AB 304: The Cure for Paid Sick Leave?

Posted on: July 23, 2015

Authored by: Adrian Hoppes, Esq., Holden Law Group

In attempt to address complications employers faced in implementing the new paid sick leave law (officially known as the Healthy Workplaces, Healthy Families Act of 2014 or AB 1522), Governor Brown signed AB 304 on July 13, 2015. AB 304 amends the paid sick leave law and takes effect immediately. We have highlighted the noteworthy changes but encourage employers to read the full bill text.

Eligibility

The amendment clarifies that to be eligible for sick pay employees must work for the same employer for 30 calendar days in California as opposed to working for any employer in California.

Pay

The amendment permits employers to elect to use either the regular rate of pay of the workweek for the paid sick leave rate or the “hourly wage” method presented in the original bill. Exempt employees are paid at the rate the employer uses to calculate wages for other forms of leaves.

Compliance Options

Alternative Accrual Method: The amendment allows an employer to elect an accrual method of their choosing as long as 1) the accrual is on a regular basis and 2) the employee will have 24 hours of sick leave available by the 120th day of either, employment, calendar year, or 12-month period.

Lump-Sum Method: The amendment explicitly allows the employer the option to use either employment year, calendar year or any 12-month period, if selecting the “front-load” method. It also clarifies an employer must provide the “full amount” at one of these intervals and defines “full amount” as 24 hours or three days. This language may preclude the ability to prorate time if an employer uses a period other than the date of employment.

Grandfather Clause: The amendment allows an employer to keep an existing policy it had in place prior to 01/01/2015 as operable and compliant if the policy: 1) Used an accrual method; 2) provided accrual on a regular basis; 3) allowed an employee to accrue 8 hours (1 day) within the first 3 months of employment; and, 4) accrued at least 24 additional hours (3 days) in the remaining nine-months of the year.

The amendment goes on to state that once an employer modifies the policy it had (has) in place the employer must then comply with the remaining parts of the new sick leave law and the policy is no longer “grandfathered.”

Reinstatement Rights

The amendment clarifies that an employer need not reinstate sick time that was paid out at the time of resignation, termination or separation.

Wage Statements

An employer that offers unlimited paid time off either in the form of sick or vacation can notate “unlimited” on the employees wage statement to meet the wage statement requirements. In addition, employers covered under Wage Order 11 or 12 are not required to comply with the wage statement notice until January 01, 2016.

It is apparent that the Legislature’s attempt to treat the malady that is AB 1522 did not provide full-recovery. Clarity may only come with continued treatment.