California's Expanded Sick Leave Law: What Employers Need to Know for 2024
The upcoming changes to California's sick leave policies, set to be effective from January 1, 2024, mark a significant expansion signed into law by Governor Gavin Newsom through SB 616. These amendments extend paid sick leave benefits to almost all employees working in California for at least 30 days within a year, aiming to enhance worker benefits and impose new obligations on employers across the state.
The main alteration is the increase in paid sick leave entitlement, escalating from three days or 24 hours annually to five days or 40 hours. This enhancement intends to offer employees more flexibility in managing health-related needs while ensuring financial stability.
For employers, several actions are crucial for compliance:
- Policy Updates: Employers need to revise sick leave policies to meet the increased hours, ensuring clear communication to employees.
- Bundled Policies: Companies using bundled policies including paid time off need to confirm they comply with or exceed the new sick leave requirements.
- Dissemination of Policies: It's essential to distribute the updated policies to all employees well in advance of the effective date.
Accrual and Lump Sum Methods
-Accrual: The standard accrual rate will remain the same at 1 hour per 30 hours worked. Employers must ensure employees accrue at least 24 hours by their 120th day of employment and the full 40-hour entitlement by the 200th day or within a designated 12-month period. Both will be earned at the same rate.
-Lump sum: choosing lump sum methods must provide a minimum of 24 hours or three days by the 120th day, with the remaining 16 hours or two days given after the 200th day. However, they can provide the full entitlement upfront, as long as it aligns with the law's provisions.
Accrual and Frontload Policy Implications
Regarding accrual and carryover policies, the rolling accrual cap has increased to 80 hours, allowing employees to carry over accrued sick leave to the next year. Employers with frontload policies must ensure the annual sick leave provided aligns with the updated requirements.
If you opt for the lump sum method, providing the entire annual leave (40 hours or five days) at the year's start exempts you from allowing carryover. Yet, the law mandates carryover if you split the lump sum leave into segments that don't offer the full amount at the year's onset, like distributing 24 and then 16 hours separately.
Local Sick Leave Rules Preemption
The revised law establishes preemption clauses, compelling localities to strictly follow state law on specific issues related to sick leave. These clauses prevent localities from implementing rules more restrictive or favorable to employees than the state law. The preemption applies to several key provisions, including the payout of unused sick leave at the end of employment, the advancement of sick days to employees that have not yet accrued, written notice requirements from employers regarding available leave, calculations for the rate of pay during actual sick leave taken by employees, notification requirements for both foreseeable and unforeseeable use of sick leave, and the timing of payment to employees for utilized paid sick leave.
As the implementation date approaches, California employers must prepare diligently for SB 616. Adherence to these revised sick leave requirements not only ensures legal compliance but also underscores a commitment to supporting employee well-being and maintaining a healthy workplace.
