California Sick Leave Law has Implications for Business

California Sick Leave Law-What it means for Business
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California Healthy Workplaces Healthy Families Act

California was the second state in the United States to require sick leave for employees. The law called the Healthy Workplaces, Healthy Families Act was signed into effect in 2015. It became effective for employees on July 1, 2015. Even so, for employers with employees throughout California and in San Francisco, San Diego, Berkeley and other cities in California, there is a myriad of sick leave laws with various requirements from State law. The purpose of this article is to provide an overview of the state law for business owners and highlight main compliance aspects of the law.

Covered Employees under CA Sick Leave Law

Mandatory sick leave is now a protected right for all employees in California. This applies to both full-time, part-time, contractors, temporary workers, and others. In Order for employees to be eligible, they must work at least 30 days in the calendar year and have satisfied a 90 day waiting period for the employer. In other words, the employee must be employed with the employer for at least 90 days and must work in the State of California for at least 30 days during a year to earn sick leave pay. All employers are required to provide sick leave, even small businesses. For every 30 hours that an employee works, that employee is eligible for 1 hour sick of sick leave. The hours can be rolled over to new years, but employers can pace a cap on the hours that are allowed to be rolled to 48 hours.

Employee exceptions to the California Sick Leave Law

California sick leave laws leave few exceptions for covered employees. Even small businesses are held to the sick leave rules. The only exceptions to sick pay rules are found in five exceptions. Employees covered by a Union contract that specifically includes a sick leave policy and has binding arbitration. Another exception includes construction employees bound by a union contract, specific air carrier employees, certainly retired annuitants. The last exception is the providers of in-home support services under certain sections of the Welfare and Institutions Code.

  • Union Employees with binding arbitration and a sick leave policy
  • Construction Employees with a union contract
  • Specific Air Carrier Employees
  • Retired Annuitants
  • In-Home Support Services Providers

Allowable Sick Leave Uses

California allows sick leave to be used for both the employee and the employee’s family member. Sick leave can be used for preventative care, diagnosis, and treatment. This includes an existing health condition, injury or for specific purposes if the employee (or family member) is a victim of domestic violence, stalking or sexual assault.

  • Employee or family member
  • Preventative Care, including annual physicals or flu shots
  • To diagnose or care for an existing health condition
  • Victim of Domestic Violence, Stalking or Sexual Assault
    • Seek medical attention caused by Domestic Violence, Stalking or Sexual Assault
    • To obtain services from a domestic violence shelter or rape crisis center
    • To obtain psychological counseling
    • To participate in safety, planning, or other actions to increase safety from future domestic violence, sexual assault or stalking, including seeking new housing.

Family Definitions under Healthy Workplaces, Healthy Families law.

Employees can take sick leave time to help care for a family member who has the allowable uses for sick leave. There are several family relationships that are allowed including children, parents, siblings, grandparents and grandchildren, and spouses or domestic partners. California recognizes biological, foster, adopted step, domestic partner’s child, and in loco parentis for child relationships. For parent relationships, California recognizes biological, adopted, foster, step and in loco parentis when the employee was a minor. Additionally, legal wards and legal guardian relationships are also recognized as family. Only biological siblings can be used for sick leave. This is different from several cities so please check our guide to the city you need guidance on. Grandparents and Grandchildren relationships recognize biological, adopted, step and foster relationships.

  • Children: biological, adopted, step, foster, legal wards & guardians, in loco parentis, and children of domestic partners
  • Parents: biological, adopted, step, foster, and in loco parentis.
  • Siblings: biological
  • Grandparents: biological, adopted, step and foster
  • Grandchildren: biological, adopted, step and foster
  • Spouse & Domestic Partner

Upfront Sick Leave Versus Accrual Method

Businesses can choose which method to award sick leave. If the employer chooses the accrual method, then employees earn 1 hour of paid sick leave for every 30 hours worked. The employer can limit the usage of sick leave to 24 hours in a year, but can only limit the accrual to 48 hours a year. This means that employees will be able to roll the additional accrued hours to the following year.

