California legislature enacts changes and clarifications to paid sick leave law

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As anticipated, the California legislature has attempted to clean-up some loose ends left by the original paid sick leave law (AB 1522) which took effect on July 1st. Although these changes may ultimately create some additional questions, it does provide clarity in some areas where employers were left guessing. Moreover, these changes provide some additional options and flexibility for certain elements of compliant policies. Here are some highlights:

Further Defined Eligibility Requisites

Only employees who have worked in California for the same employer for 30 or more days within a year of hire are eligible for paid sick leave. Some have previously believed that only employees who worked for the current employer for 30 or more days before July 1 were eligible, however, the plain language of the law makes eligible for sick leave pay any employee employed for 30 or more days within one year of being hired by the current employer.

Additional Flexibility in Accrual Options

Employers can use their own individual accrual method as an alternative to the method set forth in the law, as long as their method provides for accrual on a regular basis and the employee accrues no less than 24 hours of paid leave by the 120th calendar day of employment, or each calendar year, or 12-month period. As such, employers may now have paid sick leave policies allowing for accrual of leave time based on occurrences other than hours worked, such as a fixed accrual allotment per month, which is a common accrual method for vacation policies.

Annual Increment Options for Usage Cap

Regarding the 24 hour or 3 day cap that employers may institute on the use of paid sick leave, these changes clarify that this limit may be applied per year of employment, calendar year or 12-month period.

Minimum Requirements for Grandfathered Policy

If an employer had an existing paid sick leave or PTO policy in effect prior to January 1, 2015 that (1) provides paid sick leave or PTO accrual on a regular basis so that an employee (including employees hired after January 1, 2015) receives no less than one day or 8 hours of accrued leave within 3 months of employment each calendar year, or each 12-month period, and (2) the employee is eligible to earn at least 3 days or 24 hours of sick leave/paid time off within 9 months of employment, it is grandfathered in. But if the employer modifies that policy, the modified policy must comply with the law’s requirements otherwise in effect.

Reinstatement of Leave Upon Rehire

Closing a loophole that existed regarding sick leave policies incorporated within PTO policies, the changes state that on rehiring an employee within one year from the date of separation, the employer is not required to reinstate accrued paid time off to an employee who was paid out for their unused time off at their separation from employment.

Notification Requirements for Unlimited Sick Leave Policies

For employers who provide unlimited time off for sick leave, these changes clarify their wage statement notification obligation by providing that such employers will be compliant if they indicate on the wage statement that the available sick leave is “unlimited.”

Calculating Pay For Time Off

Employers now have an additional option for calculating the amount of pay for time spent on sick leave by non-exempt employees, including employees with differing hourly pay rates, commission employees, piece rate employees and non-exempt salaried employees. Specifically, now employers may use either of these calculation methods for non-exempt employees:

  1. Pay is calculated in the same manner as the regular rate of pay for the workweek in which the employee uses paid sick leave, whether or not the employee actually works overtime in that work week. This method may be simpler for payroll departments who are already using the regular rate calculation to figure overtime pay.
  2. Pay is calculated by dividing the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 day of employment.

Calculation of pay for exempt employees is now specified as the same pay calculation that the employer uses for other forms of paid leave time.


The above summary does not describe every change enacted for this law. Employers are advised to have their individual policies reviewed by counsel for legal compliance including any changes in existing policies pursuant to the above-described amendments.