Paid Sick Leave: Coming to a Town Near You

You are likely familiar with the Healthy Workplace Healthy Family Act of 2014 (“AB 1522”), which entitles California employees to use at least 24 hours of paid sick leave per year and caps accruals at 48 hours.  However, you may not appreciate that, since then, at least seven California cities have enacted their own paid sick leave ordinances, offering employees in those cities even more paid sick leave than the State statute.  Those cities include:  San Francisco, Oakland, Emeryville, Los Angeles, San Diego, Santa Monica, and Berkeley.  Indeed, you should not assume that because you’re complying with the California statute that you’re out of the woods.

Below are important differences between AB 1522 and the various municipal ordinances.  As a guiding principal, if there is a conflict, AB 1522 will prevail, unless the municipal ordinance is more favorable to employees (e.g., higher accrual cap, etc.).

The takeaway from the local laws summarized below is that employers who do business in different parts of the state are subject to a checkerboard of compliance mandates regarding paid sick leave and must be able to track these benefits on different levels in different cities.  This is not an easy task unless the employer elects to take the most stringent of these laws; i.e., the ones more favorable to the employee, and apply them across the board to its entire California workforce.  Even this approach has its challenges in that it is not always clear which laws would be considered more favorable.  The extent to which of these laws will add to what already is a fertile ground for wage and hour litigation in this state remains to be seen.

California Healthy Workplace Healthy Family Act of 2014:  By way of background, AB 1522 became effective on July 1, 2015.  It applies to employers of all sizes and employees who work at least 30 days in California for a particular employer.  Covered employees accrue paid sick leave in a lump sum/front-load or at the rate of one hour for every 30 hours worked.  Accrual starts on the first day of work and is capped at 48 hours or 6 days (whichever is more generous to the employee) at any given time.  Accrued, unused paid sick leave will carry over into the next year, subject to the accrual cap.  Employees covered by a collective bargaining agreement that explicitly provides for paid sick leave, among other things, are excluded from the statute.

Under the statute, employees are entitled to use up to 24 hours or 3 days (whichever is more generous to the employee) of accrued paid sick leave per year.  Employees are first entitled to use paid sick leave on their 90th calendar day of employment.  Permitted uses are either for: (1) medical needs of the employee or the employee’s family member (i.e., child, parent, spouse or registered domestic partner, grandparent, grandchild, or sibling); or (2) purposes related to domestic violence, sexual assault, or stalking suffered by the employee.  Employers may not require usage in larger than 2 hour increments or require a doctor’s note or other documentation for covered leave.  Employees are required to provide reasonable notice for any foreseeable need to use paid sick leave.  If the need is unforeseeable, the employee must provide notice as soon as practicable.

After an employee takes paid sick leave, employers must: (1) pay non-exempt employees at either their regular rate or by looking back 90 days and dividing total wages (excluding overtime premium) by the number of hours worked or; (2) pay exempt employees by the same method as any other form of paid leave time provided by the employer.  Employers are not required to cash out accrued, unused paid sick leave upon separation.  However, if an employee is rehired within one year from the separation date, any previously accrued and unused paid sick leave must be reinstated and can be used immediately upon rehire.  Employers must maintain records regarding usage and accrual of employee’s paid sick leave for at least 3 years.  Employer posting and notice requirements are listed in the statute.

Finally, there is a rebuttable presumption of retaliation if an employee suffers any adverse employment action within 30 days of the employee filing a complaint with the Labor Commissioner, cooperating with an investigation or prosecution of a violation, or opposing a policy, practice or act prohibited by the statute.

Below are important differences between AB 1522 and the various municipal ordinances.

San Francisco:  This Ordinance was among the first in the State.  It applies to anyone who is employed in the geographic boundaries of San Francisco, excluding employees covered by a collective bargaining agreement that clearly and explicitly waived some or all of the Ordinances’ benefits or those who work in the City for not more than 55 hours in a calendar year.

Notably, the Ordinance caps accrual at 72 hours, but does not include a cap on usage.  Effective January 1, 2017, its permitted uses will include bone marrow or organ donation by the employee or a family member, in addition to those provided by the State statute.  It also expands covered family members to include a “designated person.”

