In an important development for workers in California effective January 1, 2024, the California legislature and Governor Gavin Newsom signed Senate Bill 616 (“SB 616”) into law, implementing changes to the Healthy Workplaces, Healthy Families Act of 2014 (the “HWHFA”). These changes include crucial modifications to paid sick time standards, impacting employers statewide. This article provides a comprehensive overview of key amendments to the HWHFA and the implications of such changes for both employers and employees.
Key Modifications:
Accrual Rate Increase: The most notable change includes an increase to the minimum annual accrual rate of paid sick time. Previously set at a minimum accrual rate of 24 hours or 3 days per year of employment, the new law raises the minimum annual accrual rate to 40 hours or 5 days per year of employment, providing workers with extended benefits.
Accrual Threshold for Paid Sick Time: Under previous law, employers maintain no obligation to permit an employee’s total accrual of paid sick time to exceed 48 hours or 6 days, provided that such employee’s rights to accrue and use paid sick time are not otherwise limited. The new law increases this total accrual threshold for paid sick time to 80 hours or 10 days, ensuring that employees can accrue a substantial amount of paid sick time.
Eligibility under Alternate Paid-Time-Off Policies: Employers utilizing alternate paid-time-off policies to satisfy state-mandated sick time requirements must now ensure that employees are eligible to accumulate a minimum of 5 days or 40 hours of paid sick time within the first 6 months of employment. This requirement aims to guarantee that workers can access paid sick time benefits early in their tenure.
Alternative Accrual Methods: Employers utilizing alternative accrual methods, such as those permitted by the Healthy Workplaces, Healthy Families Act, are now required to ensure that employees are provided a minimum of 40 hours of accrued sick time or paid time off by the 200th calendar day of employment of each calendar year, or within each 12-month period of employment. This provision is designed to provide clarity and consistency to the accrual process.
Carryover Sick Time Increase: The authorized limitation on carryover sick time has increased from 24 hours or 3 days to 40 hours or 5 days per year. While existing law requires accrued paid sick time to carry over to the following year of employment, this increase in the minimum threshold required for carryover allows employees to accumulate a greater reserve of paid sick time for unforeseen circumstances.
Preemption of Local Ordinances: Importantly, this new law will preempt any local ordinances conflicting with its provisions on compensation for accrued, unused paid sick time, written notice requirements, the calculation of paid sick time, and payment of sick time taken, ensuring a uniform application across California.
Implications for Employers and Employees:
Employers and employees alike should familiarize themselves with these changes to ensure a smooth transition to new regulations. Employers are especially encouraged to review and update existing workplace policies to achieve compliance with the increased accrual rates, accrual threshold, and carryover provisions summarized above. To accurately determine whether your business meets the requirements of SB 616, please reach out to John Bennett at jrb@fellplaw.com at (858) 746-6488 or any member of the FELLP Law team at (858) 746-6480 to schedule a consultation.
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