How to Comply with California's Paid Sick Leave Requirements

Editor’s Note: This content has been updated to reflect changes made by Senate Bill 616 to the Healthy Workplaces, Healthy Families Act, effective Jan. 1, 2024.

Employers are required to provide paid sick leave to workers in California under the Healthy Workplaces, Healthy Family Act of 2014 (HWHFA) as amended by SB 616.

California’s paid sick leave law includes the following basic requirements:

• Covered employees include full-time, part-time, temporary or seasonal workers who work in California for 30 or more days in a 12-month period for the same employer.
• Covered employees must accrue at least one hour of sick leave for every 30 hours worked. Alternative accrual methods are acceptable if they comply with the law.
• An employer may limit the amount of paid sick leave an employee can use in one year to 40 hours or five days.
• An employer must allow accrued unused paid sick leave to be carried over to the next year, but a cap on carryover hours of no less than 80 hours or ten days is permitted. Lump sum policies are not required to allow carryover.

Step 1: Determine Coverage Requirements

All employers with employees working in California must comply with the paid sick leave law, with very limited exceptions. Employees not covered by the HWHFA include: employees covered by qualifying collective bargaining agreements (CBAs), In-Home Supportive Services providers (who are covered under the IHSS Paid Sick Leave Program), retired annuitants working for governmental entities, and certain employees of air carriers. However, employees working under a CBA must be allowed to use any paid sick leave for the same reasons as indicated under the act.

California has several local sick leave ordinances in addition to the state law, and these local laws often differ from the state requirements. For example, Los Angeles and Long Beach both have paid leave laws specific to hotel workers. Employers need to determine if there are any local paid sick leave laws where the employees work and, if so, identify any differences in state and local requirements regarding eligibility, exclusions and other factors. Employers with employees working in California locales with sick leave ordinances, such as Berkeley, Emeryville, Los Angeles, Oakland, San Diego and others, must comply with both state and local laws.

Employees rehired within one year, who were already eligible for paid sick leave, are eligible to earn and use sick leave at the time of rehire.

Step 2: Comply with Required Workplace Posting

Employers must post the Division of Labor Standards Enforcement Paid Sick Leave Poster in the workplace in a place frequented by employees and where employees can easily read it. Employers with workers at remote sites, home offices or client offices within California are permitted to email the poster to those employees in addition to displaying the poster in the workplace.

Step 3: Determine How Employees Will Earn Paid Sick Leave

Employers can choose the how they provide paid sick leave to employees from the following options:

• Statutory accrual method. Employees are provided with at least one hour of paid sick leave for each 30 hours worked on an accrual basis beginning on the first day of employment. For example, an employee working 40 hours per week would accrue 1.33 hours of paid sick leave each week.
• Other accrual methods. Employers may implement accrual methods other than the one above as long as the accruals are earned on a regular basis and the employee has accrued no less than 24 hours or three days’ paid sick leave within 120 calendar days from the date of hire, and 40 hours or five days of paid sick leave within 200 calendar days from the date of hire.
• Lump sum. Employers can provide a lump sum of at least 40 hours or five days of sick leave up front at the beginning of each 12-month period. New hires must be provided with at least 24 hours or three days of the lump sum within 120 days from their date of hire, and the remaining 16 hours or two days by the 200^th day of employment. Employers can use an employee’s anniversary date, calendar year or another period when defining the 12-month period. For example, an employer can provide employees with a lump sum of 40 hours or five days of paid sick leave on the anniversary of their hire date each year.
• An existing paid-time-off (PTO) policy. Existing policies for paid leave are acceptable, whether separate vacation and sick leave banks or a combined PTO policy, if the policy provides for the minimum amount of leave required by law, and the employee can use the paid leave for the purposes defined in the law.

Additional considerations

Employees must be permitted to carry over unused leave each year; however, employers may choose to cap an employee’s total accrual at 80 hours or ten days of paid sick leave. Lump sum policies are not required to allow carryover.

If an employee separates from employment and is rehired by the same employer within one year from the date of separation, the employer must reinstate previously accrued and unused paid sick days to the employee unless the employer paid out the unused leave at the time of termination.

