Hello everybody. I had in mind to publish this “new sick leave law” article for AOA members in the April 2015 edition of this magazine. But then I had second thoughts, being concerned that many readers would laugh it off as an April Fool’s joke.
In order not to mislead anyone, it now appears in this March issue of AOA Magazine. I assure you that it is no joke ─ and if you are a California employer, it is likely to make you sick.
The New Sick Leave Law
Beginning July 1, 2015, every employer must provide his, her or its employee who works in California for 30 days or more per year with paid sick days. Those 30 days of work do not need to be continuous for the law to apply.
Such sick days will accrue at a rate of no less than one hour for every 30 hours worked. Therefore, an employee who works in California for 90 hours out of the year would accrue three hours of paid sick leave.
However, some good news is that the employer may limit the employee’s use of paid sick days to 24 hours or three days in each year of employment.
The new law applies only for California workers because it is enacted under California, not Federal, legislation.
Can you guess the official name of the new law? (Try guessing before reading further.) Did you guess, “The California Sick Leave Law?” Nope. As a political euphemism, instead of entitling the legislation as “The Sick Leave Law” or something like that, the official name picked by the State Legislature is “The Healthy Workplaces, Healthy Families Act of 2014.” Misleading isn’t it? After all, what employer would dare say it is against healthy workplaces and healthy families?
The California sick leave law applies to all employers regardless of the number of employees that they hire. (Of course, there has to be at least one employee.) That means that even if the employer has just one employee, the employee is entitled to paid sick days in accordance with the legislation. There is no exemption for small employers.
The State Legislature carved out a few exceptions as to categories of employees who are not covered under the new legislation. These are employees covered by collective bargaining agreements, employees providing in-home support service pursuant to certain sections of the California Welfare and Institutions Code, and certain individuals employed by an air carrier, such as a flight deck operator (e.g., pilot or co-pilot) and an aircraft cabin crew member.
Under the Act, a covered employee is entitled to use accrued paid sick days as early as his 90th day of employment. Accrued but unused paid sick days carry over to the following year of employment.
Unlike vested vacation pay, an employer is not required to provide paid sick leave to an employee for unused sick days after termination, resignation, retirement or other separation from employment. However, if the separated employee is rehired by the employer within one year from the date of separation, previously accrued but unused sick days are automatically reinstated.
The new law also provides that the employer may “lend” paid sick days to an employee in advance of accrual, at the employer’s discretion and with proper documentation.
Sick leave must be paid out at the employee’s hourly wage. If the employee is paid by commission or piece rate, or otherwise has a variable hourly wage, or is a non-exempt salaried employee, then the rate of pay is calculated by dividing the employee’s total wages (not including overtime premium pay) by the employee’s total hours worked in full pay periods in the prior 90 days of employment. Payment for sick leave must be made no later than the payday for the next regular payroll period after the sick leave was taken.
The breadth of paid sick leave is broad. Sick leave may be used for the diagnosis, care or treatment of an existing health condition of, or preventative care for, an employee or an employee’s family member. “Family member” includes a child, spouse, registered domestic partner, parent, grandparent, grandchild, or legal guardian of the employee.
While, the new statewide law establishes minimum requirements, it does not preempt or limit other applicable laws that may provide greater sick leave benefits, such as San Francisco’s paid sick leave ordinance.
Also, bear in mind that the sick leave Act has nothing to do with “Obamacare,” which is officially known as “The Affordable Care Act.”
Required Written Documentation
Effective July 1, 2015, The Healthy Workplaces, Healthy Families Act of 2014 mandates that each employer at the time of hiring must provide the employee with certain written notices, documentation, and information which include the following:
- The rate of pay; whether the pay is by the hour, shift, day, week, salary, piece, commission, or otherwise
- Rates of overtime
- Allowances, if any, claimed as part of the minimum wage, including lodging allowances[Think: Resident Managers who are given free or reduced rent as a credit against the wages to which they would otherwise be entitled]
- The regular paydays designated by the employer
- The name of the employer even if acting under a “dba” name
- The physical address of the employer’s main office or principal place of business;
- The employer’s telephone number
- The name, address and telephone number of the employer’s Workers’ Compensation insurance carrier
Numerous penalties may be imposed on the employers who violate the sick leave law, including the following: A civil penalty of up to $100.00 per offense; the dollar amount of paid sick days withheld to the employee multiplied by 3, or $250.00, whichever is greater, but not exceeding $4,000.00; administrative penalties of $50.00 per day, but not exceeding $4,000.00 in the aggregate; penalties to the State of California of an amount up to $50.00 per day if the violation is prosecuted by the Labor Commissioner; attorney’s fees incurred by the Labor Commissioner or the California Attorney General if either files a civil action in court; and so on.
One redeeming feature of the Act relative to penalties is that an employer is not to be assessed any penalty for a violation due to an isolated or unintentional payroll error or an inadvertent mistake regarding the accrual or available use of paid sick leave.
In order for proper paid sick leave to be verified and penalties to be calculated, employers must retain for at least three years records documenting the hours worked and paid sick days accrued and used by each employee. The employer must make such records available to the employee for inspection, upon request.
Because the law is so new, questions concerning its application will undoubtedly arise throughout 2015. Unfortunately, until our courts and administrative agencies provide additional guidance, some of those questions will be difficult to accurately answer.
What is important to remember is that starting July 1, 2015, virtually every employee working in California will be entitled to receive paid sick days during each year of employment.
With respect to resident apartment managers, owners and management companies should review each of their Resident Manager Agreements to be certain that they contain the proper legalese to comply with, or at least not violate, the new sick leave law. Almost all agreements drafted prior to 2015 should be modified, as well as most agreements prepared in 2015 which have not taken into account the new Act. Remember, resident managers are employees, not independent contractors, and therefore will begin accruing paid sick leave starting as of July 1, 2015.
Dale Alberstone is a prominent litigation and transactional real estate attorney who has specialized in real property law for the past 38 years. He has been appointed to periodically serve as a judge pro tem of the Los Angeles Superior Court and is a former arbitrator for the American Arbitration Association. He also testifies as an expert witness for and against other attorneys who have been accused of legal malpractice.
Mr. Alberstone has been awarded an AV rating from Martindale-Hubbell. An AV rating reflects an attorney who has reached the heights of professional excellence and is recognized for the highest levels of skill and integrity. You may Google “Dale S. Alberstone” for further background.
The foregoing article was authored on February 2, 2015. It is intended as a general overview of the law and may not apply to the reader’s particular case. Readers are cautioned to consult an advisor of their own selection with respect to any particular situation.
Questions of a general nature are warmly invited. Address correspondence to Dale S. Alberstone, Esq., ALBERSTONE & ALBERSTONE, 1900 Avenue of the Stars, Suite 650, Los Angeles, California 90067. Phone: (310) 277-7300.