Attention California Employers! Soon, You Will Need To Provide Employees Five Days (Or 40 Hours) Of Paid Sick Leave (US) - Employee Rights/ Labour Relations - Employment and HR (2025)

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On October 4, 2023, California Governor Gavin Newsomsigned Senate Bill (SB) No. 616 intolaw, which expands California's mandatory paid sick leave fromthree days (or twenty-four hours) to five days (or forty hours).The increased paid sick leave requirements take effect on January1, 2024.

Background

In 2014, California enacted the Healthy Workplaces, HealthyFamilies Act of 2014 ("HWHFA"), providing Californiaemployees with paid sick leave. The HWHFA became effective on July1, 2015, and has been amended slightly throughout the years.

Under the existing law, eligible employees accrue paid sick daysat the rate of one hour per every 30 hours worked, beginning at thecommencement of employment. The HWHFA applies to full-time,part-time, and temporary workers who work for the same employer forat least 30 days within a year in California and complete a 90-dayemployment period before taking any paid sick leave. Upon the oralor written request of an employee, an employer must provide paidsick days for the following purposes:

1. Diagnosis, care or treatment of an existing health conditionof, or preventive care for, an employee or an employee's familymember; and
2. For an employee who is a victim of domestic violence, sexualassault or stalking.

The law defines "family member" to include thefollowing individuals: child, (which means a biological, adopted orfoster child, stepchild, legal ward or a child to whom the employeestands in loco parentis regardless of age or dependency status); abiological, adoptive or foster parent, stepparent or legal guardianof an employee or the employee's spouse or registered domesticpartner or a person who stood in loco parentis when the employeewas a minor child; a spouse; a registered domestic partner; agrandparent; a grandchild; a sibling; and a designated person(which means a person identified by the employee at the time theemployee requests paid sick days). An employer may limit anemployee to one designated person per 12-month period for paid sickdays.

Although these basics remain the same under SB 616, the new lawamends various provisions of HWHFA, requiring employers to revisetheir California paid sick leave policies with respect to accrual,frontloading, carryover and use caps – among other areas– to ensure compliance.

Accrual and Carryover: Under California law,accrued paid sick days must carry over to the following year anduse-it-or-lose-it policies are prohibited. However, Californiaemployers may set a threshold accrual cap, meaning that once anemployee accumulates an amount of leave that equals the"cap" amount, they stop accruing, but once they use leaveand their banked time falls below the cap, they immediately restartaccruing leave. The accrual cap also operates as a cap on theamount of unused leave employees can carry over from one year tothe next.

• Current law under HWHFA: Currently,an employee's banked, accrued paid leave may be capped at 48hours or 6 days – whichever is greater.

• Law under SB No. 616, effective January 1,2024: SB 616 increases the cap to 80 hours or 10 days– whichever is greater.

Alternative Accrual Rates: Instead of using thestandard accrual rate of one hour for every 30 hours worked,employers may use a different accrual method, as long as the methodmeets certain requirements.

• Current law under HWHFA: Currently,instead of using the standard accrual rate, the HWHFA allowsemployers to use a different accrual rate as long as employeesaccrue leave on a regular basis resulting in them having no lessthan 24 hours of accrued leave by the completion of their120^th day of employment and having that same amount bythe completion of the 120^th day in each subsequentyear.

• Law under SB No. 616, effective January 1,2024: SB 616 amends this accrual exception to requirethat, in addition, employees have accrued no less than 40 hours (or5 days) of leave by the 200^th day of employment and thatsame amount by the 200^th day in each subsequentyear.

Frontloading: Instead of accrual and carryover,the HWHFA allows employers to frontload a specific amount of paidleave each year.

• Current law under HWHFA: Currently,the law requires employers that frontload to provide 24 hours or 3days – whichever is greater.

• Law under SB No. 616, effective January 1,2024: SB 616 increases the frontload requirement to40 hours or 5 days – whichever is greater.

NOTE: Although state law allows employers to frontload leaveannually to avoid carryover, that may not be permitted undersimilar local ordinances throughout California, as some local lawsrequire employers to carry over frontloaded leave.

Timing of the Frontload Distribution: Employersthat frontload are allowed to impose a lengthier waiting period fornew hires than what the HWHFA otherwise allows when accrual is used(i.e., an 89-day waiting period).

• Current law under HWHFA: Currently,employers are allowed to provide no less than 24 hours or 3 days ofpaid leave for the employee to use by the time they complete their120^th day of employment.

• Law under SB No. 616, effective January 1,2024: Under SB 616, in addition to providing thefrontloaded 24 hours or 3 days of paid leave by the120^th day, employers must also ensure that the employeehas no less than a total of 40 hours or 5 days of paid leave(between the initial 120 day frontloading and the subsequent 200day frontloading) for the employee to use by the time they completetheir 200^th day of employment. Accordingly, this newprovision essentially allows employers to provide the frontloadedamount in a piecemeal fashion rather than provide the entire lumpsum at one time.

Use Caps: Although employers must allow accruedand frontloaded paid sick leave to carry over from year to year, anemployer may limit an employee's use of paid sick days in eachyear of employment, calendar year or 12-month period.

• Current law under HWHFA: Currently,the HWHFA allows employers to limit employees' paid leave useper year to 24 hours or 3 days, whichever is greater.

• Law under SB No. 616, effective January 1,2024: SB 616 increases the permitted annual use capto 40 hours or 5 days – whichever is greater.

Covered Employers and Employees:

• Current law under HWHFA: Currently,the HWHFA does not apply to employees covered by a valid unioncollective bargaining agreement if that agreement meets certainrequirements, such as providing paid leave and requiring bindingarbitration.

• Law under SB No. 616, effective January 1,2024: SB 616's amendments extend some of theHWHFA's protections, including the nonretaliation andprocedural protections, to employees covered by collectivebargaining agreements.

Preemption of Contradicting Local Laws: Thereare currently eight local ordinances addressing paid sick leave inCalifornia. SB 616 provides that certain provisions "shallpreempt any local ordinance to the contrary." Specifically,the new law partially preempts local California paid sick leaveordinances that have different requirements on the followingtopics: leave advances; balance notification requirements; employeenotice requirements for unforeseeable and foreseeable leave; rateof pay for sick leave; timing of such pay; and reinstatement ofleave upon rehire.

What Does SB 616 Mean for California Employers?

January 1, 2024 will be here before we know it, so employerswhose paid sick leave policies do not already meet (or exceed) SB616's requirements must review and revise their policies assoon as possible to ensure they are in compliance by the effectivedate. We will be on the lookout for additional guidance from thestate labor department as well as local jurisdictions that mustdetermine whether and to what extent their local paid sick leaveordinances are affected by SB616's partial preemption. In themeantime, please feel free to reach out to your SPB counsel shouldyou like assistance with updating your policies before January 1,2024.

The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circumstances.