California’s Healthy Workplaces, Healthy Families Act of 2014 (the Act) will require almost all California employers regardless of size to provide paid sick leave to its workers starting July 1, 2015. See, “Mandatory Paid Sick Leave For California Employees” (Mandatory article).

As this new law fails to provide guidance in several important areas, even the Division of Labor Standards Enforcement (DLSE) has attempted to clarify employer requirements in a series of internet postings. See, Shall the Fog Be Forever Forsaken? California Labor Commissioner Again Attempts to Resolve Questions on New Paid Sick Leave Benefits Law.

Meanwhile, through Assembly Bill 304 (AB 304), the California Legislature has been working for several months to plug as many of the holes in the Act as possible. See, California Sick Leave “Clean-up” Legislation Introduced (Clean Up Article). Yet at this writing, less than two weeks before the July 1, 2015 activation date, Sacramento lawmakers are still changing AB 304, most recently on June 18. The bill has now been designated an “urgency” statute which allows changes to the Act up to the very last minute.

Revisions under consideration include:

• Expansion of Accrual Method Guidelines: A major feature of the Act is the set of methods an employer is permitted to calculate paid sick leave benefits, including the “advance” method and the “accrual rate” method. See, Mandatory article. In its current form, AB 304 would allow an employer which was using its own accrual method for paid sick days prior to January 1, 2015 to continue that method after July 1, provided it meets certain minimum standards. Those minimums are complex and require close study.
• Clarified Sick Pay Rate Calculations: The Act currently does not supply clear guidance on how sick pay rates are calculated when a worker has been receiving differing rates of compensation, including, for example, combinations of hourly pay, commissions and/or bonuses. AB 304 in its current form would permit the option of an averaging calculation to reach the sick pay rate.
• Delayed Application of the Law in Certain Industries: If passed into law as now drafted, AB 304 would not require employers in the broadcasting and motion picture industries (covered by Industrial Welfare Commission Wage Orders 11 and 12) to comply with the Act until January 21, 2016.
• Employee Rights to Legal Action: Our Clean Up Article reported an earlier version of AB 304 had taken away the rights of employees to sue companies directly for violations of the Act. AB 304 no longer carries that possible change to the Act. Thus, if this bill passes into law in its current form, workers will still have the right to bring legal action directly for paid sick leave violations.

Please stay tuned. We continue to monitor possible changes to the Act. For additional assistance understanding and implementing this new law, please contact one of our attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.

Helena Kobrin
June 19, 2015