Employment Law Update
December 2014
Coming in 2015:
Mandatory Paid Sick Leave
O
INSIDE THIS ISSUE:
Mandatory Paid Sick Leave
- Eligibility
- Accrual, Caps, Use
1
n September 10, 2014, Governor Brown signed the
Healthy Workplaces, Healthy Families Act of 2014—Paid
Sick Leave Bill (AB 1522). This new law provides workers with a minimum of three paid sick days per year. California’s
new sick leave law takes effect January 1, 2015. However, the right
to accrue and take sick leave under this law does not take effect until July 1, 2015. The different dates are a result of the general effective dates of new legislation (on January 1 following enactment of
the law) and the way the law was drafted making some of its provisions operative on a specified date (July 1, 2015). Both the qualifying periods that determine which employees are eligible for paid
sick leave and the employee notice required by Labor Code 2810.5
become effective on January 1, 2015, but the law provides that entitlement does not begin until July 1, 2015.
- Alternative Policies
2
- Qualifying Purposes
- Pay and Tracking
3
Beginning on July 1, 2015, California employers
- Required Notice
4
must provide employees with one hour of paid sick
leave for every 30 hours worked.
Additional 2015 Laws
- Labor Contracting
- Employee Wages
- Marriage
- Retaliation
- Civil Rights Waivers
- Discrimination:
Abusive Conduct
- Unpaid Interns
- Prevailing Wages
Employment Law
Compliance Check-Up
Employee Eligibility
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7
An employee who works at least 30 days within a year in
California, including part-time, per diem, and temporary employees,
are covered by this new law with some specific exceptions. Providers of publicly-funded In-Home Supportive Services (IHSS) are exempt. Temporary employees of a staffing agency are covered by
the new law. Therefore, whoever is the employer or joint employer
is required to provide paid sick leave to qualifying employees. Employees covered by collective bargaining agreements with specified
provisions are exempt, as are individuals employed by an air carrier
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Legal Update
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as a flight deck or cabin crew member, if they receive compensated time off at least equivalent to the
requirements of the new law.
An employee is entitled to use (take) paid sick leave only after meeting the qualifications for paid
sick leave and accruing enough paid sick leave time to use for one of the stated purposes of the law. An
employee qualifies for paid sick leave by working for an employer on or after January 1, 2015, for at
least 30 days within a year in California and by satisfying a 90 day employment period (which works
like a probationary period) before an employee can actually take any sick leave. If an employee work
less than 30 days in California within a year, the employee is not entitled to be paid sick leave under this
new law. The 90 day period works like a probationary period. Although an employee begins to accrue
paid sick leave on July 1, 2015, or the employee’s first day of employment if hired after July 1, 2015, if
the employee works less than 90 days for an employer, the employee is not entitled to take paid sick
leave.
Accrual, Caps and Use of Paid Sick Leave Benefits
Starting July 1, 2015, employees will earn at least one hour of paid
leave for every 30 hours worked. That works out to a little more than eight
days a year for someone who works full time. Accrual is based on the number of hours an employee works; the amount carried over to the next year
may be subject to a cap if the employer establishes a cap by policy. Employees can carry over unused
sick leave from one year to the next. But an employer can limit or cap the amount of sick leave an employee may accrue to 6 days or 48 hours. Also, employers can limit the amount of paid sick leave employees can take in one year to 24 hours (three days). Because paid sick leave accrues beginning on
July 1, 2015 or the first day of employment if hired after July 1, 2015, the 12 month period will vary by
hire date for those employees hired after July 1, 2015. Therefore, the measurement will mostly be
tracked by the employee’s anniversary date. An employer may elect to advance sick leave to an employee before it is accrued, but there is no requirement for an employer to do so under this law. The
new law requires that employers separately track sick leave accrual and use.
