If Pain, Yes Gain – Part 117: California Paid Sick Leave Amendments Effective 1/1; DIR Publishes Updated FAQs and Model Poster

What You Need to Know:

• Effective January 1, 2024, California’s amended Paid Sick Leave law goes into effect. As detailed in our prior update, the amendments increase the annual amount of California paid sick leave from three days or 24 hours to the greater of five days or 40 hours for eligible employees. The amendments also raise the accrual and year-end carryover cap from 48 hours or six days to the greater of 80 hours or 10 days.    
• Earlier this month, the California Department of Industrial Relations (“DIR”) published updated FAQs on the amended law, including how employers can transition existing paid sick leave protocols to satisfy the amended requirements.
• As outlined in the updated FAQs, transition requirements depend on several factors, such as whether the employer provides paid sick leave through an accrual or a frontload method.
• In addition to issuing updated FAQs, the Labor Commissioner updated the California paid sick leave model poster required to be posted in the workplace and the wage theft notice for distribution to employees.

On December 12, 2023, the DIR published updated Frequently Asked Questions regarding California Paid Sick Leave.  These FAQs provide the first guidance on California’s amended Paid Sick Leave law, which goes into effect on January 1, 2024. Generally, the FAQs set forth requirements regarding employees’ annual entitlement to paid sick leave, eligibility criteria, accrual versus frontloading, use of paid sick leave, payment and tracking of earned and taken leave, and information to be provided to employees. 

Key FAQs provide the following insights and reminders:

Non-Calendar Benefit Year and Compliance with Amendments on January 1, 2024:  The FAQs highlight how employers who provide paid sick leave benefits on a benefit year other than the calendar year (i.e., where the year does not start on January 1 and end on December 31) can comply with the impending Paid Sick Leave law amendments as of January 1, 2024. According to the FAQs, if an employer uses an accrual method, has an annual start date other than January 1, and caps annual usage at three days or 24 hours, the annual usage cap must increase to the greater of 40 hours or five days on January 1.  The FAQs offer the following example:

If an employer uses the 12-month period of May 1 – April 30 for accrual of paid sick leave with a usage cap of 24 hours or three days, the employer must allow the employee to use an additional 16 hours or two days before April 30 if the employee has accrued that additional leave.

Similarly, the FAQs provide that if an employer frontloads paid sick leave on an employee’s anniversary date, the employer can either frontload two additional days on January 1, or move the measurement of the yearly period to January 1, 2024 and frontload the greater of 40 hours or five days at the start of 2024. Although not explicitly stated, the same guidance generally would apply for employers who frontload paid sick leave on another date that is not January 1. 

Interplay with Local Paid Sick Leave Ordinances:  Given the numerous local California paid sick leave ordinances, the FAQs highlight that employers must comply with any applicable local ordinances and California’s Paid Sick Leave law. Where there are differences in the relevant laws, the employer must adhere to the law that is more generous to employees. The only exceptions to this general requirement is that local ordinances cannot contradict California’s requirements regarding:

1. The lending of paid sick leave;
2. Paystub statements;
3. Calculation of paid sick leave;
4. Providing notice of the leave is foreseeable;
5. Timing of payment of paid sick leave; and
6. Whether payment of sick leave is required upon termination.

California’s law preempts the local law only as to these specific topics.

Employees Exempt From the Paid Sick Leave Law:  Employees exempt from California’s paid sick leave requirements include individuals employed in specific industries including: (1) by an air carrier as a flight deck or cabin crew member, if they receive compensated time off at least as generous as the California paid sick leave requirements; (2) retired annuitants working for government entities; (3) railroad employees; and (4) construction employees covered by a CBA with specific provisions. 

As we previously wrote, even employees outside of the construction industry can be partially exempt from the state’s paid sick leave requirements if they are covered by a CBA with specific provisions. Notably, this is a partial preemption – such employees are still entitled to some paid sick leave under their CBA. The updated FAQs note that as of January 1, 2024, these employees also must be allowed to take sick leave for all the reasons set forth in the California Paid Sick Leave law, cannot be required to find a replacement worker as a condition for taking sick leave, and cannot be retaliated against for taking sick leave, among other things.  

Medical Documentation Cannot Be a Prerequisite for Taking Paid Sick Leave: As with the prior iteration of California’s Paid Sick Leave law, the amended law is silent on employers’ ability to require documentation for use of paid sick leave. The FAQs weigh in on this silence, and confirm that an employer generally cannot require health care provider certification before allowing a worker to take paid sick leave. In other words, an employee can take paid sick leave immediately upon oral or written request, and may not be denied the sick leave due to a lack of medical documentation. Importantly, the FAQs note that it may be reasonable for an employer to ask for documentation before paying sick leave if it has reason to believe the employee’s sick leave request is for an invalid purpose.

New Model Poster:  In addition to the FAQs, the Labor Commissioner has updated the California paid sick leave poster and wage theft notice (i.e., Labor Code Section 2810.5 notice to employees) to comply with the amended law. The FAQs remind that employers must (a) display a poster in a conspicuous area frequented by employees where it may be easily read during the workday, and (b) provide most employees with an individualized wage theft notice that includes paid sick leave information.

Next Steps: As the California Paid Sick Leave law amendments’ January 1, 2024 effective date is mere days away, here are some next steps for employers to consider:

• Review existing sick leave or PTO policies and practices, including those in a California locality with a separate local paid sick leave mandate, and either implement new policies and practices or revise existing policies and practices to ensure compliance with the amendments, while doing the same for any related attendance, conduct, anti-retaliation, and discipline policies and practices.
• Train supervisory and managerial employees, as well as HR, on the new requirements.
• Monitor the California Labor Commissioner’s website for the release of additional administrative guidance on employers’ paid sick leave compliance obligations in light of the amendments.
• Update onboarding packets for non-exempt workers with an updated Wage Theft Prevention Act Notice reflecting the changes to CA law, if needed.

With the paid leave landscape continuing to expand and grow in complexity, companies should reach out to their favorite Seyfarth attorney for solutions and recommendations on addressing compliance with nationwide paid leave requirements. To stay up-to-date on paid leave developments in California and beyond, click here to sign up for Seyfarth’s Paid Sick Leave mailing list. Companies interested in Seyfarth’s paid sick leave laws survey should reach out to paidleave@seyfarth.com.