An Ounce of Prevention is Worth a Pound of Cure: Is Your Business in Compliance with the CA Healthy Workplace Healthy Family Act of 2014?

The California Healthy Workplaces Healthy Families Act of 2014 is now fully in effect, providing paid sick leave to employees as well as significant potential for liability for employer non-compliance.

The law provides sick leave for absences from work for all employees or their family members for preventive care or care of an existing health condition or for specified purposes if the employee is a victim of domestic violence, sexual assault or stalking.

The law doesn’t require any type of documentation or doctor’s note for paid sick days, and family members can include the employee’s parent, child, spouse, registered domestic partner, grandparent, grandchild and sibling.

It’s important to note that the law applies to all employers regardless of size – there is NO exception for small businesses. Full-time, part-time and temporary employees who, on or after July 1, 2016, work in California for 30 or more days, within a year from the beginning of employment, are entitled to paid sick leave.

However, some exceptions apply. Employees covered under qualifying collective bargaining agreements, In-Home Supportive Service Providers, and certain employees within the airline and construction industries are not covered by the Act.

As of July 13, 2016, the Act was amended with clarifications on aspects, such as additional accrual methods, sick leave balance reinstatements, and recordkeeping.

How It Works

The law requires accrual of at least one hour of paid sick leave for every 30 hours worked. Unused sick leave must carry over from year-to-year, but may be capped at 6 days or 48 hours.

Also, sick leave use may be capped at 3 days or 24 hours. As an alternative to this accrual method, employers can use the lump sum method and provide just three days, or 24 hours, of sick leave that can be taken immediately at the start of each benefit year, with no carryover or tracking of accrual. The recent amendments allow for an additional alternative accrual method that will provide at least 24 hours of accrued sick leave by the 120th day of employment.

Employers can adopt a 90-day employment probation period, where accrual begins on the first day of employment, but the right to use paid sick leave begins when the employee completes the probationary period.

Existing policies for paid time off (PTO) where sick and vacation time is combined may be sufficient for compliance purposes if it provides at least the minimum required under the law.

However, unlike PTO and vacation pay, unused sick leave does not have to be paid out at termination. But if an employee separates from employment and then is rehired within one year, previously accrued/unused paid sick days must be restored. The amendments further clarified that this restoration is not required when an employee was paid out upon termination.

The sick leave must be paid at the employee’s regular hourly rate. If the employee is partly compensated with commission, then the employer must calculate out the average hourly compensation for the 90 days preceding the use of the sick leave. Recent amendments provide two alternative methods that can be used to calculate average pay.

The employee has to give reasonable advance notice when the use of sick leave is foreseeable. If the need is not foreseeable, then notice has to be given as soon as possible. Notice can be either written or verbal. Also, employers cannot require an employee to find coverage as a condition for taking paid sick leave.

Employer Compliance

Employers must ensure the following to be in compliance with the law:

  • Display a poster on paid sick leave in a highly visible place
  • Provide written notice to employees with sick leave rights at the time of hire (most existing employees require written notice of their rights as well)
  • Provide for a permissible method of sick leave accrual
  • Allow eligible employees to use their paid sick leave upon reasonable request
  • Show how many days of sick leave an employee has available on the employee’s paystub issued the same day as paycheck
  • Keep records showing how many hours have been earned and used for three years
  • Furthermore, employers should review their existing leave policies to make sure they are in compliance with the law. Handbooks and policy manuals should also be reviewed to confirm that any and all updates are incorporated. Payroll statements must be updated to accurately reflect employees’ sick leave balances.

Your Turn

Failure to comply with the law can result in penalties, interest, attorneys’ fees, reinstatement, and up to three times the withheld sick pay. Employers may also face liability if they engage in any discriminatory or retaliatory actions related to the use of sick leave.

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