California Sick Leave Law has Implications for Business

California Sick Leave Laws have Implications for Businesses California Sick Leave Law has Implications for businesses

California was the second state in the United States to require sick leave for employees. The law, signed into effect in 2015, became effective for employees on July 1, 2015. Mandatory sick leave is now a protected right for all employees in California. This applies to both full-time, part-time, contractors, temporary workers and others. In order for employees to be eligible, they must work at least 30 days in the current year. They must also satisfy a 90 day waiting period. All employers are required to provide sick leave, even small businesses. For every 30 hours that an employee works, that employee is eligible for 1 hour sick of sick leave. The hours can be rolled over to new years, but employers can pace a cap on the hours that are allowed to be rolled to 48 hours.

Employee exceptions to the California Sick Leave Law

California sick leave laws leave few exceptions for covered employees. Small businesses are held to the sick leave rules. The only exceptions to sick pay rules are found in five exceptions. Employees covered by a union contract that specifically includes a sick leave policy  and has binding arbitration. Another exception includes construction employees bound by a union contract, specific air carrier employees, certain retired annuitants. The last exception is the providers of in-home support services under certain sections of the Welfare and Institutions Code.

Employee rights to use Paid Sick Leave

State law provides for sick leave to be used for diagnostic care, treatment of illness, or preventive care. This includes both serious and short term illness. That means that employees are allowed to take sick leave for common flues and other short term illness. It allows for the employee to receive these services or to take time off to help a family member receive the services. In addition, state law also allows employees to use sick leave to obtain legal, medical, or counseling services related to domestic violence, stalking or sexual assault. It allows for the relocation to a safe place and to seek services provided by a rape crisis center or domestic abuse center. This includes both the employee’s needs and a family member’s needs. State law also defines family as a child, parent, sibling, grandparent, grandchild, spouse, domestic partner or in loco parentis. State law recognizes biological, foster, legal wards, adopted, in-law, and step relationships.

Employer rights to restrict Sick leave.

Employers are allowed to require a 90 day probation period for new employees before the sick leave is available to them. Employers are also allowed to limit sick leave use to 3 days a year or 24 hours a year. Even though employees may earn more sick leave each year, the employers are allowed to limit the actual usage of the sick leave. Employers can also require a minimum block of sick leave time that doesn’t exceed two hours. For example, an employer can require that sick leave be used in a 1 hour minimum time, but can’t require that 4 hours be used for every sick leave use. This allows employers to not have to manage sick leave time in 1 minute increments or 15 minute increments.

National Sick Leave Policy

Nationally, there are no sick leave laws requiring sick leave. However the FMLA, (Family and Medical Leave Act) require unpaid sick leave, along with job protection. for employees that meet certain requirements. This includes all California companies that have Federal contracts. Employees must have been with their employers for at least 12 months previously. Employers who have 50 employees or more within a 75 mile radius, are required to honor FMLA. Smaller employers are not required to provide FMLA leave.

Executive Order Regarding Sick Leave

In May, 2015, President Obama signed an executive order requiring mandatory sick leave to be provided by all federal contractors. This new policy requires that government contractors give employees 7 days per calendar year of paid sick leave. This includes construction companies, contracts covered under the Service Contract Act, and contracts in connection with federal lands and federal employees. The executive order takes effect on January 1, 2017. Under these provisions employees earn 1 hour of sick leave for every 30 hours worked and are allowed to rollover the sick leave. Employers are not required to payout the sick leave when the employee leaves the company and if the employee rehires within 12 months, the previously accrued sick leave is reinstated.

The executive order provides sick leave for a wide variety of situations including sickness for the employee, the employee’s immediate family and dependants. It also includes provisions for domestic violence, stalking, preventative care, counseling, relocation, legal processes for the stalking situation and other specific circumstances.

California companies are required to meet both the California Sick Leave laws and National regulations. When there are differences in definitions, and how paid time off is given, companies must comply with the most strict requirements. In regards to sick leave, the California laws are more strict than the National regulations.

Penalties for Companies that don’t comply with the California Sick Leave Laws

Companies that fail to comply with the sick leave laws face fines that range from $50 to $4,000. In addition, the employer can be required to pay a fine to the state of $50 per day. In addition, a fine of $100 is levied for each instance of violation. Under the new law, the Labor of Department and Attorney General is required to file civil suits in behalf of the employee to seek redress against the employer for missed wages, penalties, damages liquidation, attorney fees and other costs. This results in very costly expenses for employers that fail to comply with the law.

How can Payroll Providers ensure compliance with the new California Sick Leave Laws?

It is more important than ever for both large and small employers to have the tools in place that helps them track employee hours and be able to provide reporting in regards to employee hours and sick accrual. Businesses rely on software solutions from their payroll providers. Employers that wait until after a complaint or state investigation to place the proper software in place will pay thousands more in fines and penalties than companies who take steps now to ensure compliance. SwipeClock provides both the time and attendance tools and the workforce management software for employers to track and provide the reports that prove they are complying with state laws. Payroll providers need a simplistic approach of one software that can service both their small and larger corporations. SwipeClock can provide one solution for accountants that tracks and creates the reporting needed for their clients.


State of California Department of Industrial Relations. California Paid Sick Leave: Frequently Asked Questions. 2016. Retried from Web

The White House Office of Press Secretary. Executive Order – Establishing Paid Sick Leave for Federal Contractors. 7 September 2015 Retrieved on June 2016

United States Department of Labor, Sick Leave. 2016, Web. sourced June 2016.

United State Department of Labor, Paid Sick Leave for Workers on Federal Contracts. 2016. Web. Retrieved on June 2016 from

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