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Navigating California’s Paid Sick Leave Policy

Paid family leave or paid sick leave is among the hot issues this political season and, while there is a debate on whether there should be a national standard, some states, including California and several cities throughout the Golden State, have taken the matter into their hands. Unfortunately, for California employers, including manufacturers, the different regulations enacted in various cities throughout the state can be rather confusing and potentially troublesome when it comes to compliance.

CA State Regulation

In general, under the Healthy Workplaces, Healthy Families Act of 2014, which went into effect July 1, 2015, California requires employers to offer a minimum amount of sick leave to employees each year. This means employers must keep track of how much sick leave employees have accrued, report their balance every pay period, and pay employees for sick leave taken that’s within their balance. All California employees who work more than 30 days in a year qualify, including part-time and temporary employees, with some specific exceptions.

You can determine the amount of sick leave an employee is eligible for by either accruing sick leave each pay period based on hours worked, or offering employees a lump sum of sick leave hours at the beginning of each year. If you choose the accrual method, you must provide at least one hour of paid leave for every 30 hours worked. If you choose the lump sum method, you must offer at least three days (24 hours) at the beginning of the year. Sick pay is paid out at the employee’s regular hourly rate.

CA Cities Have Their Own Regulations, Ordinances

Now the tricky part: Many cities throughout the state have their own paid sick leave regulations and it’s important for manufacturing firms that have operations in different locations to be familiar with these regulations so that you remain in compliance. Moreover, if there is a conflict between a city regulation and California state law, employers should follow the requirement that is most generous to the employee.

For example, as of July 1, 2016, the City of Los Angeles requires employers with 26 or more employees to provide employees with 48 hours of paid sick leave (twice the amount required by state law).  Moreover, the City of Los Angeles has very specific requirements about the accrual methods and caps on accrual.  Under California’s state law employers are allowed to require employees to use paid sick leave in two-hour increments, but the City of Los Angeles does not permit this. So if an employee uses less than two hours the employer can only deduct the actual amount of paid sick leave used by the employee from his or her sick leave bank.  Also, while the state allows paid sick live to be taken to care for a child, parent, spouse or registered domestic partner, grandparent, grandchild, or sibling, the City’s law also allows employees to use paid sick leave to take care of “any individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.” Who is someone with the “equivalent” of a family relationship?

Another example of variances in state and city family sick leave laws is in San Diego. The San Diego Ordinance provides greater benefits to employees. It does not allow an employer to impose a maximum accrual cap on sick leave (which CA state law allows), and it also allows employees to accrue a minimum of use 40 hours of sick leave in a 12-month period (as opposed to three (3) days or 24 hours under state law). There also is no express exemption for employees covered by a collective bargaining agreement, unlike the California state paid sick leave law. Generally, the San Diego Ordinance provides that eligible employees are entitled to accrue one hour of paid sick leave for every 30 hours worked in the city. Unused, accrued leave must be carried over from year to year. Employees begin accruing paid sick leave on the first day of employment, and may use sick leave on the 90th day of employment (same as state law).

These are just two examples illustrating how complicated and confusing paid sick leave regulations can be for California manufacturing firms, especially if you operate in multiple locations throughout the state where different city ordinances are in force. Other cities with paid sick leave ordinances include San Francisco, Oakland, Emeryville and Santa Monica. It isn’t possible for us to go through the ins and outs of each city ordinance and compare them with state law here. We have, however, provided a chart created by law firm Fox Rothschild LLP, which does exactly this. You can download the chart here.

To ensure compliance in the cities in which you operate, be aware of the various paid sick leave laws that may apply to your employees. Also, consult with an attorney to confirm that your paid sick leave policies are indeed in compliance, particularly in light of recent legislation that has been passed in cities across the Golden State. In addition, be sure to update your employee handbooks and policies, if necessary, to reflect any new requirements.

Precision Manufacturing Insurance Services (PMIS) is committed to the success of the manufacturing industry throughout California, providing insurance products and services designed to protect you against various risks and help you with safety and HR-related issues. For more information about our programs and services, please contact us at 855.910.5788.

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