California Paid Sick Leave – Two Methods of Compliance

As you may already know, the Healthy Workplaces/Healthy Families Act of 2014 (California Paid Sick Leave) went into effect January 1, 2015.

While the accrual of paid sick leave does not begin until July 1, 2015, employers need to determine which method of compliance their company will adopt right away.

The Accrual Method

Using the accrual method, employees accrue 1 hour of paid sick leave for every 30 hours worked.  Employers can limit the annual accrual to 48 hours (or 6 days) and may elect to cap the paid sick usage to 24 hours (or 3 days), the balance would carry forward.  Accrual begins on July 1, 2015 for current employees and on the start date for all future employees.

Advantages of the Accrual Method:

  • Employers who have temporary, part-time, or seasonal employees may choose this method to reduce the amount of paid sick leave accrued.

Disadvantages of the Accrual Method:

  • Full-Time employees will accrue a larger amount of paid sick leave, or the cap of 48 hours if employer chooses to limit annual accrual. (Employers may elect to cap the paid sick used to 24 hours per year).

The Frontload Method

Using the frontload method, employers can choose to “frontload”, or provide all employees with the minimum required 24 hours (or 3 days) at the beginning of each calendar year, anniversary date, or other 12-month basis, hours would not carry forward to following years.

Advantages of the Frontload Method:

  • Ease of recordkeeping: employers would not be required to track accrual based on hours.
  • Confidence in compliance
  • Employers who have full-time employees would not be concerned about larger amount of hours accrued.

Disadvantages of the Frontload Method:

  • Employers are committing themselves to paying 24 hours (or 3 days) per year or other 12-month basis to each employee, regardless of full, part, or temporary status.

The law is not clear on whether employers will be able to use existing paid time off plans to meet the sick leave requirements, our research and consultation with HR professionals has led us to feel confidant only in the above mentioned methods.  Regardless of the method you use, these are the things all employers need to be doing right now:

  1. Determine the sick leave policy and method of accrual your company will adopt
  2. Distribute notice 2810.5 to all employees hired after January 1, 2015 and to all current employees by July 1, 2015.
  3. Display compliant poster where all employees can see / have access
  4. Draft or amend your policy and prepare to distribute to all employees by July 1, 2015.
  5. Work with your payroll provider on compliant recordkeeping and wage statement requirements
  6. Develop a strategy for out-of-state employees working in California frequently

Labor laws can be confusing, but non-compliance could be costly and catastrophic to your business, get started today on your strategy for meeting all of the requirements of the Healthy Workplace/Healthy Families Act of 2014.

For more information please refer to the Division of Labor Standards Enforcement (DLSE):

Download Poster & Notice 2810.5 here:

Healthy Workplaces/Healthy Families Act of 2014 Poster

Notice 2810.5