Alternative Employer Paid Time Off Policies
The new
law establishes a minimum requirement, but an employer can provide sick leave through
its own plan (such as PTO) or establish different plans for different categories of workers. Employers
may use their existing policies so long as the specific policy complies with the minimum requirements of
the law. If an employer provides a policy which exceeds the minimum requirements, including providing a specific cap, the policy must be clear as to the additional terms that apply to their employees. Each
plan must satisfy the accrual, carryover, and use requirements of the law or put the full amount of leave
into an employee’s leave bank at the beginning of each year in accordance with a PTO policy. There(Continued on page 3)
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fore, the full amount of accrued leave must be available to the employee at the beginning of the 12
month period. An employer need not have a separate sick leave policy, as long as the employer
has a paid leave policy that satisfies the same purposes required by the new law and must provide
no less than 24 hours or three days of paid sick leave for an employee to use each year. For initial
hires, however, the employee must still meet the 90 day employment requirement prior to taking
any paid sick leave.
Qualifying Paid Sick Leave Purposes
An employee can take paid leave for the employee’s or a family member’s preventive care
or care of an existing health condition or for specified purposes if the employee is a victim of domestic violence, sexual assault or stalking. Family members include the employee’s parent, child,
spouse, registered domestic partner, grandparent, grandchild, and sibling. Preventive care would
include annual physicals or flu shots. For partial days, an employer can require the employee to
take at least two hours of leave, but otherwise the determination of how much time is needed is left
to the employee. Employers must permit the employee to use the paid sick leave upon an oral or
written request, and the law forbids requiring an employee to find a replacement as a condition for
using leave. If the need is foreseeable the employee must give reasonable advance notice, but
where the need is unforeseeable the employee need only give notice as soon as practicable.
Payment and Tracking
An employee must be paid for qualifying sick leave benefits at his or her
regular hourly rate. If pay fluctuates - for example, if paid by commission or
piece rate - the employer will divide the total compensation for the previous 90
days by the number of hours worked and pay the qualifying sick days at that rate.
If an employee separates his or her employment, the employee cannot cash out unused sick days,
like the employee can with vacation and paid time off, unless the employer’s policy provides for a
payout. Employers must show, on the pay stub or a document issued the same day as the
paycheck, how many days of sick leave are available. Employers also must keep records showing
how many hours are earned and used for a period of three years. This information may be stored on
documents available to employees electronically.
The new law requires that an employer provide payment for sick leave taken by an employee no later than the payday for the next regular payroll period after the sick leave was taken. This
does not prevent an employer from making the adjustment in the pay for the same payroll period in
which the leave was taken, but it permits an employer to delay the adjustment until the next payroll.
For example, if an employee did not clock in for a shift and therefore were not paid for it but utilized paid sick leave, the employer would have to pay no later than the following pay period and
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Legal Update
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account for it in the wage stub or separate itemized wage statement for that
following regular pay period.
Required Notice to Employees
Beginning January 1, 2015, employers are required to post in a conspicuous place at the workplace, a poster containing the following information: (1) that an employee is entitled to accrue, request, and use paid sick
days; (2) the amount of sick days provided for and the terms of use of paid
sick days; (3) that retaliation or discrimination against an employee who requests paid sick days or uses
paid sick days or both is prohibited; and (4) that an employee has the right under this law to file a complaint with the Labor Commissioner against an employer who retaliates or discriminates against an employee. The Labor Commissioner has developed such a poster, and it is now available on the Labor
Commissioner’s website.
Second, after January 1, 2015, employers are required to provide most employees with an individualized Notice to Employee (required under Labor Code section 2810.5) that includes paid sick
leave information. A revised Notice to Employee form (available to employers for download at
DLSE’s website) must be used for employees hired after January 1, 2015, and is optional for use prior
to the January 1, 2015 effective date. Use of the revised form prior to January 1, 2015, will be
deemed compliant with the new requirement as of January 1, 2015; otherwise, for employees hired prior to January 1, 2015, the employer is required to provide a revised Notice to Employee or otherwise
inform each employee of the information regarding paid sick leave within 7 days of the change, using
any of the alternative methods specified in Labor Code section 2810.5(b)
The revised Notice to Employee form has a check box to inform an employee of an employer’s
own policy that meets or exceeds the requirements of the new law. Although the notice requirements of
Labor Code section 2810.5 do not apply to employees who are exempt from the payment of overtime,
employees who are exempt from the payment of overtime are covered by this new paid sick leave law.
