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Senate Bill 616, has significantly expanded the rights of employees in California to receive paid sick time.
Below are the details you need to know:
Revised Paid Sick Leave Use Amount
SB 616 requires employers to offer no less than 40 hours (5 days) of paid sick leave by the 200th calendar day of employment, or each calendar year or 12-month period. The previous law allowed employers to provide no less than 24 hours (3 days) of paid sick leave by the 120th calendar day of employment. The accrual rate of 1 hour for every 30 hours remains the same, with the new use amount of 40 hours. Employers opting to frontload must frontload 40 hours.
Carryover Provisions
Employers are allowed to limit the use of carried-over sick leave to 40 hours (5 days) in each year of employment. This is a change from the prior limit of 24 hours (3 days).
Local Exceptions
Cities such as Los Angeles, West Hollywood, Santa Monica, San Diego, San Francisco, Oakland, Emeryville, and Berkeley have their own local sick leave ordinances, which offer higher sick leave rates than the California State rate. These local rates will remain in effect. However, the accrual limit may increase (see section below). Therefore, if your company operates in these cities, ensure you are incompliance with the city-specific rates.
For companies operating in areas of California that only required 24 hours of sick leave previously, the new requirement is now 40 hours.
Increased Accrual Limit
The new legislation raises the maximum accrual limit for paid sick leave to 80 hours (10 days), an increase from the previous 48 hours (6 days). All companies will need to ensure they have increased their maximum accrual limit to reflect this 80-hour limit. This impacts many local cities, like Los Angeles, which currently have a lower maximum cap on accrual, despite having a higher use amount per year.
Effective Date
These changes are effective January 1, 2024.
PTO Policy Integration
Companies that have a comprehensive Paid Time Off (PTO) policy can streamline their processes. If your existing PTO policy already matches or exceeds the 40-hour (5 day) requirement, you can utilize this PTO as sick time. As previously allowed, companies do not have to separate PTO and sick leave policies as long as they are meeting the minimum sick leave and allowing use of these hours for sick related use. It’s crucial, however, that employees are clearly informed that they can use their PTO for sick leave and understand the conditions and benefits.
Action Needed
We urge companies to familiarize themselves with these updates and take appropriate action, including updating your handbook and reflecting such change in your payroll system/HRIS, prior to January 1, 2024.
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