CALIFORNIA S PAID SICK LEAVE LAW NO GET WELL CARD FOR EMPLOYERS

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1 CALIFORNIA S PAID SICK LEAVE LAW NO GET WELL CARD FOR EMPLOYERS BONNIE GLATZER, ESQ. PAUL LYND, ESQ. APRIL 8, 2015

2 BACKGROUND First paid sick leave mandate with San Francisco s Proposition F in 2006 Other cities enacted ordinances Connecticut first state to require paid sick leave Several proposals in California led to AB 1522 s enactment in September 2014 Oakland adopted sick leave ordinance by initiative in November 2014; San Diego ordinance on hold Massachusetts will be third state, with law also effective on July 1, 2015.

3 THE NEW PAID SICK LEAVE LAW Assembly Bill 1522 Healthy Workplaces, Healthy Families Act of 2014 Mandates most California employers provide paid sick leave Requires at least 24 hours or three days of paid sick leave Protections for employees who use sick leave New recordkeeping and wage statement requirements Law is unclear, but Labor Commissioner gave some new guidance

4 DON T BE IN DENIAL: THE LAW APPLIES TO YOU! Paid sick leave requirement applies generally Applies to anyone employing another under any appointment or contract of hire It covers any employee who works in California for 30 or more days within a year from the commencement of employment. The law does not require any minimum number of employees or minimum number of hours worked per week, nor any general industry exemption. Yes, the law applies to part-time, temporary, and seasonal employees.

5 WHO IS EXEMPT? Exemptions are very narrow: (1) Collective bargaining agreement providing for paid sick days, with final and binding arbitration; (2) Construction industry union contracts entered into before 2015 and that waive the law; (3) In-Home Supportive Services (IHSS) workers; and (4) Airline flight deck and cabin crew employees. If you are not within one of these exceptions, the new law covers your employees.

6 WHAT IF WE ALREADY HAVE SICK LEAVE OR PTO? Some employers already have sick leave policies. Other provide Paid Time Off (PTO) that covers vacation and sick leave. Are we set? No! Employers still need to make sure that their policies have required terms, that they cover all employees, and that they comply with the notice and posting requirements. Regardless of whether employers have an existing policy, most every employer will have some steps to take.

7 WE LL JUST LET OUR TEMP OR STAFFING AGENCY DEAL WITH IT... GUESS AGAIN Many employers have labor through a temp or staffing agency. These individuals will be covered, with either their agency or the client liable (both may be liable as joint employers). Assembly Bill 1897, effective January 1, 2015, expands liability for wage violations to businesses that use labor from contractors (new Labor Code section ). Existing law, in Labor Code section 2810 imposes liability in some industries for a contract where entity knows or should know contract does not have sufficient funds to comply with law.

8 WHEN IS THE LAW EFFECTIVE? Most people have operated on the assumption that the entire law is not effective until July 1, Bill states that employees entitled to paid sick days beginning July 1, 2015 Bill is somewhat unclear, with argument made that some sections effective on January 1, 2015 Labor Commissioner reads law as effective on January 1 for qualifying period and employee notice, but that accrual and right to use sick leave does not begin until July 1 Labor Commissioner provided draft notice and poster

9 WHAT SICK LEAVE MUST BE PROVIDED? At least 24 hours or three days per year, with two ways possible: Accrual method: Employee accrues one hour for every 30 hours worked. Exempt employees accrue based on a 40-hour workweek. Accrual must begin on July 1, 2015, or, if hired afterward, on the first day of employment. Granting sick leave up front: Grant 24 hours or three days of sick leave each year. Avoids tracking accruals, but leave possibly could be used immediately. Part-time employees: Law does not provide for pro-rating and granting less sick leave.

10 CARRYING OVER UNUSED SICK LEAVE Under accrual method, unused sick leave must carry over into the next year. Employer using accrual method may impose a cap on accrual of 48 hours and six days. Any cap should be written into the employer s policy. With granting leave up front, however, employer does not have to carry over unused leave to the next year. In all cases, employer only has to let an employee use up to 24 hours or three days of sick leave in a year, even if employee has a larger sick leave balance.

