As we approach the New Year, California employers need to proactively adjust their sick leave policies in response to recent legislative changes. Governor Newsom signed SB 616 into law on October 4, 2023, amending the existing Healthy Workplaces, Healthy Families Act of 2014. Set to take effect on January 1, 2024, these amendments necessitate a thorough review and update of employer sick leave policies to ensure compliance.

This article is part of a series on employment policies and it is important to note that San Francisco, Berkeley, Emeryville, and Oakland all have unique policies that may require additional review and compliance. Coepio Legal is here to guide you through these changes and help your business stay on the right side of the law. Contact our business attorneys in San Francisco today if you have questions or need guidance. 

Understanding the Amendments

Accrual and Usage Changes

Under the previous law, employees could accrue up to 24 hours (or three days) of paid sick leave per year, with a cap of 48 hours. The amended law raises the stakes, increasing the annual accrual to 40 hours (five days) and doubling the accrual cap to 80 hours. To align with these changes, employers are now required to provide 24 hours of sick leave by the 120th day of employment and an additional 16 hours by the 200th calendar day, totaling 40 hours.

Additionally, the limitation on usage of paid sick leave has been updated from 24 to 40 hours per year.

Frontloading Adjustments

Many employers prefer the “frontloading” method, providing all sick leave upfront for administrative simplicity. Previously, “the full amount” for frontloading was defined as 24 hours, but this has now been adjusted to 40 hours.

Preemption of Local Ordinances

The new law expressly preempts any local ordinances that are inconsistent with several existing provisions, including but not limited to:

• The non-requirement of paying out unused sick leave upon termination.
• The reinstatement of unused sick leave for employees rehired within a year.
• Employer discretion in advancing unpaid sick leave.
• Listing available sick leave on wage statements.
• Employee notification requirements for sick leave usage.
• Calculations for paying sick leave.
• The pay schedule for used sick leave.

Paid Time Off Considerations

For employers that provide Paid Time Off (PTO) in lieu of separate sick leave, the new law mandates that such PTO must meet or exceed the requirements of the paid sick leave law for eligible employees.

Action Steps for Employers

1. Review and Revise Policies: Ensure that your employee handbooks, sick leave, and PTO policies are updated to meet the new requirements of SB 616.
2. Check Local Compliance: Confirm that your policies also comply with the sick leave laws of California municipalities, especially those with more specific provisions than the state law, including Los Angeles, San Francisco, San Diego, Emeryville, Berkeley, Santa Monica, and West Hollywood.
3. Communicate Changes: Clearly communicate any changes in sick leave policies to your employees, ensuring they are aware of their updated rights and benefits.
4. Train Your HR Team: Ensure that your Human Resources team is well-versed in the new requirements and ready to implement the changes and address any employee queries.

The amendments to California’s paid sick leave law mark a significant shift in employee benefits, and employers must act swiftly to ensure compliance. By proactively updating your policies and practices, your business can continue to provide a supportive work environment and maintain compliance with state and local laws. 

Our small business lawyers in San Francisco are committed to assisting your business in navigating these changes, providing the legal expertise and support needed to implement the new requirements effectively. Trust Coepio Legal to provide expert guidance and ensure your business’s legal compliance in the ever-changing landscape of employment law — contact us today.