United States: California State Legislature Gives Employers Prescription(Rx) For New Sick Leave Law

On Monday, July 13, 2015, California Governor Jerry Brown signed a much anticipated "fix it" bill that amends the Healthy Workplaces, Healthy Families Act of 2014, clarifying the requirements of California's sick leave law.

The fixes bring welcome clarity and revisions to key provisions that, for most employers, will make the law easier to administer. Yes, it's two weeks late—the intent was for the bill to pass before the July 1 deadline for employers to implement the bulk of the original law's requirements. But the delay was due in large part to several revisions that the legislature made in hopes of getting it right this time. And thanks to an urgency provision, the amendments go into effect immediately. The full text of the amendment (AB 304) is available here, but we've highlighted a few key provisions below. You should also visit our prior blogs on this subject here to make sure you're keeping up with the feverish pace of things.

  • Calculating rate of pay: This was the one we were all waiting for, particularly those of you with employees who are paid by commission, piece rate, or some other varying rate of pay. Previously, the law required that you calculate the rate of pay by dividing the employee's total wages by the employee's total hours worked in the full pay periods of the prior 90 days of employment. This meant that, for employees with varying rates of pay, the amount paid for each sick leave day could vary every single time. And if you have employees in San Francisco or Oakland, you'd have to make two calculations every time and figure out which one was the most favorable to the employee on that day. Rest easy, the amendments resolve a lot of that headache. (Drumroll, please...)
    • For nonexempt employees, employers have two options:
      1. Calculate it the same as the regular rate of pay for the workweek in which the employee uses paid sick time, whether or not the employee actually works overtime in that workweek. The "regular rate" is the same base rate you use when calculating overtime (overtime is 1.5x the regular rate). This essentially aligns with the San Francisco and Oakland ordinances where the sick leave pay rate is "the employee's hourly wage."
      2. You could alternatively divide the employee's total wages, not including overtime premium pay, by the employee's total hours worked in the full pay periods of the prior 90 days of employment. So if you were one of the employers who figured out how to program this calculation into your systems before July—"A" for effort!—you can keep things as they are, but you don't have to. (Hint: most employers prefer option 1.)
    • For exempt employees, employers can now calculate the rate of pay in the same manner as they calculate wages for other forms of paid leave. Halleluiah! But if you have employees in San Francisco and Oakland, don't sigh with relief too quickly. The San Francisco and Oakland ordinances are more specific and require calculating the rate as follows: Divide the annual salary by 52 to get the weekly salary. Then divide the weekly salary by 40 hours to get the hourly rate (unless the employee's regular workweek is less than 40, in which case the weekly salary should be divided by the number of hours worked during a regular work week). If this method leads to different results for you, you should use the method that is most generous to the employee.
  • Eligibility: The prior version of the sick leave law stated that employees are not eligible for sick leave unless they work in California for 30 or more days within a year. The new amendments clarify that the 30 days can be calculated based on work performed "for the same employer."
  • Accrual rate: Employers now have a much more robust set of options for determining how sick leave accrues. The original law required that employees accrue one hour of sick leave for every 30 hours worked. Now, employers are permitted to choose whichever accrual method works best for them, provided that (1) the accrual is on a regular basis and (2) the employee will have 24 hours of accrued sick leave available by the 120th calendar day of employment or each calendar year, or in each 12-month period. This clarification is particularly helpful for employers who want to rely on existing PTO policies where PTO accrues at a different rate than what was required previously (i.e., something other than one-hour-for-every-thirty). Of course, if you have employees in San Francisco, Oakland, or Emeryville, you'll still have to comply with the accrual methods in those ordinances.
  • Providing sick leave up front: The new amendments clarify that if an employer chooses to front load an employee's three days of sick leave, they are not required to give the three days on the first day of employment. Rather, the law is satisfied if the employer provides not less than three days (24 hours) of leave that is available to the employee by the end of the 120th calendar day of employment. But again, be mindful of the San Francisco and Oakland ordinances, where front loading is not really an option (see our discussion on that here), and sick leave begins to accrue on the 90th day.
  • Defining when the year begins: The original law permitted an employer to limit an employee's use of paid sick days to 24 hours or 3 days in each year of employment. This seemed to contradict the provision stating that an existing paid leave policy or PTO policy was sufficient if it provided no less than 24 hours or 3 days of paid sick leave for each year of employment or calendar year or 12-month basis. The new amendments clarify that employers can limit an employee's use of paid sick days to 24 hours or 3 days in each year of employment, a calendar year, or a 12-month period.
  • Pre-existing policies and whether they comply: And now some good news for the early adopters. Employers who had a sick leave or PTO policy for certain classes in place before the law went into effect on January 1, 2015 can hold onto their old policy, provided that the accrual is on a regular basis so the employee (including those hired into that class after January 1, 2015) has no less than one day or eight hours of accrued sick leave or PTO within 3 months of employment of each calendar year, or each 12-month period, and the employee could earn at least three days or 24 hours of sick leave/PTO within nine months of employment.
  • Paystub notification for "unlimited" sick leave/paid time off: If an employer provides unlimited sick leave or paid time off, the law clarifies that you can satisfy the notice requirements by indicating "unlimited" on the notice or the employee's itemized wage statement. But this begs the question: is your policy really "unlimited"? For instance, would you continue to pay an employee through a three-month FMLA leave? If it's not truly "unlimited," it's risky to say "unlimited" on the paystub or notice without further explanation.
  • Tracking the reasons for time off: Some interpreted the original law as suggesting that even if you use your existing paid time off plan to comply, you still have to keep records that reflect whether the time taken is used for sick or vacation. The new amendments clarify that employers have no obligation to inquire into or record the employee's reason for using sick leave or PTO. That said, there are still good reasons to track when an employee wants to designate a PTO day as sick leave (as we discussed here) to mitigate the risk of inadvertently taking adverse action, and to maintain evidence that you are complying with the law.
  • Reinstatement upon rehire: The law generally requires employers to reinstate accrued but unused sick leave to employees whom they have rehired within one year of termination. The amendments confirm that if you choose to pay out the unused sick leave at termination in the first place, there's nothing left to reinstate if and when you rehire the employee.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.