11 USE OF SICK LEAVE Sick leave may be used for (1) diagnosis, care, or treatment of a health condition, or (2) for victims of domestic violence, sexual assault, or stalking to obtain treatment or relief. Sick leave may be used not only for employee, but also to care for certain family members. Family members include child or stepchild regardless of age, parent, spouse, state-registered domestic partner, grandparent, grandchild, sibling, and parents-in-law through spouse or state-registered domestic partner. Separately, kincare law remains in place.

12 WHEN CAN AN EMPLOYEE USE SICK LEAVE? Employee may use accrued or available sick leave after 90 days of employment, even though accrual begins on law s effective date. Labor Commissioner reads this period as subject to a January 1 effective date, so employee may meet qualifying period by July 1 date. Employee should provide reasonable advance notification of need for leave not always possible. Law does not address medical notes or verification. Employee may set minimum period for use, but not less than two hours.

13 EMPLOYEE PROTECTIONS Employer cannot deny right to use available sick leave. Employer cannot discharge, threaten to discharge, discriminate against, demote, suspend, or take other adverse action against employee for using or attempting to use sick leave. Unclear if these protections apply to all sick leave or only the 24 hours or three days per year required Employers should review policies to impose any automatic discipline or points for absences or excessive absences, and be careful with any discipline for absences.

14 PAYING SICK LEAVE Employer must pay by payday for the next pay period. Pay for sick leave shall be the employee s hourly wage. It gets complicated if the employee has been paid differently or had more than one hourly rate in past 90 days, was paid on commission or piece rate, or was a non-exempt salaried employee. In those cases: Divide the employee s total wages, not including overtime premium pay, by the total hours worked in the full pay periods of the prior 90 days of employment. Salaried exempt employees? Probably 40-hour week.

15 WHAT HAPPENS AT THE END OF EMPLOYMENT Vacation and PTO have to be cashed out. New law expressly says that unused sick leave does not have to be cashed out. Yet, the end of employment may not mean that unused sick leave goes away: If employee rehired within one year from the date of separation, any previously accrued and unused paid sick days shall be reinstated! Reinstated paid sick days likely could be used immediately.

16 ITEMIZED WAGE PAYMENT STATEMENTS California s many requirements for itemized wage payment statements just got more complicated. Now, wage payment statements must show the amount of available paid sick leave or PTO. Alternatively, employer may provide a separate writing on the designated payday showing this information.

17 RECORDKEEPING New law requires that employees keep records of all paid sick leave accrued and used. Law says records should be kept for three years. Four years is recommended because claims may have a four-year limitations period under Unfair Competition Law. What if employer does not keep records? A lack of required records means that the law presumes employee entitled to maximum number of hours accruable, despite any previous sick leave use.

18 REVISED WAGE DISCLOSURE NOTICE Since 2012, California has required employers to provide employees with a wage disclosure notice. New law added requirement that notice say that an employee may accrue and use sick leave; may not be terminated or retaliated against for using or requesting the use of accrued paid sick leave; and has a right to file a complaint against an employer who retaliates. Labor Commissioner has provided revised template of wage disclosure notice, with options. Available on Labor Commissioner s website:

19 REVISED WAGE DISCLOSURE NOTICE

20 NEW PAID SICK LEAVE POSTER The new law requires another new poster for employers walls. The Labor Commissioner released the new sick leave poster. Available on Labor Commissioner s website: Good idea to post now.

21 NEW PAID SICK LEAVE POSTER

22 CONSEQUENCES OF NON-COMPLIANCE Employee can file a Labor Commissioner claim for not providing paid sick days, or for retaliation.. Civil lawsuit also possible Not providing paid sick days as required: Liable for dollar value of sick days x 3, or $250, whichever is greater, up to $4,000 per employee. For other harm, a civil penalty of up to $50 per day that a violation occurred or continued, up to $4,000. Labor Commissioner also can recover costs of investigation, with $50 per employee per day that a violation occurs or continues.

23 LOCAL ORDINANCES REMAIN IN EFFECT Law does not pre-empt local sick leave ordinances. Currently, San Francisco and Oakland have them. Employers must comply with both state law and local ordinance.

