Question:

Do I have to give my employees paid sick days in California? Seems like a lot of work for a small business.

Answer:

Paid sick days are not just a perk that certain employees are lucky enough to receive if they’ve worked for an employer for long enough, or if they’ve negotiated this in their compensation package– in California, they are a requirement, with very few exceptions.

At the state level, the Healthy Workplaces, Healthy Families Act of 2014 sets the guidelines for how paid sick days are administered, and while local ordinances can expand on this law and offer even more protections for employees locally, this law is the cornerstone of paid sick days across California. We’ll touch on those local ordinances a bit more later on, but first, let’s go over the basics of California’s law.

The Basics of California Sick Leave Law

1. Who receives paid sick days? Are there exceptions to this?

Any employee who works in California for 30 or more days within a year is entitled to sick days. This includes part-time and temporary employees, regardless of the size of the business!

The only exceptions to this general rule include employees covered by qualifying collective bargaining agreements, in-home supportive services providers, and certain employees of air carriers. So unless your employees fall under that very short list of exceptions, expect to provide sick days under state law.

2. How many sick days do employees receive?

This is a fun one, because it depends on how the sick days are provided– through an accrual method or through an up-front method.

The accrual method is what we would describe as the “standard” method because it works well for both hourly and salaried positions. With an accrual method, an employee must earn at least one (1) hour of paid sick leave for every thirty (30) hours worked. Employers may choose to implement a different accrual method than the 1:30 calculation we’ve described, so long as accruals are earned on a regular basis and the employee accrues at least twenty-four (24) hours or three (3) days of paid sick leave within 120 calendar days from the date of hire. Based on this method, an employee could possibly accrue more than three (3) days per year, depending on their hours worked and other internal policies.

The up-front method generally works best for salaried employees who do not formally count their hours, because with this method, they receive a lump sum of paid sick days, regardless of the actual amount of hours they work overall. This lump sum may be different for different classes or types of employees, so long as the state’s minimum is met. With this method, the employer must provide a minimum of twenty-four (24) hours or three (3) days of paid sick days to an employee per 12-month period. What’s important to note here is that this “12-month” period is not defined as a calendar year. This means that the employer can choose how to measure out the 12-month period; it can be determined based on the employee’s anniversary date, the calendar year, fiscal year, or another period. The key, as in most employment practices, is being consistent with how this period is measured between employees.

3. What may sick days be used for?

Assuming an employer has a dedicated paid sick day policy (and not an all-in-one paid time off policy that encompasses both sick days and vacation) an employee is entitled to use their paid sick days for the following purposes: (1) to take paid leave for employee’s own or a family member for the diagnosis; (2) for care or treatment of an existing health condition or preventive care; or (3) for specified purposes for an employee who is a victim of domestic violence, sexual assault or stalking.

An employer may require its employees to take a minimum of at least two (2) hours of paid sick leave at a time, but otherwise the determination of how much time is needed is left to the employee and they may use whatever they have available in their paid sick day bank.

The employee must notify the employer in advance if the sick leave is planned, but if the need is unforeseeable or arises quickly, the employee only needs to give notice as soon as is practical. For example, if an employee has a doctor’s appointment for a routine checkup, they’ll need to give advance notice; but if the employee gets into an accident on the way to work and is rushed to the hospital, they should give notice as soon as is “practical,” which may mean hours or even days later, depending on the unique circumstances.

4. When can sick days be accessed?

Assuming an employer uses the accrual method, sick days begin accruing upon the first day of employment. With the up-front method, they’re provided all at once.  However, state law allows for employers to put a sort of “freeze” on the use of sick days so that employees may only use their sick days beginning on the 90th day of employment. But because this freeze is not automatically triggered, but rather, is triggered if an employer adopts this as a policy, employers will want to make sure their paid sick day policy is clear about when sick days can be accessed if they plan on putting a freeze like this in place.

Let’s tie all of this together with an example. Say Bertie begins working full-time for a new employer on January 1, 2021. His employer has informed him that he is entitled to 1 hour of paid sick leave for every 30 hours worked. Bertie will begin accruing his sick leave on January 1, 2021, his first day of employment. However, Bertie’s employer has a policy in their employee handbook that states that employees may not access their accrued sick days until they’ve worked for the employer for ninety (90) days.

Bertie comes down with a cold at the beginning of March and needs a day off. By this point, Bertie has eight (8) hours of sick time banked, but because of his employer’s policy, he’s not entitled to use any of the sick time he’s accrued until April 1, 2021. If the employer’s policy were silent on when employees could access sick days, Bertie may be able  to use these hours, but the employer made sure they had an airtight policy!

5. Can sick days be rolled over? Can they be capped?

Unused but banked sick days may be rolled over from year-to-year. For example, if an employer has an accrual policy, the employee may accrue more time than they actually use in a 12-month period. In such case, the employee is entitled to carry over the unused sick days.

However, an employer may choose to cap the accrual of paid sick days at forty-eight (48) hours or six (6) days per year. What this means practically is that if an employee meets this cap, they will not be able to carry over or accrue any additional sick days until some of the paid sick days they’ve accumulated in their bank are used.

