On October 4, 2023, California Governor Gavin Newsom signed Senate Bill 616, which amends California’s existing paid sick leave law to increase the amount of sick leave all employers must provide to employees from 24 hours or three days to 40 hours or five days. As California paid sick leave is complex and exacting, we have detailed the important points employers must know about the new law, which will go into effect on January 1, 2024:
1) The new law expands accrual requirements.
Since the enactment of the Healthy Workplaces, Healthy Families Act of 2014, all California employees (including full-time, part-time and temporary employees) are entitled to paid sick time if they work for the same employer for 30 or more days within a year from commencement of employment. The Act excludes specific groups of employees, such as employees covered by a valid collective bargaining agreement. Employees accrue one hour of paid sick leave for every 30 hours worked. Employers can use a different accrual method as long as the employee has 24 hours or three days of accrued sick leave or paid time off by the 120th day of employment, each calendar year, or in each 12-month period. The new law expands this requirement by adding that the employee also must have no less than 40 hours or five days of accrued sick leave or paid time off by the 200th calendar day of employment, each calendar year, or in each 12-month period. In addition, employers currently may satisfy accrual requirements by giving employees 24 hours or three days of paid sick leave up front to use by the employee’s 120th calendar day of employment. Senate Bill 616 adds that employers must also give employees 40 hours or five days of paid sick leave to use by the employee’s 200th day of employment.
2) Annual usage limits are increased.
Senate Bill 616 raises the limit an employer may place on an employee’s use of accrued paid sick days in each year of employment, calendar year, or 12-month period from 24 hours or three days to 40 hours or five days. Employees who work other than eight hour days must receive 40 hours or five days, whichever is more. Existing law provides that employees may use accrued paid sick time starting on the 90th day of employment.
3) The new law increases the amount of sick time carried over from one year to the next.
Under existing law, 48 hours or six days of accrued sick days may be carried over to the following year of employment. Senate Bill 616 increases the total amount of paid sick leave that employees must be permitted to carry over to 80 hours or ten days. No carryover is required, however, if the employer provides the employee with the full amount of leave (i.e., 40 hours or five days as of January 1) at the beginning of each year of employment, calendar year, or 12-month period.
4) Employers do not have to provide additional paid sick days if they have a paid leave policy that meets certain requirements set forth in the statute.
An employer does not have to provide additional paid sick days if it has a paid leave policy or paid time off policy, gives employees an amount of leave that can be used for the same purposes and under the same conditions as California law, and satisfies one of three conditions set forth in the statute: (1) complies with the accrual, carryover, and use requirements set forth in the statute; (2) provided paid sick leave or paid time off to a class of employees before January 1, 2015 on a regular basis, so that an employee, including one hired after January 1, 2015, is eligible to earn at least 40 hours or five days of sick leave or paid time off within six months of employment; or (3) sick leave benefits or annual leave benefits are provided pursuant to certain sections of the Government Code or by provisions of a memorandum of understanding reached pursuant to Section 3517.5 that incorporate or supersede certain provisions of the Government Code. In addition, an employer may satisfy the law with a lump paid time off policy rather than a separate sick leave policy, but in that case, all of the paid time off is subject to the rules and requirements of the paid sick leave law (e.g., accrual, usage, carryover, etc.).
5) Certain provisions of the law preempt local ordinances.
Senate Bill 616 states that the following provisions of the law will preempt local ordinances: (1) an employer is not required to compensate an employee for accrued, unused paid sick days at the time of separation, unless the employee is rehired within one year from the date of separation; (2) employers may lend paid sick days in advance of accrual; (3) employers must provide written notice of paid sick time on an itemized wage statement or in a separate writing; (4) employers must calculate paid sick time using one of the methods set forth in the statute; (5) employees must provide advance notification of sick time if it’s foreseeable, but if not foreseeable, then employees must provide notice as soon as practicable; and (6) employers must provide payment for sick leave taken no later than the payday for the next regular payroll period after sick leave taken.
6) Certain procedural and anti-retaliation requirements are extended to employees covered by a collective bargaining agreement.
Employees covered by a valid collective bargaining agreement, which provides for paid sick days or a paid leave policy permitting the use of sick days, are excluded from California’s paid sick leave law. Senate Bill 616, however, extends certain provisions of the sick leave law to employees covered by collective bargaining agreements.
In light of these amendments to California’s paid sick leave statute, California employers should review and revise their sick leave policies, including references to paid sick leave in Employee Handbooks before year end. In addition, California employers need to revise California Labor Code 2810.5 required notices to reflect the new paid sick leave requirements and provide such revised notices to employees and new hires within seven days of the change unless the change is reflected on a wage statement. NFC will continue to track this law and report on any updates.
If you need assistance complying with this new law or have any questions on sick leave requirements in California or other jurisdictions, please reach out to the NFC Attorney with whom you typically work or call us at 619-292-0515.