On September 10, 2014, Governor Brown signed into law the Healthy Workplaces, Healthy Families Act (AB 1522 – Gonzalez), which imposes new requirements on employers to provide paid sick leave under specified circumstances, effective January 1, 2015.
Specifically, the Health Workplaces, Healthy Families Act of 2014 (“HWHFA”; see new Lab. Code § 245, et seq.) provides for the following:
Entitlement To Paid Sick Leave
Full- and part-time employees who on or after July 1, 2015 have worked for 30 or more days within a year from the commencement of employment are entitled to paid sick days as specified in the HWHFA.
Excluded Employees
Employees who are covered by a valid collective bargaining agreement are not covered by the HWHFA so long as the collective bargaining agreement meets all of the following requirements: (i) provides for the wages, hours of work, and working conditions of employees, (ii) expressly provides for paid sick days or a paid leave or paid time off policy that permits the use of sick days for employees; (iii) final and binding arbitration of disputes concerning the application of paid sick day provisions in the agreement; (iv) premium wages for overtime worked; and (v) an hourly pay rate of not less than thirty percent more than the state minimum wage. Employees in the construction industry who are covered by a valid collective bargaining agreement that meets all of the above requirements also are excluded from the HWHFA. However, in the case of employees in the construction industry the collective bargaining agreement also must have been entered into before January 1, 2015 or must contain an express waiver of the provisions of the HWHFA in clear and unambiguous terms. Other excluded employees include providers of in-home support services and certain employees in the airline industry who are covered by federal law.
Covered Employers
Any person employing another under any appointment or contract for hire is a covered employer. The HWHFA expressly covers the state, political subdivisions of the state, and municipalities.
Amount And Use Of Paid Sick Leave
Employees are entitled to use up to 24 hours or three (3) paid sick days in each year of employment. Employees may begin using paid sick days on the 90th day of employment, after which employees may use paid sick days as they accrue.
Rate of Pay
The rate of pay for paid sick leaves is the employee’s normal rate of pay. If during the 90 days prior to the employee’s use of a paid sick day, the employee had differing rates of pay, was paid on commission or piece rate, or was a nonexempt salaried employee, the rate of pay shall be calculated 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.
Accrual Of Sick Leave
Employees shall accrue paid sick days at the rate of not less than one (1) hour per every 30 hours worked, beginning at the commencement of employment or the operative date of the HWHFA [January 1, 2015], whichever is later. Employees who are classified as exempt under the administrative, professional, or executive exemptions in the IWC Wage Orders are deemed to work 40 hours per workweek, unless the employee’s normal workweek is less than 40 hours, in which case the employee shall accrue paid sick days based upon the normal workweek.
Carry Over
Accrued paid sick days carry over from year to year. However, employers are not required to permit accrual beyond a total of 48 hours or six (6) days. In addition, no accrual or carry over is required if an employee receives the full amount of sick leave at the beginning of each year pursuant to an employer’s existing sick leave policy. Employers are not required to provide compensation to an employee for accrued, unused paid sick days upon termination, resignation, retirement, or other separation from employment, except that an employee who separates from an employer and is subsequently rehired within one (1) year of separation is entitled to have all previous accrued and unused paid sick days reinstated.
Circumstances Under Which Paid Sick Days May Be Used
Paid sick days may be used for the diagnosis, care, or treatment of an existing health condition of, or preventive care for, an employee or employee’s family member. “Family member” is defined as a biological, step, adopted, or foster child; spouse; registered domestic partner; grandparent; grandchild; and sibling. In addition, victims of domestic violence, sexual assault, or stalking may use paid sick days to obtain legal or medical services related to those circumstances.
Impact On Existing Paid Sick Leave Policies
An employer is not required to provide additional paid sick days if the employer has a paid leave policy or paid time off policy that provides leave in the same amount, and which may be used under the same circumstances, as required by the HWHFA. The policy also must meet the accrual and carry over requirements of the HWHFA.
Prohibition Against Retaliation Or Discrimination
An employer may not deny an employee the right to use paid sick days consistent with the HWHFA or otherwise discriminate or retaliate against an employee for engaging in any activity protected under the HWHFA. There is a rebuttable presumption of retaliation if an employer denies an employee the right to use accrued paid sick days or takes adverse employment action against an employee within 30 days of an employee complaining of a violation of the HWHFA or opposing any practice prohibited by the HWHFA.
Enforcement; Liability
The Labor Commissioner is charged with enforcement of the HWHFA and is authorized to impose administrative penalties and to award damages and other relief in the form of reinstatement and back pay for violations of the HWHFA. Administrative penalties of three times the dollar amount of paid sick days withheld or $250 can be imposed up to a maximum of $4,000. Additional administrative penalties of $50 per day up to a maximum of $4,000 can be imposed in cases in which an employee suffers additional harm, e.g., discharge from employment. The Labor Commissioner is authorized by the HWHFA to bring civil actions to enforce compliance with its orders.
Posting and Notice Requirements
Employers are required to post in a conspicuous place information regarding the employee’s entitlement to use paid sick days, the amount of paid sick days to which employees are entitled under the HWHFA, the terms of use of paid sick days, and the protections afforded against retaliation or discrimination. Failure to post the required notice can result in civil penalties of not more than $100 per each offense. Employers also are required to provide information to employees either in their pay stubs or in a separate writing regarding the amount of accrued sick leave they have available. Finally, employers are required to provide written notice to employees at the commencement of their employment regarding their rights under the HWHFA.
What This Means to You
Based on the above, employers likely will face new challenges in implementing the HWHFA. Other actions taken by the Legislature this last term will impose additional new requirements on employers. In mid-October, KMTG will be publishing its annual update on new legislation impacting employers and the workplace. We also will be hosting seminars in both Sacramento and Roseville on this same topic in early November. Please look for more information regarding on these topics soon.
Questions
If you have any questions concerning this Legal Alert, please contact the following from our office, or the attorney with whom you normally consult.
David W. Tyra | 916.321.4500