If the employer chooses to award sick leave by front-loading it at the beginning of the year, then the employer must award at least 24 hours of sick leave to the employee but doesn’t have to award additional sick leave during the year.

Probationary Periods and Minimum Usage Limits

Employers are allowed to require a 90 day probation period for new employees before the sick leave is available to them. Employers are also allowed to limit sick leave use to 3 days a year or 24 hours a year. Even though employees may earn more sick leave each year, the employers are allowed to limit the actual usage of the sick leave. Employers can also require a minimum block of sick leave time that doesn’t exceed two hours. For example, an employer can require that sick leave be used in a 1 hour minimum time, but can’t require that 4 hours be used for every sick leave use. This allows employers to not have to manage sick leave time in 1-minute increments or 15-minute increments.

Coordinating with Existing Leave Policies

Employers who already award employees Paid Time Off (PTO) sick leave, personal days, or other paid time and who meet the minimum requirements of the California Sick Leave law do not have to award additional sick leave time. Paid time off must allow for the same uses as the California Sick Leave law.

Sick Leave Bank

Employees who terminate employment but return to work within a 12 month period with the same employer must be reinstated with all of their previously accrued and unused sick leave hours to the employee. If the employee returns to work after more than 12 months have passed since employment terminated, the employee doesn’t receive any previously accrued sick leave. This is different from the San Francisco Sick Leave law, which has a series of if statements to determine if the employee receives back accrued and unused sick leave hours.

Sick Leave Notice

Employees are required to provide notice of sick leave to be taken as soon as is reasonable. California doesn’t have maximum notice requirements. Employers can have a policy that requires notification of sick leave usage, but employers cannot require sick leave notice when sick leave is not foreseeable. In emergency situations, employees should notify employers as soon as possible.

Reasonable Documentation & Notification of Sick Leave Rights

The California Healthy Families Act requires documentation from employers to ensure that the business is compliant with California law. Without adequate documentation, the business is assumed to be guilty and employees are awarded recompense. Employers must maintain documentation for a minimum of 3 years. Records must include the employee’s amount of hours worked, sick leave accrued, and sick leave usage.

Further, employers are required to notify employees of their current sick leave accrual and usage with each pay stub. The sick leave usage and accrual record can be included on the pay stub or can be issued on a separate document issued on the same day as the pay stub.

Employers are required to post a notice of employees rights under the California Paid Sick Leave Law in a conspicuous place where employees can access the information. Posters must be in English and in any language that 10% or more of the businesses employee speak. Additionally, all new employees must be notified of their rights upon hire.

Retaliation, Fines & Penalties

Retaliation is prohibited by the California Healthy Families Act. Any employee who is retaliated against, or denied sick leave can file with the Labor Commissioner. Employees are protected and have the right to file a complaint with the Labor Commissioner, cooperate in any investigation or prosecution of an alleged violation, and oppose any policy, practice, or act that is unlawful under the law.

Employers are subject to a $100 daily fine for posting violations. If sick leave is unlawfully withheld, then businesses can be subject with a fine of up to $4,000. The fine will be determined by calculating the amount of sick leave withheld from the employee and multiplying it by 3. The minimum penalty is $250 per incident. Other penalties, such as a failure to provide written notice adds up to $50 per day. This can be assessed for each person who wasn’t notified as required by law.

National Sick Leave Policy

Nationally, there are no sick leave laws requiring sick leave. However, the FMLA, (Family and Medical Leave Act) require unpaid sick leave, along with job protection. for employees that meet certain requirements. This includes all California companies that have Federal contracts. Employees must have been with their employers for at least 12 months previously. Employers who have 50 employees or more within a 75-mile radius are required to honor FMLA. Smaller employers are not required to provide FMLA leave.

