Payroll Company | Cloud Payroll Pros Inc. | Highland, CA
· This applies to temporary, part-time and full-time employees.
· Paid sick leave accrues at the rate of one hour per every 30 hours worked (i.e. an employee who works 40 hours per week accrues 1.33 hours per week).
· Sick leave is paid at the employee's current rate of pay.
· Accrued paid sick leave must carry over to the following year and may be capped at 48 hours (or 6 days) based on the employer's policy. Usage
· Employees may begin using accrued sick leave on the 90th calendar day of employment. · An employee may use paid sick leave for:
o Themselves or a family member for the diagnosis, care, or treatment of an existing health condition or preventive care.
o Specified purposes for an employee who is a victim of domestic violence, sexual assault, or stalking.
· Employer may limit use at 24 hours or 3 days per year.
· Employees need to be notified prior to implementation (see attached forms).
· Employer may lend paid sick days to an employee in advance of accrual. Alternative to Accrual
· Employer can provide 24 hours or 3 days at the beginning of each calendar year, on the employee's anniversary date (i.e. after twelve months from hire date).
o Employer won't need to track accrual but will need to track and display usage on wage statement or other written document (i.e. check stub). Under this method, employer is not required to provide for carryover of sick leave. 6 Steps to Successful Compliance
1. Display poster on paid sick leave where employees can read it easily. Document policy and share with staff (see attached).
2. Provide written notice to individual employee at the time of hire with paid sick leave information (see attached).
3. Provide for accrual of one hour of sick leave for every 30 hours worked for each eligible employee to use.
4. Allow eligible employees to use accrued paid sick leave upon request or notification.
5. Show how many hours of sick leave an employee has available. This must be on a pay stub or a document issued the same day as a paycheck.
6. Keep records showing how many hours have been earned and used for three years.
Paid Time Off (PTO)
· Employers may offer more time and usage than provided in Paid Sick Leave provision, but not less.
· PTO policy must be in writing.
· PTO Plans will be found compliant if they provide both the same hours for usage AND for the same purposes as outlined in Paid Sick Leave provision.
Sick Leave Pay
· Same as hourly rate.
· If an employee is paid commission or piece rate, then divide the total compensation for previous 90 calendar days by the number of hours worked and pay this rate.
For example:
· Employee was paid a piece rate of $0.36 per square foot for 16,500 square feet during the 400 hours of work in a 90 day period. He earned $5,940.
o His hourly rate for paid sick leave is $5,940/400 hours = $14.85 per hour.
· Employee is paid commissions only. In a 90 day period, she worked 480 hours and earned $9,000.
o Her hourly rate for paid sick leave is $9000/480 hours = $18.75 per hour.
Local Ordinances
· Employer will comply with both the local and California laws.
· Employer will have to provide the more generous provision or benefit to an employee, where they differ between local and state laws.
· In some areas, such as the City and County of San Francisco for example, there are separate ordinances requiring paid sick leave. If the provisions of the local ordinance require more accrued sick leave, that provision would take precedence as it is more generous. For employers in the City and county of San Francisco, there is a higher rate of accrued sick leave.
Separation
· An employer is not required to pay out unused accrued paid sick days at the time of termination, resignation, or retirement.
· If an employee is rehired within one year, previously accrued and unused paid sick days shall be reinstated.
· If Employer has a separate PTO plan, a final payout of PTO is due at separation.
Protection from Retaliation
· Paid Sick Leave law protects employees who:
o use sick leave
o file a complaint with the Labor Commissioner's Office
o allege a violation of these rights
o cooperate in an investigation or prosecution
o oppose a policy or practice prohibited by this article Retaliation Prohibited · Prohibits an employer from:
o denying an employee the right to use paid sick leave
o discharging (terminating)
o threatening to discharge
o demoting
o suspending
o discriminating against an employee There is a REBUTTABLE presumption of unlawful retaliation if the employer acts in a manner described above within 30 days of the employee's request for leave or other protected activity. Possible Retaliation Damages · If an employer takes any of the prohibited actions, the employee may be awarded
o Reinstatement (if terminated)
o Lost wages (if suspended or terminated)
o Removal of any disciplinary action from personnel file
o A civil penalty of up to $10,000 per violation ·
Employer may also be required to post a notice to employees about the retaliation.
