On September 10, 2014, California Governor Jerry Brown signed into law the Healthy Workplaces, Healthy Families Act of 2014. The Act applies to public and most private employers and mandates paid sick leave to workers starting on July 1, 2015. Specifically, California employees will accrue one hour of paid sick leave for every 30 hours worked, up to a total of six paid sick days per year. Because it establishes leave based on the amount of hours worked, the law will cover part-time, temporary and seasonal workers.

Employers can limit employees’ use of paid sick time to three days or 24 hours in each year of employment, even when the employees accrue the maximum of six days per year. However, employers must allow for any leftover time to carry over to the following year. Furthermore, when employment is terminated, employers are not obligated to pay out any unused sick time accrued under the Act. For those employers with a paid time off policy (i.e., paid time that can be used for sick time or for vacation), the statute’s accrual and carryover mandates do not apply to employers whose paid time off policies provide at least three days of paid time off to their employees to use for sick leave for themselves and family members.

The statute does not apply to employees covered by a collective bargaining agreement that meets specific requirements such as providing for paid sick days, binding arbitration, and regular hourly rates of pay that are at least 30 percent more than the state minimum wage rate. The Act also excludes from coverage construction workers covered by collective bargaining agreements that meet other specific requirements, as well as in-home caregivers.

Accrued sick leave may be used for the employee’s own health condition, for the health condition of a family member, or for reasons related to domestic violence, sexual assault or stalking. The statute defines “family members” broadly to include, children, parents, spouses, registered domestic partners, grandparents, grandchildren and siblings. In connection with children and parents, the Act recognizes extended family relationships such as adoptive, foster, step and legal guardians.

Employers cannot discriminate or retaliate against employees who exercise their rights under the Act, including using or attempting to use accrued sick days, as well as filing complaints or participating in investigations concerning alleged violations of the Act. An employer that takes an adverse employment action against such an employee or threatens to do so is presumed to have unlawfully retaliated against the employee. The Act grants enforcement authority to the labor commissioner, who has the power to investigate alleged violations and order relief. Relief may include reinstatement, back pay and administrative penalties. The labor commissioner or the attorney general also may file a civil action and seek legal or equitable relief, attorney’s fees and costs, and interest.

Besides the above provisions, the Act contains the following notice, posting and administrative record keeping requirements:

1. Employers must provide written notice, either on an itemized wage statement or in a separate writing provided on designated pay dates, of the amount of sick leave or paid time off in lieu of sick leave available to each employee.
2. The Act amends Section 2810.5 of the California Labor Code with the additional requirement that at the time of hire, employers must provide written notice of non-exempt workers’ paid sick leave rights.
3. Employers must have a poster in each workplace notifying employees of their rights under the Act, including the Act’s anti-retaliation provision. Employers may expect the labor commissioner to release a sample poster shortly.
4. The Act imposes a record keeping requirement that forces employers to keep records of the hours worked and accrued and used paid sick days for each employee for at least three years.

Implications for Employers

• The Healthy Workplaces, Healthy Families Act of 2014 is expansive, applying to all categories of employees, including part-time, full-time, temporary and seasonal workers. This imposes additional requirements upon employers who currently provide paid sick time and/or paid time off (PTO) to full-time workers.
• Through its administrative notice, posting and record keeping requirements, the law forces covered employers to review and revise their policies, including employee handbooks and policy manuals, wage statements, notices and postings, in order to ensure compliance with the Act.
• Employers will need to recognize a much more expansive group of individuals when employees request to use their paid sick time or PTO to care for a family member.