The existing California Paid Sick Leave Law (Healthy Workplaces, Healthy Families Act of 2014) mandates that California employers provide employees up to three days of paid sick leave upon their 90^th day of employment if (1) the employee worked in California for the same employer for 30 or more days within a year from the commencement of employment and (2) was taking sick leave for a qualifying reason.

On October 4, 2023, Governor Newsom signed Senate Bill ("SB") 616, which amends California's Paid Sick Leave Laws. SB 616 increases the number of paid sick leave days an employer must provide eligible employees each year from three days/24 hours to five days/40 hours. The law goes into effect January 1, 2024, and thus employers should start preparing now to implement SB 616 changes to avoid potential labor code violations.

What Employers Need to Know

• While some of California's paid sick leave requirements remain unchanged, the amount of sick leave increases from three to five days, thus triggering other requirements.

SB 616's major changes relate, for the most part, to the amount of time an employee is afforded paid sick leave - increasing the amount of time that an employee can be off for any of the statutorily listed reasons from three days (24 hours) to five days (forty hours). Otherwise, the majority of the procedural and substantive requirements remain in place. For example, the amount of paid sick leave available must be provided on an employee's wage statement or in a separate writing every pay period. The calculations for paying paid sick leave remain in place and there is still no requirement to cash out unused paid sick leave upon termination.

What also remains unchanged is that the employer cannot seek substantiation for the paid sick leave absence. Most employers recalibrated their policies after the original Paid Sick Leave Law required employees to provide a doctor's note after the third day. Now, presumably, an employer must wait until after the fifth day.

• Accrued paid sick leave requirements, including the annual usage cap, will increase.

Employers are still required to provide (either via accrual or frontload) no less than 3 days/24 hours of accrued sick leave or paid time off by the 120^th day of employment and can use any accrual method (either one hour of paid sick leave per every 30 hours worked or otherwise).

However, SB 616 now requires an employer to provide its employees an additional 16 hours (i.e. no less than 5 days or 40 hours) of accrued paid sick leave by the 200^th day of employment, calendar year or 12-month period. This also means the cap on accrued paid sick days increases to 40 hours or 5 days, whichever is greater in each year of employment, calendar year or 12-month period.

• The carry over accrual cap will also increase but, can be capped for employees who receive their sick leave in the beginning of the year.

Accrued, unused, paid sick days still carry over to the following year of employment. However, SB 616 allows an employer to front-load 40 hours or 5 days of paid sick leave without requiring any carryover of unused paid sick leave. However, for employers that use accrual methods, SB 616 also requires employers to increase the continuous accrual cap from 48 hours (6 days) to 80 hours (10 days). An employer may still limit an employee's use of paid sick leave to 5 days a year.

• SB 616 preempts local ordinances.

SB 616 states that the "Legislature finds and declares that establishing uniform statewide regulation of certain aspects of paid sick leave is a matter of statewide concern and is not a municipal affair as that term is used in Section 5 of Article XI of the California Constitution." Therefore, Sections 1, 2, and 3 of this act amending Sections 245.5, 246, and 246.5 of the Labor Code apply to all cities, including charter cities.

SB 616 Section 2, subdiv. (r) explicitly preempts any local ordinance that is contrary to concerning certain provisions of the paid sick leave laws. (See Labor Code § 246 subdivisions (g) (no payment of sick leave upon termination), (h) (advancement of sick leave), (i) (notice of sick leave available), (l) (how to calculate sick leave), (m) (employee notification) and (n) (payment of sick leave at next pay period).)

• SB 616 maintains the CBA exemption, with a twist.

Interestingly, SB 616 maintains the existing law's exemption for employees covered by a CBA (Section 245(a)(1)) However, SB 616 then extends certain provisions of paid sick leave laws to CBA employees. It states:

"Existing law imposes procedural requirements on employers regarding the use of paid sick days, including by prohibiting retaliation for using paid sick days, by prohibiting the imposition of certain conditions on the use of paid sick days, and by requiring the use of paid sick days for specified health care and situations. This bill would extend the above-described procedural requirements on the use of paid sick days to CBA employees."

Employers should check any collective bargaining agreements regarding language that violates – or could be argued violates – this new section.

Next Steps

The California Legislature continues to impose mandates on employers that are already struggling to comply with its regulatory morass. SB 616 is just another one of those mandates and it will go into effect in less than two months. Thus, it is imperative employers speak with their employment counsel, review their current paid sick leave and/or paid time off policies for compliance purposes and confirm that their payroll and wage statements are adjusted, if need be, to meet the new SB 616 requirements.

Hanson Bridgett attorneys will be speaking about SB 616 at its late January 2024 Labor Seminar as well as other developments. Final dates and registration will be posted on the website.