The California paid sick leave law provides some of the most comprehensive benefits in the U.S. Learn what employers need to know.
Here’s how California labor law paid sick leave requirements work, how they differ from federal laws and how to calculate accrual rates for hourly, salaried and other types of workers.
How California Paid Sick Leave Works
In 2014, California enacted a new paid sick leave law, the Healthy Workplaces, Healthy Families Act. This law was amended in 2016, and an FAQ guide reflecting recent updates was issued in 2017.
The Healthy Workplaces, Healthy Families Act entitles employees who work in California for at least 30 days to earn at least one hour of paid leave for every 30 hours worked. The law covers both full-time and part-time employees.
Accrued sick leave can carry over to the next year. Employers can limit the amount of sick leave employees use in one year to 24 hours or 3 days and can cap how much carries over to the next year at 48 hours or 6 days.
California’s paid sick leave law excludes certain exempt employees. These exceptions include workers covered by qualifying collective bargaining agreements, In-Home Supportive Services providers and certain employees of air carriers.
Key Rules for Employees
The following rules govern employee usage of sick leave:
- Employees may use accrued paid sick days starting on the 90th day of employment.
- Workers can request paid sick leave verbally or in writing.
- Employees can’t be required to find replacements as a condition for taking paid sick leave.
- Workers can take paid sick leave on behalf of themselves or to care for a family member for purposes involving the diagnosis, care or treatment of an existing health condition or preventive care or for specified purposes for employees who are victims of stalking, domestic violence or sexual assault.
Key Rules for Employers
Employers must abide by certain regulations when applying California sick leave policy:
- Employers must display posters about paid sick leave where they can be easily read. Official posts are available in English, Spanish, Vietnamese and Chinese.
- At the time of hire, employers must provide written notice to employees with sick leave rights.
- Owners must provide for the accrual of one hour of paid sick leave for every 30 hours worked, and must allow for use of at least 24 hours or 3 days or provide at least 24 hours or 3 days of paid sick leave at the beginning of a 12-month period for each eligible employee to use each year.
- Owners must allow eligible employees to make use of paid sick leave upon reasonable request.
- Employers can’t require employees to give advance notice before using paid sick leave time.
- Owners can’t require employees to provide documentation such as doctor’s excuses to qualify for paid sick leave.
- Employers can’t compel employees to take sick leave in increments of less than two hours (such as interpreting lunch breaks that exceed 1 hour as sick leave).
- At the time paychecks are issued, Owners must show how many hours of paid sick leave an employee has remaining on their pay stub or document.
- Employers must maintain records documenting how much sick leave employees have earned and must retain these records for three years.
California’s paid sick leave law text includes provisions for financial penalties against employers who illegally withhold paid sick leave. Employers can be fined administrative penalties the greater of triple the amount owed or $250, up to $4,000, plus additional penalties.
California employers can be subject to fines of up to $10,000 plus back wages for retaliating against employees who use paid sick leave. In addition, the employer could be ordered to pay back any lost wages had the employee been suspended, demoted or terminated.
As a General Rule
To limit your potential liability, if you aren’t sure what laws apply, don’t discipline an employee for using paid sick leave without first speaking to a knowledgeable attorney. If an employee has already used all their paid sick leave time and they fail to report to work without providing notice, you can discipline them if this is stipulated in your company policy.
These guidelines represent the minimum requirements that California employers must comply with to meet state law. Employers may choose to offer better sick leave policies as an incentive to attract qualified workers. However, they must meet these minimum requirements in all cases.
How California Sick Leave Laws Differ From Federal and Local Laws
Some counties and cities have even stricter requirements than the state of California. For example, San Francisco employers with at least 10 employees must allow workers to accrue up to 72 hours of sick leave per year.
Employers also should be aware that federal paid sick leave requirements differ from California regulations. In general, federal law doesn’t have requirements in most of the areas stipulated by California law, including:
- Paid leave requirements
- Eligibility requirements
- Pay rate requirements
- Accrual calculations
- Carryover rules
- A waiting period required before taking paid sick leave
- Exclusions for collective bargaining agreements
However, there are some exceptions where federal law does make stipulations equivalent to or in addition to those required by the state of California:
- Both federal and California law require employers to retain paid sick leave records for three years.
- The Family and Medical Leave Act of 1993 (FMLA) requires employers with at least 50 employees to post paid sick leave requirements, whereas California requires it of all employers.
- Federal regulations recommend that employers should not require exempt staff to take sick leave in less than 1/2-day increments, where California reduces this to 2-hour increments.
- U.S. law only requires that sick paid leave policy be included in employee handbooks, whereas California law requires it to be provided at the time an employee is hired.
- Federal law doesn’t require accrued sick leave balances to be reinstated if an employee is rehired, while California requires it if an employee is rehired within a year.
- U.S. law doesn’t require employers to pay out unpaid sick leave balance if an employee is terminated unless the employer offers it in their employee contract, while California law does not have a requirement in this area (although it does require paid time off to be paid upon termination).
The complexity of paid sick leave laws makes it prudent to consult with a qualified expert when creating your company’s paid sick leave policy. To assure compliance, employers should have their legal team check applicable California state and city paid sick leave laws as well as federal regulations.
How to Calculate Sick Leave in California
When calculating paid sick leave time, employers must use different methods for hourly versus salaried employees. This means that, for instance, California paid sick leave law for part-time employees gets calculated differently than for full-time employees if they’re hourly, non-salaried workers.
Additionally, workers who get paid piecework (for instance, for the number of units produced) or by commission have different rules.
Hourly Sick Leave Accrual
For hourly employees, the simplest way to calculate sick leave is to provide one hour of sick leave for every 30 hours worked, for both regular and overtime hours. This applies to part-time as well as full-time employees. For instance, a part-time employee who worked 60 hours over the course of a 2-week pay period would accrue 2 hours of paid sick leave.
Salaried Sick Leave Accrual
The best way to ensure salaried employees receive the required 24 hours of paid sick leave per year is to provide 1.33 hours of paid sick leave per week worked (equivalent to 2.66 hours every two weeks). For example, after 20 weeks, a salaried employee would accrue 26.6 hours of paid sick leave.
Piecework Sick Leave Accrual Rate
The easiest method employers can use for workers paid by the piece is to calculate an average daily rate of paid sick leave accrual. You can do this by determining how many pieces the employee produced during the previous 90 days and at what rate.
For example, if an employee produced 900 units over a period of 90 days at $50 a unit, averaging 10 units a day, their 3 days of paid sick leave should be paid at $500 a day.
Commission Sick Leave Accrual Rate
Employers can calculate an hourly rate for paid sick leave. You can do this by dividing the total commissions received over 90 days by the number of work hours that salaried employees worked during that time frame.
If a sales representative earned $20,000 in commissions during the past 90 days and salaried employees worked 520 hours over that time period, they should receive sick leave pay at $38.46 an hour.
Invest in Paid Sick Leave Compliance to Save Time and Avoid Hassles
The easiest way to ensure compliance with California’s complex paid sick leave laws is to enlist the help of qualified professionals. Consulting a legal expert can help make sure your company policy complies with California state and local policies as well as federal policy.
A payroll outsourcing service can ensure that your paid sick leave gets calculated at the correct rate. If you need to increase your budget to cover your expenses for legal consultation or payroll outsourcing, consider applying for a business credit line or loan.