California Senate to Consider Sick Leave Law Clean Up Legislation As Deadline Looms

With eight days remaining before major provisions of California’s sick leave law become effective, the California Legislature continues to tinker with clean up legislation.  On June 22, 2015 the California Assembly amended and passed Assembly Bill 304 (Gonzalez) (“AB-304”), by a vote of 69-0.  AB-304 now goes to the California Senate for consideration.

AB-304 would make significant changes to the Healthy Workplaces, Healthy Families Act of 2014 (California’s paid sick leave law), including:

  • Provides that the definition of “employee” does not include retired annuitants.
  • Specifies that the law applies to an employee “who works in California for the same employer for 30 or more days within a year.”  Currently, the law applies to an employee “who works in California for 30 or more days within a year from the commencement of employment.”
  • Provides that an employer may use a different accrual method, other than providing one hour per every 30 hours worked, provided that the accrual is on a regular basis so that an employee has no less than 24 hours of accrued sick leave or paid time off (“PTO”) by the 120th calendar day of employment or each calendar year, or in each 12-month period.
  • Amends the law to provide a “grandfather” clause for existing sick leave and PTO policies that were in place prior to January 1, 2015, and which meet specific criteria set by the law.
  • Provides that sick leave or annual leave benefits provided to certain state employees under specified statutes or the provisions of a memorandum of understanding meet the requirements of the existing law.
  • Provides that if an employee separates from an employer and is rehired by the employer within one year from the date of separation, the employer is not required to reinstate accrued PTO to an employee who was paid out at the time of termination, resignation, or separation of employment.
  • Clarifies that if an employer provides unlimited paid sick leave or unlimited PTO to an employee, the employer may satisfy the existing law’s requirement regarding notice to the employee of the amount of sick leave available by indicating “unlimited” on the notice or the employee’s itemized wage statement.
  • Delays, until January 21, 2016, application of provisions related to the inclusion of the amount of paid sick leave available on itemized wage statements or separate writings for employers in the broadcasting and motion picture industries.
  • Requires the employer to calculate the rate of paid sick leave for non-exempt employees either in the same manner as the regular rate of pay for the workweek in which the employee uses paid sick time, or by dividing the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment.
  • Provides that the employer is not obligated to inquire into or record the purposes for which an employee uses paid leave or PTO.

The grandfather clause may come too late for many employers who revised their policies in advance of the July 1, 2015 effective date for sick leave accrual to be required by law.  The provision would carve out paid sick leave or PTO policies offered to a class of employees prior to January 1, 2015, if certain requirements are met.  Such policies would be deemed compliant if the policies provided sick leave or PTO benefits on a regular basis so that an employee accrued no less than one (1) day or eight (8) hours of paid sick leave or PTO within three (3) months of employment, and the employee was eligible to earn at least three (3) days or 24 hours of sick leave or PTO within nine (9) months of employment.

AB-304 is an urgency bill, and will go into effect immediately if enacted.  We will continue to monitor the progress of AB-304 and report on any significant developments.

AALRR has established a Sick Leave Hotline* to assist its clients with compliance leading up to July 1st and beyond. *Standard hourly rates will apply, attorney response may be subject to completion of a representation agreement.

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