California's Paid Sick Leave Increases in 2024
As we near the new year, several legal changes are on the horizon. We've posted this blog about new California sick leave mandates ahead of our typical end-of-year client update to ensure you have ample time to evaluate and implement the required changes by January 1, 2024. Specifically, California employers will want to ensure a smooth transition by adjusting accrual rates in their handbook and Human Resources Information System (HRIS) or Payroll System. Please read on for more information.
Introduction
California's Senate Bill 616, scheduled to be enforced beginning on January 1, 2024, builds upon the groundwork established by the 2014 Healthy Workplaces, Healthy Families Act, aiming to fortify workers' rights by enhancing sick leave provisions. This legislation places an emphasis on the crucial need for paid sick leave, especially in times of illness, caregiving responsibilities, or preventive health measures such as vaccinations.
A Glimpse into California's Current Paid Sick Leave Requirements
The Healthy Workplaces, Healthy Families Act of 2014 introduced a mandatory paid sick leave policy for California employers of all sizes. Under this law, employees who worked for an employer for 30 or more days were entitled to accrue one (1) hour of paid sick leave for every 30 hours worked. Employers had the choice to cap accrual at 48 hours, with a limit of three (3) days or 24 hours to use within a 12-month period. Alternatively, employers could frontload or give upfront the three (3) days or 24 hours of sick leave in a 12-month period with no carryover.
SB 616: Changes to Paid Sick Leave Benefits
As of January 1, 2024, SB 616 introduces additional paid sick leave benefits in California. Employers must offer five (5) days or 40 hours of paid sick leave instead of three (3) days or 24 hours. Here's a breakdown of the requirements for employers:
Accrual Method Compliance:
For employers utilizing an accrual system for paid sick leave, a minimum of 24 hours or 3 days of accrued sick leave or paid time off must be made available by the 120th calendar day of employment, annually, or within each 12-month period.
By the 200th calendar day of employment, annually, or within each 12-month period, a minimum of 40 hours or 5 days of accrued sick leave or paid time off must be provided.
Accrual and Carryover Caps:
Employers retain the right to cap the accrual of paid sick leave. However, the cap increases from six (6) days or 48 hours to ten (10) days or 80 hours.
Similarly, a cap of ten (10) days or 80 hours also applies to the amount of paid sick leave an employee can carry over from one year to the next.
Upfront Grant Option:
Employers who choose to offer an initial allocation of five (5) days or 40 hours upon hiring and at the start of each pre-defined 12-month period are exempt from the requirement of providing accrual or carryover allowances.
Next Steps:
Employers are advised to acquaint themselves with the latest requirements to guarantee adherence and foster a healthy, productive work environment. The following are three crucial measures to prepare for compliance with the new regulations:
1. Revise new hire packets to include the updated Notice to Employee mandated by Labor Code section 2810.5. As of today, the form has not been modified to align with SB 616.
2. Review and amend handbook policies to confirm that sick leave or Paid Time Off (PTO) policies align with the stipulations of SB 616. It is recommended that employers also check local and city requirements along with SB 616 when revising these policies.
3. Verify that your Human Resources Information System (HRIS) or Payroll System has been updated to reflect your policies accurately and that balances are duly presented on employee pay stubs.
As a reminder, core provisions of The Healthy Workplaces, Healthy Families Act of 2014 remain unchanged, including but not limited to the specified purposes for sick leave, protection against retaliation, and compensation for the time used at the regular rate of pay.
Please reach out to your THRM HR consultant for support.