An Employee May File a Paid Sick Leave Claim Against employers who:
· Unlawfully withhold payment for use of accrued sick days
· Fail to provide a statement of accrual of sick leave
· Fail to accurately track accrued sick leave
· Require an employee to use a full day or half day absence for any use of sick leave. However, an employer may require a minimum of 2 hours for each use of paid sick leave
· Deny payment for sick leave if the employee fails to provide prior notice for an unforeseen illness
· Require the worker requesting sick leave to find a replacement to cover his scheduled shift or assignment
· Deny sick leave due to a failure to provide details Administrative Penalties May Be Awarded
· An employee need only assert that the sick leave was for a covered purpose in general terms
· An employee may recover
o An administrative penalty equal to the paid sick leave x 3 or $250 whichever is greater, but in no case greater than an aggregate penalty of $4,000.
o The administrative penalty may also include a sum of $50 per day for each day the violation occurred or continued.
Administrative Penalty Example
· Employee earns $12.50 per hour and works 8 hours per day for $100 per day
o Employee was denied 3 days of accrued sick leave
o Penalty is 3 times the accrued sick leave
o $100 per day for 3 days x 3 = $900
o Because this amount is greater than $250, employee is awarded $900
· Employee is also entitled to $50 per day until the violation is corrected
Frequently Asked Questions
Q: May an employer require a doctor's note?
A: No - Doctor's notes - requiring a doctor's note as a condition for paying out sick pay, could be considered retaliation as long as the employee notified you either verbally or in writing they needed to take time off for one of the many reasons allowed by law for paid sick leave. There is no requirement they give advance notice.
Q: What do I have to do to notify my employees about the sick leave law?
A: Add the revised Employee Notification Form effective January 1, 2015 for all new employees as part of your new hire packet. (see attached) The section that speaks to paid sick leave must also be given to all existing employees explaining how their sick pay works no later than July 8th, 2015.
Q: What are employer's options for handling Employee Sick Leave Accrual?
A: There are two (2) ways to handle paid sick leave:
1. Allow accrual of 1 hour for every 30 hours worked beginning July 1, 2015. Employees who have completed 90 days are allowed to use sick time as soon as they accrue it. With this method you must allow carry over to the next year, but you can cap it at 48 hours.
2. Utilize the "Front Load" method which gives employees 24 hours of sick leave at the beginning of the accrual period. With this method, the time off is given annually and it can be considered a "Use it or Lose it" plan. Sick leave can be used immediately if the employee has been there more 90 days.
Q: Must an employer pay out sick leave when an employee leaves employ?
A: No - Unused sick time is not paid out at termination, but it is reinstated if the employee returns within one year.
Q: What other actions should employers take?
A: Make sure to take the following steps:
1. Make sure you have the Healthy Workplaces/Healthy Families Act of 2014 poster where employees can easily read it.
2. Train your managers on documentation and the importance of consistent application of sick leave polices. There is a rebuttable assumption of retaliation if an employer takes an adverse action against an employee within 30 days of the employee taking a paid sick day.
3. PTO polices should be reviewed to ensure they allow for the provisions specifically identified in AB 1522. Still have questions? You can get answers by either going to the Department of Industrial Relations website (http://www.dir.ca.gov/DLSE/Paid_Sick_Leave.htmhttp://www.dir.ca.gov/DLSE/Paid_Sick_Leave.htm) or calling us at Cloud Payroll (909) 657-6019. Please feel free to share this information with other employers. P.S. Cloud Payroll does not charge to setup or run Accruals for employees (some companies are charging $50 Base Fee + $5 per employee, in addition to a per payroll Accrual Fee). Cloud Payroll Sick Leave Accrual Setup Options:
1. Hours Worked Accrual Method - 1 hour of paid sick leave for every 30 hours worked (0.0333 per hour worked). This method works for employees that have hours used in payroll processing.
2. Per Pay Period Accrual Method - Based upon standard hours worked per pay period. This method works best for Salary employees where hours are not entered for payroll calculations.
i. Weekly = 1.3333 hours per pay period (i.e. 40 hours).
ii. Bi-Weekly = 2.6666 hours per pay period (i.e. 80 hours)
iii. Semi-Monthly = 2.8888 hours per pay period (i.e. 86.6667 hours)
iv. Monthly = 5.7777 hours per pay period (i.e. 173.3333 hours)
3. Front Load Method - Add 24 hours of paid sick leave up front, no accruals at all.
This method is best used for existing employees that have been employed for 90
days or longer, or if you don't want to keep track of accruals, just the sick
leave hours taken per year.
Employer PTO Defaults
For new employees, we can
setup the Employer PTO Defaults to automatically add your chosen accrual method
to the new employees setup screen. 
1. What Employer PTO Default method do you want to use for New Employees?
2. What Sick Leave or PTO accrual methods you want to use for existing employees?
3. Post the Paid Sick Leave poster where your employees can see it (see attached)
4. Add the Employee Sick Leave 'Notice to Employee' to your New Hire packets for all new employees (see attached). You can find all the required New Employee forms at this link to our Website http://cloudpayrollpros.com/resources.html. The first 7 links above the dashed line.