24 SF SICK LEAVE LAW (EFFECTIVE 2/5/07) Accrual Employees who work in SF begin accruing paid sick leave 90 calendar days after first day of work. Accrue one hour of paid sick leave for every 30 hours worked in SF. Small employers (fewer than 10 employees) accrual cap is 40 hours. All employees (not only those who work in SF) count when determining employer size. Large employers (10 or more employees) accrual cap is 72 hours. Sick leave does not expire; it carries over from year to year.

25 SF SICK LEAVE LAW (EFFECTIVE 2/5/07) (CONT D) Use of Paid Sick Leave Employee s own illness, injury, or medical treatment. To care for family member or designated person when ill, injured, or receiving medical care Designated Person If employee does not have a spouse or registered domestic partner, may designate one person (e.g., a friend or neighbor) for whom the employee may use paid sick leave to provide aid or care.

26 SF SICK LEAVE LAW (EFFECTIVE 2/5/07) (CONT D) Additional Employee Rights and Employer Responsibilities Employer must post notice regarding employee paid sick leave rights. Employers must maintain records for fouryears. Employees who assert their rights to paid sick leave are protected from retaliation. Employees who are denied their rights may file a complaint with SF Office of Labor Standards Enforcement. Do not need to pay out unused accrued sick leave upon termination, unless you are using a PTO plan, which must be paid out upon termination.

27 SF SICK LEAVE LAW (EFFECTIVE 2/5/07) (CONT D) Limited CBA Exception Law does not apply to employees covered by a bona fide collective bargaining agreement (CBA) to the extent the law s requirements are expressly waived in the CBA in clear and unambiguous terms.

28 OAKLAND SICK LEAVE LAW (EFFECTIVE 3/2/15) Employees accrue one hour of paid sick leave for every 30 hours worked in Oakland. May accrue up to nine days (72 hours) of sick leave small employers with fewer than 10 employees may cap accrual at 40 hours of paid sick leave. [All employees - including those who work outside of Oakland count.] Employees are eligible to accrue sick leave if they work at least 2 hours per week in Oakland. Accrual and eligibility for use of paid sick leave began on March 2 for existing employees.

29 OAKLAND SICK LEAVE LAW (EFFECTIVE 3/2/15) (CONT D) Employees hired after March 2 begin accruing immediately, but are not eligible to use accrued time until after 90 days of employment. May use sick leave to care for yourself, for a family member, or designated person (Like SF ordinance). Can require MD note if employee is absent for three or more consecutive days, but if employee did not otherwise seek medical care during absence, employer must pay costs in excess of $5.00. Same CBA exception as SF

30 OAKLAND SICK LEAVE LAW (EFFECTIVE 3/2/15) (CONT D) Must retain records for at least 3 years Must provide written notice of employee rights in all languages spoken by at least 10% of the employees

31 WHAT TO DO? Review existing policies and practices now. Make revisions now to existing policies to comply with the law. If you do not provide sick leave, prepare and implement a policy now. In all cases, decide whether you want a policy that complies with the minimum of the law or you want to go further. Prepare or revise policies as appropriate. Comply with notice and posting requirements. Comply with wage statement requirements now.

32 PRESENTER Experienced trial litigator and labor contract negotiator Bonnie Glatzer Partner, Labor and Employment Nixon Peabody LLP San Francisco, CA Lead counsel in jury trials involving alleged sexual harassment, sex, race and disability discrimination, wrongful termination, and breach of employment contracts; bench trials involving discrimination, trade secrets, and labor injunction issues; summary judgments obtained in race discrimination, age discrimination, sexual harassment, wrongful termination, and breach of employment contract cases; arbitrations involving military service discrimination, sexual orientation harassment, wrongful termination, labor contract interpretation, and discipline issues; and numerous mediated and negotiated settlements in lawsuits involving the full range of labor and employment issues. Advise and represent clients before the NLRB and numerous administrative agencies.,,

33 PRESENTER Paul Lynd, Esq. Partner, Labor and Employment Nixon Peabody LLP San Francisco, CA Focus on employment litigation and advising management on all aspects of labor relations. Represent a diverse group of clients in litigation in federal and state courts, as well as before administrative agencies General employment matters, with an emphasis on wage and hour issues. Provide advice and strategy, development and revisions of policies and plans, litigation prevention and defending employers in individual claims and class actions. Published California and federal decisions on important wage and hour issues involving bonus plans and class certification issues.

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