California Legislature Issues Urgency Amendments to Paid Sick Leave Law
Only 12 days after California’s paid sick leave law took effect (AB 1522), the legislature amended the law to address some of its more challenging implementation aspects for employers. The significant amendments include:
Alternate Accrual Method
AB 1522 required that employees accrue paid sick leave at a rate of one hour for every 30 hours worked. The amendments permit employers to use a different accrual method as long as hours accrue on a regular basis and employees accrue at least 24 hours of sick time or other paid time off by their 120th day of employment each calendar year (or other 12-month basis).
30 Days of Employment With Same Employer
Amendments to AB 1522 clarify that an employee must work at least 30 days for the same employer within the previous 12 months to be eligible to accrue paid sick leave with that employer.
Calculation of Paid Sick Leave
The amendments to AB 1522 resolve one of the most challenging aspects of the law for employers – how to calculate sick leave pay for employees with fluctuating pay rates (employees who receive commissions, piece rate, etc.). Under AB 1522, employers were required to divide an employee’s total pay within the last 90 days by the total hours worked to calculate the hourly rate for paid sick leave. The amendments simplify this calculation. For exempt employees, employers may now use the same rate of pay used for other forms of paid leave. For nonexempt employees, employers may use the same rate of pay used for calculating overtime.
AB 1522 required employers to inform employees of their accrued sick leave on either the employee’s paystub or a separate writing. The amendments now allow employers who provide unlimited paid sick leave to satisfy this requirement simply by indicating “unlimited” on the particular document.
Reinstatement of Sick Leave Balance Not Required
Employers are not required to pay accrued unused sick leave when an employee is terminated. However, for employers who combine paid time off and sick leave, an employee must be paid for his or her accrued paid time off at the time of termination. The amendments provide that if an employee is paid out for sick leave at the time of termination, but returns to work for the same employer within a 12 month period, the employer does not need to reinstate the employee’s sick leave balance.
Under AB 1522, employers must record and keep records of hours worked and sick time accrued and used for a period of 3 years. The amendments clarify, however, that an employer is not required to ask for or record the purpose for which an employee uses sick leave.