AMENDMENTS TO SICK LEAVE LAW PASSED

Realizing that the new sick leave law, AB

1522, has spurred a robust public discussion
regarding the implementation of the law, the
Legislature passed AB 304 to clarify some of
the requirements of the law and to ease
implementation. These clarifications were
passed as emergency legislation and are
effective July 14, 2015.
While this is
obviously after the July 1st date by which
employers were supposed to change their
policies to comply with the new law,
employers still should consider whether the
practical effect of these amendments to the
law might be of benefit to them, and if so,
consider amending their sick leave or paid
time off policy accordingly.
Here are the clarifying provisions of sick
leave law amendments:
Additional Accrual Method:
The law
currently provides that sick leave accrues at
the minimum rate of 1 hour of sick leave for
every 30 hours worked (both straight time and
overtime hours). For this accrual option,
exempt employees are assumed to work a 40hour workweek (unless regularly scheduled to
work fewer hours).
The existing alternative front-loading method
allows employers to provide the full annual
amount of sick leave at the beginning of each
year so long as that front-loaded amount is not
less than 3 days or 24 hours of sick leave,
whichever is greater. Under this alternative,
employers avoid the accrual and carryover
obligations of the law.
AB 304 provides another option: Accrual of a
set amount of sick leave each pay period
provided that the accrual is on a regular basis
so that an employee has no less than 24 hours
of accrued sick leave or paid time off by the
120th calendar day of employment or each

calendar year, or in each 12-month period.

This appears to translate to a minimum of 3
hours of sick leave per pay period. It is a
good option where employees work variable
amounts of overtime and employers want to
provide a set amount of sick leave each pay
period.
Accrual Option For Seasonal Employees:
Another option afforded under AB 304 is the
required accrual of sick leave can be satisfied
if employees are provided 24 hours or three
days of paid sick leave that is available to the
employee to use by the completion of his or
her 120th calendar day of employment. This
is a good option to consider when an employer
has seasonal employees who often do not
work 120 days for that employer. It is also an
option if a companys payroll system does not
track certain employees on an hourly basis.
What is not clear is whether the 120 calendar
days can be accumulated by the employee
over a period of more than one year. We
anticipate future clarification on this point.
Option For Maximum Use And Accrual
Limits: Employers have the option to limit
the use of sick leave to 3 days or 24 hours,
whichever is greater, in each year of
employment, calendar year, or 12-month
period. It should be noted that AB 304
amended the law by changing in each year of
employment to in each year of employment,
calendar year, or 12-month period. This
additional language appears to clarify that the
accrual and use of sick leave can be based on
some year other than July 1 to June 30 or the
employees anniversary year.
Given the
uncertainties still present in the law,
employers are advised to consult with legal
counsel or HR professionals about how to get
all employees on the same year or 12 month
period for the accrual and use of sick leave.

AMENDMENTS TO SICK LEAVE LAW PASSED

Additionally, employers continue to have the
option to limit the accrual and carryover of
sick leave to 6 days or 48 hours, whichever is
greater.
Preexisting Sick Leave Policies: In what is a
little too late, the law has been amended to
grandfather in sick leave or paid time off
policies that were in effect as of January 1,
2015, but only if under those policies sick
leave or time off could be used for the same
purposes and under the same conditions as
provided under AB 1522. If an employer has
not yet changed its sick leave or PTO policy, it
is unclear whether the policy can be modified
at this point to be compliant with use
provisions of AB 1522 or if the current
policy had to be compliant prior to July 1,
2015. Being that AB 304 passed after July 1,
it appears most likely that the intent of this
clarification was to allow for employers to
amend their preexisting policies, even after
July 1, 2015, to provide that sick leave can be
used for the same purposes and under the
same conditions as provided for in AB 1522.
Further, to qualify, the preexisting policy must
also either satisfy a) the accrual and carry over
requirements of the law; or b) provide leave
to a class of employees that provided for the
regular accrual of sick leave or PTO of no
less than one day or eight hours of accrued
leave within three months, and the employee
was eligible to earn at least three days or 24
hours within nine months. Making this
amendment even less helpful is if an employer
modified the accrual method under its
preexisting policy, which many employers did
as of July 1st, that employer is not eligible for
this grandfathering provision but instead must
now must comply with the accrual methods
under the sick leave law.
Note that if an employer changes its sick leave
policy, the Notice to Employee form that is to

be given to new hires (excluding exempt and

public sector employees, and employees
covered by a qualifying collective bargaining
agreement) has a section pertaining to paid
sick leave. Current employees should be
given this Notice within 7 days after the new
sick policy is effective. In the alternative,
employees can be notified of the same
information as that required by the Notice in a
different form of communication such as a
cover memo accompanying the new sick leave
policy or revised employee handbook
containing that new policy. The updated
Notice to Employee is available at:
www.dir.ca.gov/dlse/Publications/LC_2810.5
_Notice_(Revised-11_2014).pdf.
Indicating Unlimited Time Off On
Paystubs: For employers who provide the
option of unlimited sick leave or paid time off,
the paystub notice requirements can be met
by indicating on the notice or the employees
itemized wage statement that such leave is
unlimited.
Options For Calculating Sick Leave Pay:
Under AB 1522 there were separate
requirements for how sick leave pay was
calculated depending on whether the
employees pay was variable (e.g.,
commission based pay). As the law has been
amended, employers are provided 2 options
for determining how sick leave pay for
nonexempt employees should be calculated:
1. Sick time for nonexempt employees
can be paid at the employees regular
rate of pay for the workweek in which
the sick time was used.
2. Another option for nonexempt
employees is for paid sick time to be
calculated by dividing the employee's
total wages, not including overtime