Executive Order Regarding Sick Leave

In May 2015, President Obama signed an executive order requiring mandatory sick leave to be provided by all federal contractors. This new policy requires that government contractors give employees 7 days per the calendar year of paid sick leave. This includes construction companies, contracts covered under the Service Contract Act, and contracts in connection with federal lands and federal employees. The executive order takes effect on January 1, 2017. Under these provisions, employees earn 1 hour of sick leave for every 30 hours worked and are allowed to roll over the sick leave. Employers are not required to payout the sick leave when the employee leaves the company and if the employee rehires within 12 months, the previously accrued sick leave is reinstated.

The executive order provides sick leave for a wide variety of situations including sickness for the employee, the employee’s immediate family, and dependants. It also includes provisions for domestic violence, stalking, preventative care, counseling, relocation, legal processes for the stalking situation and other specific circumstances.

California companies are required to meet both the California Sick Leave laws and National regulations. When there are differences in definitions, and how paid time off is given, companies must comply with the most strict requirements. In regards to sick leave, the California laws are more strict than the National regulations.

Notification and Advanced Notice

Employees are required to provide advanced notice of sick leave use when notice can be foreseen. If employees are unable to provide advanced notice, they must notify their employer as soon as is reasonable.

Employers must post a notice of sick leave rights in the workplace. The notice must inform employees of their right to sick leave and of their right to use sick leave without discrimination or retaliation. Further, employers must inform employees of their sick leave accrual and usage limits.

It’s important to note that under the California Healthy Workplaces, Healthy Families law, if the employer doesn’t notify employee that they will be limited to sick leave usage of 24 hours a year and 48 hours of accrued sick leave, or another higher limitation, that the employer can be required to provide sick leave without a cap. The cap must be communicated! That could mean up to 9 days of sick leave if the employee works full time.

Penalties for Companies that don’t comply with the California Sick Leave Laws

Companies that fail to comply with the sick leave laws face fines that range from $50 to $4,000. In addition, the employer can be required to pay a fine to the state of $50 per day. In addition, a fine of $100 is levied for each instance of violation. Under the new law, the Labor of Department and Attorney General is required to file civil suits in behalf of the employee to seek redress against the employer for missed wages, penalties, damages liquidation, attorney fees and other costs. This results in very costly expenses for employers that fail to comply with the law.

How can employers ensure compliance with the new California Sick Leave Laws?

It is more important than ever for both large and small employers to have the tools in place that helps them track employee hours and be able to provide reporting in regards to employee hours and sick accrual. California requires that employers retain records of employee hours worked, sick leave accrual and usage for a minimum of 3 years. Yet other cities in California require a 4 year retention period. Accurate and automated records are the surest bet against violation fines and penalties.

Employers that wait until after a complaint or state investigation to place the proper software in place will pay thousands more in fines and penalties than companies who take steps now to ensure compliance. SwipeClock provides both the time and attendance tools and the workforce management software for employers to track and provide the reports that prove they are complying with state laws. Payroll providers need a simplistic approach of one software that can serve both their small and larger corporations. SwipeClock can provide one solution for accountants that tracks and creates the reporting needed for their clients.

Let SwipeClock Help

Businesses who have employees in more than one location in California will probably have to comply with multiple conflicting City ordinances defining Sick leave accrual and usage laws. Additionally, these businesses have to also comply with Federal Overtime Laws, the Family Leave Medical Act and any other national or local laws that are enacted. SwipeClock provides a comprehensive array of workforce management and time tracking tools that can help businesses to more easily stay in compliance with local and national laws. Records are effortlessly kept for years and accrual is automatically tracked and reported to employees according to the state and city laws. Additionally, with geo-timekeeping clocks, businesses can effortlessly track time worked in specific cities to ensure compliance.


State of California Department of Industrial Relations. California Paid Sick Leave: Frequently Asked Questions. 2016. Retried from Web

The White House Office of Press Secretary. Executive Order – Establishing Paid Sick Leave for Federal Contractors. 7 September 2015 Retrieved on June 2016

United States Department of Labor, Sick Leave. 2016, Web. sourced June 2016.

United State Department of Labor, Paid Sick Leave for Workers on Federal Contracts. 2016. Web. Retrieved on June 2016 from

Written by Annemaria Duran Last updated on March 14, 2017

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