About California's New Paid Sick Leave Law (AB 1522)
The new Paid Sick Leave Law (AB 1522) will have an effect on all California employers. Employers that have provided sick leave in the past will need to ensure that they meet the minimum limits of the new law. Employers that have not provided sick leave in the past are now obligated to do so and must meet the minimum limits as well.
Insurance that covers this area is called Employment Practices Liability also referred to as EPLI.
Every employer in the state will need to provide notice to its employees. The Department of Industrial Relations has a FAQ page that you can find here. (DIR Website)
The question of whether or not paid sick leave needs to be reported as payroll for work comp is answered in the Rating Plan published by the Work Comp Insurance Rating Bureau which states:
Section V- Payroll- Remuneration
1. Payroll- Remuneration1
As used in this Plan, payroll and remuneration are synonymous and mean the monetary value at which service is recompensed. Except as provided herein, remuneration includes: gross wages, salaries, commissions, bonuses, vacation, holiday and sick pay, overtime payments, the market value of gifts, and all substitutes for money earned during the policy period by employees and officers of the employer, and any other persons for whom voluntary coverage is provided under the policy.
This also applies to accumulated sick pay. Appendix II of the same document states, "Payment of accumulated or accrued sick leave usually is made upon the employee’s termination and is considered to be pay to which the employee would have been entitled had he/she remained employed. Include as payroll unless sick pay was accrued during periods that the employer was legally self insured."
The question of how to classify the Paid Sick Leave payroll is to use the same percentages for that employee based on prior averages. For example, if the historical class codes for an employee were 50% Carpentry and 50% Tile then you would assign 50% of the Paid Sick Leave to Carpentry and 50% to Tile.
If you have just switched an employee to a new class and he will remain in the new class then you would be justified in using only the new class code. If the audit later shows otherwise the Paid Sick Leave percentage would likely be adjusted at audit. Changing the classification should never be used as a means to reduce the premium due to the carrier.
Division of Labor Standards Enforcement - Office of the Labor Commissioner DLSE Paid Sick Leave Posting 11/14
THIS POSTER MUST BE DISPLAYED WHERE EMPLOYEES CAN EASILY READ IT
Download the sample from the Department of Industrial Relations
HEALTHY WORKPLACES/HEALTHY FAMILIES ACT OF 2014 PAID SICK LEAVE
Entitlement:
- An employee who, on or after July 1, 2015, works in California for 30 or more days within a year from the beginning of employment is entitled to paid sick leave.
- Paid sick leave accrues at the rate of one hour per every 30 hours worked, paid at the employee’s regular wage rate. Accrual shall begin on the first day of employment or July 1, 2015, whichever is later.
- Accrued paid sick leave shall carry over to the following year of employment and may be capped at 48 hours or 6 days. However, subject to specified conditions, if an employer has a paid sick leave, paid leave or paid time off policy (PTO) that provides no less than 24 hours or three days of paid leave or paid time off, no accrual or carry over is required if the full amount of leave is received at the beginning of each year in accordance with the policy.
Usage:
- An employee may use accrued paid sick days beginning on the 90th day of employment.
- An employer shall provide paid sick days upon the oral or written request of an employee for themselves or a family member for the diagnosis, care or treatment of an existing health condition or preventive care, or specified purposes for an employee who is a victim of domestic violence, sexual assault, or stalking.
- An employer may limit the use of paid sick days to 24 hours or three days in each year of employment.
Retaliation or discrimination against an employee who requests paid sick days or uses paid sick days or both is prohibited. An employee can file a complaint with the Labor Commissioner against an employer who retaliates or discriminates against the employee.
For additional information, you may contact your employer or the local office of the Labor Commissioner. Locate the office by looking at the list of offices on our website http://www.dir.ca.gov/dlse/DistrictOffices.htm using the alphabetical listing of cities, locations, and communities. Staff is available in person and by telephone.
DLSE Paid Sick Leave Posting 11/14