Practice Tip: Review policies, including PTO and ensure that at a minimum, employees are provided at least 3 paid days annually. Employers may be more generous and provide a greater number of days than required. To avoid misinformation or
misunderstanding regarding an employer’s specific paid leave policy, employers are
encouraged to ensure that employees are made fully aware of the terms and conditions of their specific policy which provides any additional paid sick leave terms.
NOTE: The IRS has not yet released the standard mileage rates for 2015 yet. The rates are typically updated in December for the following year. So we expect the IRS to release the standard
mileage rates for 2015 shortly.
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Additional Significant New Laws for 2015
Labor Contracting: Client Liability (AB 1897)
AB 1897 extends liability for wage, Cal/OSHA, and workers’ compensation violations to companies using contracted labor from staffing agencies and other labor contractors. The bill aims to address the increasing use of long-term temporary workers in place of regular employees by creating joint
liability for the labor contractor and the company using temporary labor. Practical Tip: When working with any vendor, including staffing companies, it is prudent to review the vendor’s legal compliance measures, service contract terms, and secure adequate insurance, among other measures.
Employees: Wages (AB 1723)
Labor Code 1197.1 authorizes the Labor Commissioner to issue a civil penalty for failure to pay
less than the minimum wage, including restitution and liquidated damages. AB 1723 amends section
1197.1 to authorize the Labor Commissioner to also include in such citations “waiting time penalties”
for willfully failing to timely pay the wages of a discharged employee or an employee who has resigned.
Recovery of Wages: Liquidated Damages (AB 2074)
In response to the California Court of Appeal decision, Bain v. Tax Reducers, Inc., AB 2074
amends Section 1194.2 of the California Labor Code to allow an employee who alleges minimum wage
violations to file suit for liquidated damages any time before the expiration of the statute of limitation
on the underlying minimum wage action. As a result of this bill, California workers will have a threeyear statute of limitations on liquidated damages claims for failure to pay minimum wage.
Marriage (SB 1306)
SB 1306 updates language in the California Constitution regarding marriage, a year after the
Supreme Court of the United States cleared the way for same-sex marriage in California. The terms
“husband and wife” and “unmarried man and unmarried woman” will be changed to “spouses” and
“two unmarried people,” respectively. The change updates the language in the state constitution to be
consistent with state law. Practical Tip: This law does not directly impact California employers that
already extend equal rights to same-sex married couples.
Retaliation (AB 2751)
AB 2751 follows legislation enacted last year, prohibiting among other things employers from
using immigration status to retaliate against workers who exercise their rights under the California Labor Code. The new law requires that the $10,000 civil penalty under AB 263 be paid directly to the employee or employees who faced the illegal retaliation, instead of the state.
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Civil Rights: Waiver of Rights (AB 2617)
AB 2617 prohibits the pre-dispute waiver of certain civil rights provided by the Ralph Civil
Rights Act (Civil Code 51.7) and the Tom Bane Civil Rights Act (Civil Code 52.1). Generally, these
civil rights acts prohibit hate violence and threats against citizens based on certain protected classes,
such as political affiliation, sex, race, color, religion, ancestry, national origin, disability, medical condition, or on account of position in a labor dispute. This new law imposes limits on pre-dispute arbitration agreements and pre-litigation settlement agreements, as they may apply to the two civil rights acts.