In another departure from AB 1522, San Francisco employers may not require usage in larger than 1 hour increments.  However, employers may require a doctor’s note or other documentation for a paid sick leave absence exceeding 3 consecutive work days, a doctor’s appointment, or where there is a pattern or clear instance of abuse.

Additionally, the Ordinance defines reasonable notice for a foreseeable need for paid sick leave as at least 2 hours before the start of a shift, except for accidents, emergencies, or sudden illnesses.  Also, employers must maintain records regarding usage and accrual of employee paid sick leave for at least 4 years.

Regarding retaliation, there is a rebuttable presumption that any employee who suffers adverse action within 90 days of exercising his/her rights under the Ordinance was retaliated against for exercising that right.

Los Angeles:  This Ordinance applies to any employee who: (1) performs at least 2 hours of work within the geographic boundaries of Los Angeles in a particular week; (2) is entitled to minimum wage under California law; and (3) works in the City for the same employer for at least 30 days within a year from the start of employment.  Notably, there are no coverage exclusions for this Ordinance.  (Note:  Los Angeles has enacted a separate ordinance regarding paid sick leave for hotel workers.)

Although the permitted uses are the same as AB 1522, the Ordinance expands covered family members to include individuals related by blood or affinity whose close association with the employee is the equivalent of a family relationship.

Additionally, Los Angeles employees are entitled to use up to 48 hours of paid sick leave in a particular year.  Accruals are capped at 72 hours.  Any unused paid sick leave, including front-loaded, will carry over year-to-year, subject to the accrual cap.  Los Angeles employers may also require a doctor’s note or other documentation for absences after the employee has exhausted their paid sick leave entitlement under AB 1522.

Similar to the San Francisco law, Los Angeles employers must maintain records regarding usage and accrual of employee paid sick leave for at least 4 years.  There is also a rebuttable presumption that any employee who suffers adverse action within 90 days of exercising his/her rights under the Ordinance was retaliated against for exercising that right.

San Diego:  This Ordinance applies to any employee who: (1) works at least 2 hours in the geographic boundaries of San Diego in a particular week and (2) is entitled to minimum wage under California law or participates in a California Welfare-to-Work Program.  Exclusions to the Ordinance apply for short term and youth employment programs and employees who are paid a sub-minimum wage under a specific license.

This Ordinance allows employees to use up to 40 hours of paid sick leave in a year, capping accrual at 80 hours.  Unlike the State statute, which allows employees to use paid sick leave on the 90th day of employment, San Diego employers may limit the use of paid sick leave until the 91st day of employment.

In addition to the uses provided under AB 1522, San Diego employees may use paid sick leave when the employee’s place of business or his or her child’s care provider or school is closed due to a public health emergency.  Although the Ordinance provides that non-exempt employee using paid sick leave are paid at their regular rate, it does not provide for the 90-day looking back rate provided by the State statute.

Additionally, San Diego employers may require a doctor’s note or other documentation for absences exceeding 3 consecutive work days.  The Ordinance also limits “reasonable notice” for foreseeable needs for paid sick leave to 7 days.

Similar to San Francisco and Los Angeles, there is a rebuttable presumption that any employee who suffers adverse action within 90 days of exercising his/her rights under the Ordinance was retaliated against for exercising that right.

Oakland:  This Ordinance applies to anyone who: (1) works at least 2 hours in the geographic boundaries of the City in a particular week and (2) is entitled to California’s minimum wage.  Exclusions apply to employees covered by a CBA containing a clear and explicit waiver of some or all of the Ordinance’s benefits.

Unlike AB 1522, Oakland employees are entitled to accrue up to 72 hours of paid sick leave, with no cap on annual use.  The Ordinance restricts use beyond that permitted by AB 1522 (i.e., 24 hours or 3 days) to only the medical need of the employee or the employee’s family member.  Additionally, the Ordinance does not provide for front-loading, only accrual.

Similar to San Francisco, the Ordinance provides that Oakland employers may not require usage in larger than 1 hour increments and may require employers to provide at least 2 hour notice before the start of a shift for foreseeable needs for paid sick leave.  Additionally, employers may require documentation for a paid sick leave absence exceeding 3 consecutive work days or to verify a subsequent absence where abuse is suspected.

