As we rapidly approach January 1 — the date most new employment laws that Governor Newsom signed this year become effective — the one that looms largest for all California employers is the expansion of California’s mandatory paid sick leave law, also known as the Healthy Workplaces, Healthy Families Act. To help clarify the new paid sick leave requirements, the California Department of Industrial Relations (DIR) recently released updated FAQs on changes to the law.
As previously reported, starting January 1, 2024, the paid sick leave time available to employees increases from three days or 24 hours to five days or 40 hours. Some additional changes to the existing law were also made, including how employees subject to valid collective bargaining agreements are affected as well as preempting or overriding some provisions of local ordinances enacted to provide additional sick leave in certain local jurisdictions.
While increasing the yearly allotment from three days/24 hours to five days/40 hours seems simple enough, employers encountered some unanswered questions as they attempted to update their policies and comply with the law in advance of the January 1 effective date. For example, an option employers may use to satisfy the paid sick leave requirements is to provide the required time in an up-front lump sum either every January 1 or on a specific date, like an employee’s anniversary of hire. For employers that use the hiring anniversary, their employees receive their new paid sick leave banks in the middle of the year, and employers questioned whether they had to provide additional upfront time once the expansion takes place in January. Unfortunately, that and several other issues were not addressed in the law.
In the DIR’s recently released updated FAQs, several new questions were added along with updates to previous ones — including a discussion about the exact up-front lump-sum issue described above. According to the DIR, employers may comply with the new requirements by choosing one of the following options:
- The employer has the choice to frontload the employees’ two additional days of paid sick leave on January 1, 2024; or
- Move the measurement of the yearly period to January 1, 2024, and frontload the employees’ five days.
In practice that means, for example, if an employee started working for an employer on July 16, and the employer uses that anniversary date to frontload three days or 24 hours on July 16, 2023, the employer may either:
- Provide two days or 16 hours on January 1, 2024, and keep the July 16 date to provide five days or 40 hours at that time; or
- “Reset” the frontload date to January 1, 2024, and provide the employee five days or 40 hours at that time, utilizing the calendar year as the new 12-month leave period.
Because compliance with this paid sick leave law is now subject to Private Attorneys General Act (PAGA) class action lawsuits, employers are strongly encouraged to review this guidance as soon as possible and work with legal counsel as necessary to make required updates to their paid sick leave policy.
Matthew J. Roberts, Associate General Counsel, Labor and Employment
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