Employers should consider whether separating out the paid sick leave into a stand-alone policy or providing a combined PTO plan is the best approach. While it may be less work to leave in place an existing PTO policy that complies with the paid sick leave requirements, a combined PTO plan does have some disadvantages; for example, it may be more difficult to track an employee’s use of sick leave if the leave can be used for any reason. In addition, unused hours in a PTO plan will be required to be paid out upon termination, whereas an employer is not obligated to pay out sick leave hours that are designated specifically for sick absences covered by the law.

Step 4: Identify How Paid Sick Leave Can Be Used

Waiting period. While the law requires leave to begin accruing immediately upon hire, employers may choose to implement a 90-day waiting period before new hires are eligible to use their earned paid sick leave. Note: employers providing a lump sum of paid sick leave have 120 calendar days from the hire date to do so, therefore “earned” leave may not be available for employee use until the 120th day of employment.

Limits on use. Although employees may accrue more than five days of paid sick leave or one hour for every 30 hours worked, employers may limit the use of an employee’s paid sick leave to 40 hours or five days per year. For employees who work schedules other than eight-hour days, the employer must allow the employees to use at least five days or 40 hours per year, whichever is more. For example, an employee who works 10-hour days would be entitled to take five full days of leave for a total of 50 hours of paid sick leave. Alternatively, an employee who works six hours per day would only use 18 hours of paid sick leave for an absence of three full days and would therefore have 22 hours of paid sick leave remaining.

Accrual cap. Employers may also cap accruals at 80 hours or ten days, whichever is more, if they choose.

Minimum increments. Employees may be required to use paid sick leave in minimum increments of no more than two hours; however, employers may allow for paid sick leave in smaller increments also.

Reasons for leave. Employers must allow employees to take paid sick leave for themselves or a family member for the following reasons:

• Preventive care or diagnosis.
• Care or treatment of an existing health condition.
• For specified purposes for victims of domestic violence, sexual assault or stalking.

Employees have the right to decide when to use their paid sick leave, and employers are prohibited from interfering with this right. An employer must allow the use of paid sick leave even when an employee does not provide details about the need to use sick leave or fails to produce a doctor’s note.

Covered family members. A family member is defined as an employee’s parent, parent-in-law, child, spouse, registered domestic partner, grandparent, grandchild, sibling or designated person. This definition may differ under local paid sick leave laws; for example, employees in Emeryville may take paid sick leave to care for their service dog. Employers must comply with both state and local laws.

Anti-retaliation. Retaliation against employees who use paid sick leave is prohibited. Employers should not discipline employees for absences related to paid sick leave.

Step 5: Determine the Rate of Pay

Employers must pay nonexempt employees for absences under the paid sick leave law as if they were actually working. To determine the employee’s rate of pay, the law allows for the following options:

• Calculate the regular, non-overtime rate of pay for the workweek in which the employee used paid sick leave by dividing the total non-overtime compensation by the total non-overtime hours worked.
• Divide the employee’s total compensation for the previous 90 days (excluding overtime premium pay) by the total number of non-overtime hours worked in the full pay periods of the prior 90 days of employment.

Employers must pay exempt employees for paid sick leave absences in the same manner the employer pays other types of paid leave, such as vacation leave.

Step 6: Provide Notice to Employees

Employers must notify all nonexempt employees who are covered by the HWHFA in writing of the availability of paid sick leave upon hire. The California Wage Theft Protection Act notice has been revised to include information on paid sick leave for compliance with this notice requirement.

Employers must also display available paid sick leave balances on the employee’s pay stub or on a separate document delivered with the employee’s paycheck.

Organizations must distribute and communicate to employees the paid leave policy outlining the availability of paid sick leave and any limits the employer is imposing on the use of paid sick leave as permitted by law.

Step 7: Maintain Accurate Records

Employers must keep records of paid sick leave time provided to employees and the amount of paid sick leave each employee uses for at least three years. To ensure compliance, employers should track time off for paid sick leave separately from other types of leave.

Resources:

Healthy Workplace Healthy Family Act of 2014

California Paid Sick Leave: Frequently Asked Questions

DLSE Resources (Poster, Forms, etc.)

Assembly Bill No. 1522

Assembly Bill No. 304 (amendment)

Senate Bill No. 616 (amendment)