Complying with California’s Sick Pay Mandate

Are you prepared? Starting on July 1, state law will require employers in California to offer sick pay to nearly every category of employee. The minimum obligation is to provide sick pay at the rate of one hour for every 30 hours worked or a lump sum allocation of three days or 24 hours per year. A company’s paid time off (PTO) plan may satisfy the new obligations under the Healthy Workplaces, Healthy Families Act of 2014 as long as it provides the minimum level of benefits mandated by the law. The PTO policy may need to be adjusted in such areas as PTO accrual rate and covering all categories of employees. The HWHFA covers large and small employers and does not have a size exemption. The law mandates benefits to all full-time, part-time, temporary, and seasonal employees who work for the company in California for 30 or more days within a year, with certain exceptions.

However, if during the 90 days prior to taking a sick day an employee had different hourly pay rates, the rate of pay is calculated based on a 90-day average, which also applies if the employee was paid by commission, piece rate, or was a nonexempt salaried employee. The new law also requires employers to provide a workplace poster containing information regarding sick pay rights and issue an individualized Notice to Employee upon hire and to existing employees by July 8. Employers may impose an accrual cap of 48 hours or six days, or an annual use cap of 24 hours or three days. Under the HWHFA, employees may use accrued sick pay benefits for a variety of uses, including caring for a child, parent, spouse, registered domestic partner, grandparent, grandchild, and sibling.

There are other payment options such as a lump sum of which you may not be aware. Because we’re not attorneys or qualified to give legal advice, if you have more questions, click here to read a very detailed explanation and discussion of the sick pay law by Christopher W. Olmstead of Ogletree Deakins as published on Lexology.com.

Click here or call (714) 993-1900 to request an employee or discuss a workforce management issue.