Effective as of January 1, 2024, California employers will be required to provide their workers with additional paid sick leave on a statewide basis. Currently, state law requires that each employee be provided with a means of accruing at least 24 hours or 3 days of paid sick leave each year. This can be accomplished by frontloading the mandatory minimum number of hours in each employee’s sick leave bank on an annual basis, or allowing each employee to accrue sick leave at a rate of at least 1 hour for every 30 hours worked. The amount of unused paid sick leave that employees are able to accrue at any one time can be capped at 48 hours or 6 days. At the state level, employers are authorized to cap the usage of paid sick leave to 24 hours or 3 days per year. Local ordinances increased or altered these requirements in certain jurisdictions, but the statewide requirements set the floor for all paid sick leave requirements.
At the beginning of 2024, on a statewide level the amount of annual paid sick leave to which each employee is entitled will increase to at least 40 hours or 5 days of paid sick leave. Likewise, the amount of total paid sick leave that an employee must be allowed to accrue will increase from 48 hours or 6 days to a minimum of 80 hours or 10 days. Employers can still cap the amount of paid sick leave used by an employee on a yearly basis, but the annual cap will increase from 24 hours or 3 days to 40 hours or 5 days. Employers who do not front load the minimum 40 hours of paid sick leave into each employee’s sick leave bank each year or use the “1 hour for every 30 hours worked” accrual method will be required to ensure that their method for providing the required paid sick leave provides each worker with at least 24 hours or 3 days of paid sick leave after 120 days of work and at least 40 hours or 5 days of paid sick leave after 200 days of work. Depending on the accrual method selected, accrued but unused sick leave may need to be carried over from year to year, but given that employers can cap the amount of accrued sick leave used by employees in one year there appears to be little practical value in restricting carry over from year to year. This is particularly so given that some local ordinances have different carry-over requirements, and that under both the current law and new amendments thereto employees do not have to be paid out any accrued but unused paid sick leave at termination of their employment. Employees who leave the job and then come back are still entitled to have their accrued but unused sick leave reinstated under certain conditions.
Accrued sick leave will still need to be tracked on employee paystubs or separate writings distributed with paystubs. Paid sick leave that is utilized by employees will need to be paid to them no later than the payday for the pay period immediately following the pay period in which the paid sick leave was used.
Many of the updated requirements which will be kicking in on January 1, 2024 mirror the requirements of the local paid sick leave ordinance used within the City of San Diego, so employers who operate within the confines of the City of San Diego may not see drastic changes to their paid sick leave responsibilities. However, given the significant change to state law and the fact that the requirements apply to virtually all employers across the state, it would be a wise idea for all California employers to have their paid sick leave policies and practices reviewed in time to implement and ensure compliance with California’s new requirements. It will take time to craft the policies and make sure internal or external payroll processors are ready to move forward with the changes beginning on January 1 of next year, so please reach out to Navigato & Battin sooner than later to make sure your paid sick leave program aligns with state and applicable local law.