CA’s Mandatory Sick Leave: Six Months In, What Have We Learned?

By May 9th, 2018HR Blog

By Jennifer Jacobus, PHR-CA, SHRM-CP, SDEA

Sick EmployeeWith six months of handling and implementing California’s mandatory paid sick leave benefit under our belts, what have we learned? What would or could we have done differently?

To recap:

  • As of July 1, 2015, all employers (who were not already doing so) were required to offer three days/24 hours of paid sick leave benefits to all employees;
  • Paid sick time could be used for the employee’s own illness, that of a family member (child, spouse, registered domestic partner, parent, parent-in-law, grandparent, grandchild, or sibling), and if needed, for employees who are victims of domestic violence or sexual assault;
  • The three days/24 hours could be provided in one of two ways: it could be accrued at the rate of one hour earned for every 30 hours worked or given as a “lump sum” of three days each new 12-month benefit year

Because a Paid Time Off policy (combining both sick leave and personal/vacation time) would meet the paid sick leave requirements if implemented properly, many employers thought that their current PTO policy, or that changing their current vacation policy to a PTO policy, would meet the state’s requirements. In many situations, however, this was not the case. An issue that some employers have come up against (many without even knowing) is that while a PTO policy that allows for five days of paid time off exceeds what is required by state law, it will, in most cases, not meet the requirements because of the rate at which it accrues. In this example, a full-time employee accruing five days of PTO in a year will accrue at the rate of 3.33 hours a month, 1.66 hours a semi-monthly pay period, or .0192 hours per hour worked – this is well below that state-mandated accrual rate of “one hour for every 30 hours worked.” While we can see by this example that five days is greater than three days, the accrual rate is too slow; therefore, this policy does not meet California’s requirements.

Another struggle that some employers faced at the close of the 2015 calendar year was presented by those employees who felt “entitled” to the three days sick leave. Because under the “lump sum” method employers are not required to carry the time over and the employee would therefore lose the three days if not used, these employers were faced with a higher than usual unscheduled absentee rate in the month of December than in the past. There are a couple of options that employers have to help with this:

  1. For those employers who implemented a lump sum sick leave policy for a July-June benefit year, the start of 2016 is the time to change to an employee’s anniversary date. While this may not stop an employee’s feeling of entitlement to the three days off, it should help prevent many employees from being out of the office all during the same period of time. To make this change, employers should reset an employee’s sick leave balance to three days once the employee reaches his/her anniversary date. This might be a challenge for those employees who have an anniversary date after June 30. Employers will have to reset on July 1, then again once the employee’s anniversary date rolls around (again, for those hired in the months of July-December). As new hires come on board, their hire dates will be used and those employers experiencing issues in 2015 should see this change as we move into 2016 and 2017.
  2. Change from a traditional sick leave policy and vacation policy and combine the two into a Paid Time Off (PTO) policy. Those employers who truly feel that their employees are “just getting another three days of vacation” and that the employees will use the three days whether they are truly sick or not, are better off offering a PTO policy. While the employees will still get and take the time off, they are more likely to schedule the time in advance in order to use it for true vacation time.

There will still be bugs (although hopefully not the flu kind!) moving into the new year as employers figure out what works best for their company, their employees, and their work needs. However, just like the many other laws and regulations that we have had to comply with over the years, this law too will work itself out and will become the “norm” in no time.

For questions or assistance on your sick leave policy, call SDEA at (858) 505-0024.

Contact us: 858.505.0024