 days/40 hours. The accrual cap (minimum amount of time an employee may accrue) has increased from 48 hours to 80 hours. This applies whether an employer chooses to accrue or frontload paid sick leave (PSL).
For employers who choose to accrue outside of the 1:30 method, there are a few requirements:
- Employees must accrue at least 24 hours of PSL by their 120th calendar day of employment AND
- Employees must also accrue another 16 hours (for at least 40 hours total) of PSL by their 200th calendar day of employment.
For each benefit year after an employee’s first year of employment, the employee must accrue at least 40 hours per year and unused time must be carried over to the following year of employment. The amendment increases the current CA maximum accrual cap as well as year-end carryover cap to 80 hours/10 days.
A frontloaded policy would avoid the accrual and carryover requirements, but employers would need to grant 40 hours/5 days upon hire or before their 90th calendar day of employment, and then at the beginning of each subsequent year.
Usage limits may be placed per calendar year at 5 days or 40 hours and there are no changes to documentation requirements. Changes are anticipated to come from across the state: Berkeley, Emeryville, Long Beach, Los Angeles, Oakland, San Diego, San Francisco, Santa Monica, and West Hollywood.
Non-Calendar Year Compliance
Employers may designate any consecutive 12-month period as their “year” for compliance purposes. For those who follow this method, there are certain actions they will need to take. For accrual policies, employers must increase the accrual cap on January 1st from 48 hours or 6 days to 80 hours or 10 days. For frontloaded policies, the upfront allocation will need to increase by either adding the two additional days on January 1st or moving the measurement of the yearly period to January 1st and frontloading the full five days.
Employer Action
Employers with California based employees should review existing sick leave or PTO policies for compliance. For employers with unlimited policies in place, there will be no impact or revisions required.
- Revise/update to include increased caps if necessary;
- Update your staff of policy updates and handbooks, as needed; and
- Provide a new copy of the Notice to Employees required under California’s Wage Theft Protection Act .
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