We previously reported on the paid sick leave law that California passed last year. While no employer is required to provide paid sick leave to an employee until July 1, 2015 when the benefit portion of the new law becomes effective, language in the new law combined with the Labor Commissioner’s interpretation of the law have created a number of compliance obligations that occur before July 1, 2015.
First, the paid sick leave law has a posting requirement that became effective on January 1, 2015. The required poster is available on the Labor Commissioner’s web site and employers must display the poster in the workplace beginning January 1, 2015. In addition, the Labor Commissioner opined in a FAQ document published in December 2014 that the individual notice to employee at the time of hire must be provided starting January 1, 2015. The Labor Commissioner’s website contains a sample Wage Theft Protection Act notice modified to include reference to the paid sick leave available under the new law. According to the Labor Commissioner, this new Wage Theft Protection Act notice should be used for all employees hired on or after January 1, 2015.
The parameters of the employer’s obligation to provide notice to employees hired before January 1, 2015 is less clear. The Labor Commissioner has suggested that the revised Wage Theft Protection notice should also be used for employees with a date of hire before January 1, 2015, but there are actually several methods which can be used to achieve compliance with the notice requirement that do not involve using the Labor Commissioner’s revised form. Employers will want to consider which notice method is most efficient, satisfies their obligations under the law and also does not create confusion in the employee population given the employer’s existing PTO and sick leave policies.
While the new law’s goal of providing any employee who works more than 30 days in California with paid sick leave seems straightforward enough, the law raises a host of implementation and compliance issues beyond the notice issue.
For example, many employers have moved to PTO (paid time off) which is available for use as either vacation or sick leave both as a benefit for employees and to eliminate separate tracking of vacation and sick leave. These employers are typically already providing PTO that is more generous than the paid sick leave required under the law. However, employers with PTO policies will need to evaluate whether and how their PTO policy must be changed to achieve compliance with the new law and whether it would be simpler to adopt a stand-alone paid sick leave policy in addition to the PTO policy. To achieve compliance, employers using a PTO policy will need to consider the new law’s record-keeping and paystub requirements, as well as issues around eligibility for PTO, carry over, accrual and pay out at termination.
Under the new paid sick leave law, an employer is not required to cash out an employee’s paid sick leave at time of termination, however, California employers are required to payout all accrued PTO at time of termination. The new sick leave law does require an employer who reinstates an employee within one year of departure to reinstate the employee’s accrued sick leave. This requirement will result in a potential windfall for the departing employee if PTO and sick leave are not differentiated under the employer’s policy.