AMENDMENTS TO SICK LEAVE LAW PASSED

premium pay, by the employee's total
hours worked in the full pay periods of
the prior 90 days of employment.
For exempt employees, paid sick time is to be
paid in the same manner as the employer
calculates wages for other forms of paid leave
time.
The analysis of AB 304 provided to the Senate
Committee on Labor and Industrial Relations
notes that having the two alternatives for
calculating the sick leave pay amount for
nonexempt employees allows employers an
option when an employee takes sick leave
during the same workweek in which she or he
receives a significant commission or bonus
payment. Determining the regular rate of pay
for employees who are paid in whole or in part
by commissions or employees who receive
bonuses is somewhat complicated.
For
example, when a commission is earned based
on work performed over a number of
workweeks, that commission payment must be
apportioned back to each workweek in which
it was earned and the regular rate of pay for
each of those workweeks recalculated.
Similar calculations must be paid in relation to
bonus payments. Whether to use the regular
rate method or the 90 day method (actually,
the full pay periods over 90 days method) to
determine the amount to pay for sick leave
may depend on the circumstances of each
situation.
PTO Not Reinstated Upon Rehire: AB
1522 requires that unused accrued sick leave
balances have to be reinstated to separated
employees who are rehired within a one year
period. AB 304 clarifies that when accrued
PTO is paid to an employee at the time of
separation, the PTO balance does not have to
be reinstated if the employee is rehired within
one year.

No Obligation To Inquire: AB 304 provides

that an employer is not obligated to inquire
into or record the purpose for which an
employee uses paid leave or paid time off.
This amendment appears to be directed toward
the existing requirement that an employer
keep records for three years documenting the
hours worked and paid sick days accrued and
used by an employee and make those records
available to the Labor Commissioner upon
request. The amendment appears to clarify
that the records that must be maintained do not
have to include the purpose for which time off
is used for sick leave purposes. In fact,
guidance from the DLSE indicates that it
would be improper for an employer to inquire
into the purpose for which time off is taken for
sick leave purposes beyond an employee
stating, orally or in writing, that the time off is
for one of the purposes allowed under the sick
leave law.
As a recap, those purposes are: to diagnose,
care, or treat an existing health condition or
for preventative care for the employee or for
the employees child, spouse, domestic
partner, parent, parent of employees spouse,
grandparent,
grandchild,
or
sibling.
Employees who are victims of domestic
violence, sexual assault, or stalking may also
use paid sick leave for certain purposes [as
described in Labor Code sections 230(c) and
230.1(a) including to seek medical attention,
obtain services from a shelter or crisis center,
obtain counseling, participate in safety
planning or take other actions to increase
safety, or go to court.
Other Clarifications:

To clarify when an employee qualifies for

sick leave under the law, AB 304 notes
that an employee must work in California
for the same employer for 30 or more

AMENDMENTS TO SICK LEAVE LAW PASSED

days within a year. This amendment still

does not state whether the 30 days are
calendar days or days actually worked.
The DLSE has indicated that it is 30
calendars days on the payroll (since date
of hire), which would be consistent with
the option to restrict the use of accrued
sick leave to the 90th day of employment.
A covered employee does not include
specified CalPERS retired annuitants.
This allows retired persons to return to
work while still receiving a CalPERS
pension.
The sick leave law covers employees in
the construction industry without requiring
that the employee be engaged in onsite
work as the law had provided.
Delays implementation of requiring sick
leave accrual to show on itemized wage
statement for employers in the
broadcasting
and
motion
picture
industries until January 21, 2016.

Uncertainties and Further Clarifications:

While AB 304 does clarify some of AB
1522s equivocal language, certain provisions
in the amendments contain ambiguities of
their own. In the coming weeks, the DLSE
will provide guidance on how the DLSE
interprets these amendments to the sick leave
law. We will circulate further alerts once the
DLSE issues that guidance. So, yes, expect to
see clarifications to the clarifications.

For more information or assistance in

reviewing existing policies or establishing a
compliant paid sick leave policy, please
contact:
Jeffrey Dinkin
(805) 730-6820
(949) 725-4098
(424) 214-7016
jdinkin@sycr.com

Nicole Zajack
(424) 214-7017
nzajack@sycr.com