For example, say Bertie didn’t get sick, because Bertie never gets sick! He’s been working for the same company since 2019 and he’s never taken a sick day in that entire time. In 2019, he was provided with three (3) days sick leave upfront; in 2020, he was provided with another three (3) days sick leave, for a total of six (6) days. Bertie’s employer has a six (6) day cap though, so when 2021 hits, Bertie will not be able to continue banking any more time! Bertie, may we recommend a mental health day, to help clear the bank?

6. Do sick days have to be paid out at exit?

Unlike vacation time in California, paid sick days are not considered wages and do not need to be paid out upon employee exit/termination. However, if an employer has a combined, limited paid time off plan, where vacation and sick leave are not distinguished from each other or are otherwise lumped together, an employer will likely need to pay out any banked time upon exit/termination. As employers use more and more unique avenues for providing time off, the waters become murkier here, so we recommend speaking to an attorney about your unique situation in the event of an employee exit!

7. What steps does an employer need to take to comply with this California law?

In addition to, you know, providing the sick days as mandated, employers have additional obligations for compliance. They must:

1. 1. Display a government poster on paid sick leave where employees can read it easily. This may also be “posted” digitally, so long as employees can easily access the poster during working hours at a minimum, just as they would be able to view a physical poster in the workplace;
   2. Provide written notice to employees with sick leave rights at the time of hire. For most employers, this will be the company policy located in the employee handbook;
   3. Allow eligible employees to use accrued paid sick leave upon reasonable request. Requests may be verbal or written. An employee cannot be required to find a replacement as a condition for using paid sick days, and employers should, in no way, interfere with an employee’s right to use their sick days;
   4. Show employees how many days of sick leave they each have available. This must be on a pay stub or a document issued the same day as a paycheck; and
   5. Keep records showing how many hours have been earned and used by employees for at least three (3) years.

We could talk about this law all day! But we don’t want to overwhelm you with every implication of paid sick days under California’s Healthy Workplaces, Healthy Families Act. If you have additional questions about this, visit the Department of Industrial Relations handy FAQ page here, or send an email to bertie@inbetterwetrust.com to schedule a free 30-minute consultation.

Don’t Forget About Local Ordinances

Fun fact, San Francisco became the first California city to offer paid sick leave in 2007, even before the Healthy Workplaces, Healthy Families Act of 2014 was passed! That’s right, cities can pass laws that dictate how employees within their geographic boundaries must be treated. After San Francisco took the lead and established paid sick days as a mandatory benefit, other cities followed suit. Today, California cities from San Diego to Santa Monica to Oakland and more have their own local ordinances determining employees’ rights to paid sick days.

This is important because these ordinances are more protective of employees than even the state law is. Here are some (non-exhaustive) examples of differences between state law and some of the local ordinances sprinkled throughout California:

• • Difference between how sick days are administered: Under California state law, employers may create either accrual or up-front policies for administering sick days. However, under Oakland’s local ordinance, sick days may only be accrued. In fact, “Employers may risk a violation of Oakland’s Paid Sick Leave law if they simply frontload… paid sick leave at the beginning of the year.”
  • Differences between how many sick days must be provided: California law states that if an employer chooses an up-front method for administration, at least twenty-four (24) hours must be provided. However, under San Diego ordinance, at least forty (40) hours must be provided if the employee chooses to use this method. And Santa Monica ordinance takes it a step further by taking into consideration how many employees an employer has, which state law does not.
  • Differences in why a sick day may be used: Under the Healthy Workplaces, Healthy Families act, the definition of “parent” is more narrow than how the city of San Francisco’s ordinance defines it. This means that in San Francisco, employees have expanded flexibility on when they may use their sick days. And Emeryville’s ordinance even let’s employees use this time for the care of a service dog!

This can be a complicated patchwork of laws to sort through, so we always recommend speaking to an attorney before rolling out your paid sick day policy. Oh and pro tip: give your attorney some lead time! Crafting these policies the right way takes time, and trust us, you absolutely want to make sure you get them right. That will save you headaches later on down the road!

Bonus: Sick Days under the FFCRA

On March 18, 2020 President Trump signed the Families First Coronavirus Response Act, or the FFCRA, into law. This law, which took effect on April 1, 2020, was the first substantive federal response to the current COVID-19 crisis and applies to employers with fewer than 500 employees.

The FFCRA contains eight “divisions”; one of these divisions addresses paid sick leave under a sub-act called the “Emergency Paid Sick Leave Act.” We highly recommend familiarizing yourself with how this sub-act generally works, because it provides additional sick days to employees above and beyond what is provided under federal law and/or local ordinance. For the sake of brevity, we’ve broken this information out into a separate blawg post here!

To Wrap Up….

If your brain feels like you just absorbed a ton of information, we get it! It’s a lot to process. Maybe you need to take a sick day to recover, wink wink. But in all seriousness, this can be a tricky area of employment to navigate on your own. If you have any questions, need additional examples, or you just want to chat about how wholesome it is that Emeryville looks out for service dogs, send an email to bertie@inbetterwetrust.com and we’ll get back to you!