Unlike most other cities, the Ordinance provides that employees using paid sick leave must be paid in one of the following manners: (1) non-exempt hourly employees shall be paid at their regular hourly rate; (2) non-exempt salaried employees shall be paid at a rate calculated by dividing the annual salary by 52 weeks, and dividing that amount by the number of hours the employee is regularly schedule to work up to 40 hours; and (3) exempt employees are paid at a rate calculated in the same manner as non-exempt salaried employees, except that if the exempt employee’s regular work week is less than 40 hours, the calculation must divide the weekly salary by the number of hours worked during a regular work week.  Additionally, there is a rebuttable presumption of retaliation for any adverse employment action suffered within 120 days of an employee exercising his/her rights under the Ordinance.

Santa Monica:  Effective on January 1, 2017, this Ordinance applies to anyone who: (1) works at least 2 hours in the geographic boundaries of the City in a particular week and (2) is entitled to California’s minimum wage.  Exclusions apply to employees covered by a CBA containing a clear and explicit waiver of some or all of the Ordinance’s benefits and to employees of government agencies.

Unlike AB 1522, the Ordinance provides up to 72 hours of accrued paid sick leave with no cap on annual use.  Any accrued, unused paid sick leave carries over year-to-year, unless it was front-loaded.  Additionally, there is a rebuttable presumption that any employee who suffers adverse action within 90 days of exercising his/her rights under the Ordinance was retaliated against for exercising that right.

Emeryville:  This Ordinance applies to anyone who: (1) works at least 2 hours in the geographic boundaries of the City in a particular week and (2) is entitled to California’s minimum wage.  Exclusions apply to employees covered by a CBA containing a clear and an explicit waiver of the Ordinance’s benefits.

In a departure from AB 1522, the Ordinance caps paid sick leave accrual at 72 hours, but it does not cap annual use.  Also, the Ordinance does not provide for use related to domestic violence, sexual assault or stalking, but does permit employees to use paid sick leave to provide care for a guide dog, signal dog or service dog of the employee or a family member.

Similar to Oakland, there is a rebuttable presumption of retaliation in Emeryville for any adverse employment action suffered within 120 days of an employee exercising his/her rights under the Ordinance.

Berkeley:  The paid sick leave feature of this Ordinance goes into effect on October 1, 2017.  The Ordinance applies to anyone who: (1) works at least 2 hours in the geographic boundaries of the City in a particular week and (2) is entitled to California’s minimum wage or is a Welfare-to-Work program participant.  Exclusions apply to employees covered by a CBA containing a clear and explicit waiver of the Ordinance’s benefits.

Unlike AB 1522, the Ordinance caps accrued paid sick leave at 72 hours.  It limits use of paid sick leave for employees of employers with fewer than 25 employees to 48 hours, but does not limit use for employees of larger companies.  Notably, paid sick leave cannot be used for reasons related to domestic violence, sexual assault or stalking.

Similar to San Francisco and Oakland, the Ordinance expands the definition of covered family members to include a designated person.  Also, the Ordinance provides that employees who use paid sick leave are paid at their hourly wage or a calculation looking back 90 days and dividing total wages (excluding overtime premium) by the number of hours worked if the employee earned wages at multiple rates during that period.

In another departure from AB 1522, Berkeley employers are expressly allowed to require a doctor’s note or other documentation and may verify that the paid sick leave was used for a permitted purpose, but cannot require an employee to incur documentation or verification expenses exceeding $15.  Additionally, the Ordinance does not include a record-keeping requirement.  However, an employee’s account of their paid sick leave entitlement is presumed accurate in the absence of employer-maintained records.

Finally, there is a rebuttable presumption that any employee who suffers adverse action within 90 days of exercising their rights under the Ordinance was retaliated against for exercising that right.

Jonathan Turner is a partner in the Los Angeles office of Mitchell Silberberg & Knupp LLP. A significant portion of his practice is in the motion picture industry, where he has represented studios and other employers in labor arbitrations, administrative proceedings, court litigation, union avoidance issues, and collective bargaining negotiations. For more info about Jonathan, click here.
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