California Employee Paid Sick Leave

In 2015, California began requiring employers to provide paid sick leave to employees. California’s sick pay rules require employers to allow employees to accrue one hour of sick time for every thirty hours worked.  Employers can limit employees from taking more than 24-hours of sick time per year. In San Diego, employers are required to offer employees 40 hours of paid sick leave per year. The employer may choose to provide a lump sum of paid sick time at the beginning of the year or require employees to accrue 1 hour of paid sick leave for every 30 hours worked.  There are several ways that employers can incorporate this obligation into existing vacation/sick policies:  
  1. No vacation/PTO:

Some employers do not offer any vacation or PTO (paid time off) policy.  These new laws do not impose any new obligations, and employers are not required to offer vacation or PTO to employees.  If you do not have a vacation/PTO policy, then you simply need to provide a compliant sick pay policy.
  1. Separate Vacation / Sick Leave Policies:

An employer may offer separate paid vacation and paid sick hours.  An advantage to separating vacation and paid sick leave is that an employer is not required to pay an employee for accrued paid sick leave hours upon termination. All unused paid vacation time is considered a wage and must be paid upon termination.  Many employers have reduced the number of vacation hours offered to offset the sick days.  We typically recommend that, if you have a separate vacation and sick pay policy, you consider providing the sick pay in a lump sum rather than using the accrual.  Having separate vacation and sick pay accruals can lead to errors.
  1. Single PTO Policy:

Some employers prefer to offer a combined paid time off policy. Such a policy encompasses both sick time and vacation.  In order to comply with the paid sick leave laws, the paid time off policy must be at least as favorable as paid sick leave. This means that San Diego employers must offer at least 40 hours of PTO per year with an accrual rate of at least 1 hour for every 30 hours worked. Exempt employees are assumed to work 40 hours per week under the paid sick law. Employers with employees in multiple states may prefer this method to streamline their paid time off policy. This also helps avoid the conflicting accrual concerns mentioned in the previous section.  The drawback to a single PTO policy is that PTO is considered a wage, which means that an employer is required to compensate an employee for all unused PTO upon termination of employment. -Sam G. Sherman, Esq. TencerSherman specializes in employment law. Please contact Sam@TencerSherman.com to create a paid sick policy appropriate for your business or for any other employment needs.
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