The deadline to implement California’s sick leave law was only 2 weeks ago and already we have a new law enacted to fix a few of the law’s ailments.
We’re not talking about a cure but it’s a little better. I’m not going to write about every change or option the new law includes but have covered the areas that may affect many of you.
Providing paid sick leave
We now have 4 accrual options and 1 front-load option. If you have part-time employees, the original method is likely still the best for you. The payroll companies set up the original accrual in their systems to be 0.03334 hours of sick leave for each hour worked (which equals 1 hour of sick leave for every 30 hours worked). You now have other accrual options as long as employees will have accrued 24 hours by their 120th day of employment.
Reinstatement of sick leave upon rehire
The original law stated that any earned, unused sick leave at the time of termination had to be reinstated if you rehired that employee within a year. This made PTO policies worrisome. Since you have to pay out earned, unused PTO upon termination, there were concerns you might have to reinstate the whole balance you had previously paid out. The new law states time that was previously paid out upon termination does not have to be reinstated if the employee is rehired.
Plans effective 1/1/2015
For those of you who opted to update your sick leave and PTO plans at the beginning of 2015, you aren’t being forced to change them now if your plans meet certain requirements: employees have 1 day of sick leave available within 3 months of hire and they have the whole 24 hours available within 9 months.
Recordkeeping
Originally you were supposed to keep any sick leave-related documentation for 3 years. The new law isn’t completely clear but seems to say you don’t need to ask or record why the sick leave is being taken. You still need to keep payroll records showing when time was used and the accruals for 3 years.
Paying for sick leave
Previously, you needed to run a calculation if an employee used sick leave and his/her pay in the previous 90 days had included commissions or piece-rate pay. Now you have a choice of calculations… I know, you were hoping the calculation would disappear but no such luck. You can still do the original calculation, which divided total monies earned by the total hours worked (not including OT hours) over the previous 90 days.
The other calculation possible uses “regular rate,” which is not just the employee’s hourly rate of pay. Regular rates are calculated just for the week the employee takes sick leave by including most forms of pay for the week and dividing by the hours worked. Regular rates have always been used in the past to determine true overtime rates when an employees receives compensation other than base hourly pay.
This latest law doesn’t fix all the issues of the original law. It will take more time to identify the remaining holes in both of these laws. Meanwhile, for most of you, it’s a little too late because you already put your policies in place. I wouldn’t recommend any changes this plan year unless something in the new law really makes a difference in how you want to manage your sick leave.
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