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Emergency Changes to Healthy Workplace, Healthy Families Act Add Flexibility to Accrual of Paid Sick Leave

The Legislature has enacted AB 304, emergency legislation amending the Healthy Workplace, Healthy Families Act (“Act”), which requires most California employers to provide sick leave to their employees.

These emergency amendments generally clarify some of the Act’s provisions, in addition to providing some flexibility in the way that sick leave is accrued by employees.  The most significant amendments include:

  • Employers are no longer required to calculate sick leave accrual at the rate of one hour leave per 30 hours worked. Instead, employers may use any alternate method that allows the employee to accrue time “on a regular basis” so that the employee has 24 hours of leave available by their 120th day of employment, or each calendar year/12-month period.  For new employees, the Act now states that the accrual requirements may be met by providing at least 24 hours of leave that becomes available on the 120th calendar day of employment.
  • For employers that had paid sick leave policies prior to January 1, 2015, those policies may now satisfy the Act’s accrual requirements. As long as the preexisting policy provides one day of paid sick leave within the first three months of employment of any calendar year, or 12 month period, and the employee may earn at least three total days within nine months of employment, the Act’s accrual requirements are satisfied.
  • The Act’s accrual requirements may now be satisfied by a limited number of statutory sick leave benefit policies available to State government employees.
  • Employees that are fired, laid off, or quit, and are rehired within one year, are not entitled to reinstatement of accrued sick leave if that leave was paid out at the time of the employee’s initial departure.
  • The Act previously required that employees receive notice of their accrued sick leave at each pay period. The amendments make clear that employees receiving “unlimited” paid sick leave may be notified by informing them that their accrued sick leave is “unlimited” on their pay stub or other documentation.
  • The amendments clarified the wage rate that must be paid to employees using sick leave:
    • Nonexempt employees must receive:
      • The regular rate of pay the employee received in the week they took leave, irrespective of overtime; OR
      • A rate determined by dividing the employee’s total wages, not including overtime premiums, earned by the number of hours worked during full pay periods over the prior 90 days.
    • For exempt employees, the pay rate is the same as that used for “other forms of paid leave time.”

These amendments are effective immediately.

The Act’s requirements are complex, and this post is not meant to provide legal advice.  If you have any questions about the Act, or any other issue, please contact Kingsley Bogard.

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