Harassment: Unpaid Interns (AB 1443)
AB 1443 extends the protections of California’s Fair Employment and Housing Act to unpaid
interns. The law prohibits employers from subjecting unpaid interns to discrimination and/or harassment based on a protected characteristic. Under AB 1443, an employer may also be liable for harassment of an unpaid intern by a nonemployee if the employer knew or should have known of the conduct
and failed to take immediate and appropriate corrective action. Practical Tip: This new anti-harassment
category should be added to company policies and incorporated into harassment prevention training.
Interns should be advised of their rights and instructed to complain about any misconduct to a designated company representative.
Employment Discrimination or Harassment: Education and Training: Abusive Conduct (AB 2053)
AB 2053 amends section 12950.1 of the Government Code to require additional training for
supervisors. California employers with 50 or more employees are required to provide harassment prevention training to supervisors. Under the new law, the training must also include training and education on the prevention of “abusive conduct” or bullying. Abusive conduct may include “repeated infliction of verbal abuse, such as the use of derogatory remarks, insults, and epithets, verbal or physical
conduct that a reasonable person would find threatening, intimidating, or humiliating, or the sabotage
or undermining of a person’s work performance.” Practical Tip: This new training topic can be incorporated into the existing two-hour training obligation. Along with the training, employers may choose
to formulate policies discouraging such misconduct, and describing how a victim may seek assistance.
Public Works: Prevailing Wages: Contractor’s Costs (AB 1939)
Current law requires that contractors and subcontractors performing work on publicly funded
construction and maintenance projects to pay their workers minimum prevailing wage rates and to
comply with other apprenticeship and recordkeeping obligations. Contractors and subcontractors are
liable for violations of prevailing wage laws. AB 1939 adds section 1784 to the California Labor Code
to allow contractors to bring an action to recover from the hiring party that the contractor directly contracts with, any increased costs such as the difference between the wages actually paid to an employee
and the prevailing wage for the project, among other costs. /
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Employment Law Compliance Check-Up
I
f your organization has not conducted an annual audit of its employment
practices and procedures, now is the perfect time for a check up. To ensure
that your company is not acting unlawfully and placing itself in financial
harms way, since even one wage and hour violation can be costly to any sized
company, and significantly jeopardize the continuing stability of smaller businesses, answer the following questions to determine whether a legal audit is in order:
• We have a legally reviewed handbook updated with new State and Federal laws.
Yes
No
• We have the 2015 Federal and State posters displayed in our workplace.
Yes No
• We understand the new Paid Sick Leave Law.
Yes No
• We have valid I-9s for every one of our employees.
Yes No
• We are aware of the new revised hiring form pursuant to Labor Code §2810.5(b).
Yes No
• We have written job descriptions for every position.
Yes No
• We know how to handle a State Unemployment dispute and appeal.
Yes No
• We know during the hiring process what questions are illegal to ask.
Yes No
• We understand how to explore accommodations and handle a disability/ADA claim.
Yes No
• We have a formal anti-harassment policy and annually conduct employee training.
Yes No
• We understand the prior 2012 obligations for commissioned employees.
Yes No
• I am aware of meal and break time requirements and have currently valid policies.
Yes No
Practice Tip: If you responded “No” to any of the above questions, your organization could be facing
exposure to legal claims by employees and/or governmental agencies that could be easily avoided.
Ms. Koumas is the founder of Koumas Law Group. She has extensive experience in labor law compliance and employment litigation.
Her practice focuses on the defense of employers in various settings,
including but not limited to, administrative claims filed with the Labor Commissioner, the Department of Fair Employment and Housing
(DFEH), the Equal Employment Opportunity Commission (EEOC),
and the Employment Development (EDD). She also represents the
interests of employers and management in litigated matters, which
include wage and hour issues, wrongful termination, sexual harassment and discrimination claims. Ms. Koumas can be reached at (619)
682.4811 or via email, [email protected].
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The articles presented herein are intended as a brief overview of the law and are not intended to substitute as legal advice. Any
questions or concerns regarding any statute or case law should be addressed to a licensed attorney. Copyright © 2007-2014 by
Koumas Law Group. All rights reserved.