On July 13, 2015, the Governor signed AB 304, a clean-up bill to the previously enacted AB 1522 – California Healthy Workplaces, Healthy Families Act (HWHF) of 2014. This e-alert summarizes some of the key points of this legislation.
As originally enacted, HWHF provides employees with one hour of sick leave for every 30 days worked, commencing on the 90th day of employment, so long as the employee works for an employer for 30 or more days within a year from the start date of employment. Employers can set an accrual cap of six (6) days or forty-eight (48) hours of leave per year but are also able to limit employees’ use of paid sick days to 24 hours or 3 days per year. Employers can also set a reasonable minimum use increment, not to exceed two (2) hours.
HWHF exempts employees covered by a valid collective bargaining agreement if the agreement provides for (1) paid sick days or paid leave for sick days (2) binding arbitration of disputes about paid sick days (3) premium wage rates for all overtime, and (4) a regular hourly rate of pay of not less than 30 percent more than the state minimum wage rate. It also exempts IHSS providers, employees on air carrier flight decks or cabin crew members and employees in the construction industry covered by a valid collective bargaining agreement.
HWHF authorizes employees to use paid sick days upon oral or written request for the diagnosis, care, or treatment of an existing health condition of, or preventative care for, the employee or the employee’s family member and for specified purposes, as defined, for employees who are survivors of domestic violence, sexual assault, or stalking. For purposes of this law, a family member is defined as a child, parent, spouse, registered domestic partner, grandparent, grandchild, or sibling. HWHF’s definition of family member is broader than California’s “Kin Care” law (allowing employees to use up to half of their annual sick leave accruals for family members), which defines a family member as a spouse, registered domestic partner, parent, or child.
HWHF prohibits employers for discharging, threatening to discharge, demoting, suspending, or in any manner discriminating against an employee for using accrued sick days, filing a complaint with the Department of Labor, alleging a violation of HWHF, cooperating in an investigation or prosecution of an alleged violation of HWHF, or opposing any policy or practice or act that is prohibited by HWHF.
HWHF requires that all employers provide employees either an itemized wage statement or other writing on a designated pay date stating the amount of sick leave, or PTO available for sick leave, available. If the need for sick leave is foreseeable, the employee shall provide reasonable advance notice to the employer, or if not foreseeable, as soon as practicable.
AB 304 amends HWHF to clarify the following provisions:
Eligibility for Paid Sick Leave
- “Retired Annuitants” as defined by law are not considered employees for purposes of HWHF and are not eligible to receive paid sick leave.
- Employees must work for the same employer for 30 or more days within a year in order to be eligible to accrue paid sick leave with that employer.
- As an alternative to the accrual method of one hour of paid sick leave for every 30 hours worked, employers can allow an employee to accrue paid sick on a regular basis through an accrual rate other than hours worked (e.g., per week, per pay period, per month, etc.), so long as the employee has accrued at least 24 hours of accrued sick leave by the 120th calendar day of employment, or each calendar year, or applicable 12-month period.
- Employers may also satisfy the accrual requirement by providing at least 24 hours or three days of paid sick leave that is available to the employee to use by the completion of his or her 120th calendar day of employment. This provision appears to allow an alternative frontload method using alternate methods of accrual based on days, weeks, or months.
- For purposes of the frontloading method, a “full amount of leave” in a year means 3 days or 24 hours
- A “year” means “each year of employment, calendar year, or 12-month period.”
Existing Paid Sick Leave/Paid Time Off Policies
- Employers who already offer paid sick leave or other paid time off (PTO) are not required to provide additional sick leave under HWHF as long as the existing sick leave/PTO policy either: (1) satisfies the accrual, carry over, and use requirements of HWHF; or (2) was in effect prior to January 1, 2015, provides at least one day or eight hours of paid sick leave/PTO within three months of employment, and allows employees to accrue at least three days or 24 hours of paid sick leave/PTO within nine months of employment. If an employer changes its paid sick leave/PTO policy to lower employee accruals, the policy will lose its grandfathered status and will be subject to all other HWHF accrual requirements.
Reinstatement of Paid Sick Leave Upon Rehire
- Where employees separate from employment and return within one year, employers do not have to reinstate previous sick leave accruals if those accruals were paid out at termination, resignation, or separation of employment. Further, any reinstated sick leave is subject to the use and accrual limitations of the law.
Calculating the Rate of Pay for Sick Leave
- For non-exempt employees, an employer can calculate paid sick leave either: (1) in the same manner as the regular rate of pay for the workweek in which the employee uses paid sick time, whether or not the employee actually works overtime in that week; or (2) by dividing the employee’s total wages, not including overtime pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment.
- For exempt employees, employers should calculate paid sick leave in the same manner as the employer calculates wages for other forms of paid leave time.
- While employers must record hours worked and sick time accrued and used, employers are not obligated to inquire into or record the purposes for which an employee uses paid leave or paid time off.
Violations of HWHF may result in monetary penalties. It is important that a public agency’s sick leave benefits comport with the provisions of HWHF. But many employers have struggled to implement this law because the original legislation presented some confusion and unanswered questions regarding the new requirements. While AB 304 does provide some clarification regarding the provisions of HWHF, it still leaves much of the language vaguely worded and open to interpretation. For consultation to determine whether your agency’s policies and practices are in line with HWHF, please contact Allyson Hauck at email@example.com.