Under the Healthy Workplaces, Healthy Families Act, employees in California who work for an employer for at least 30 days within a year (tracked from the beginning of their employment, rather than by calendar year) must be provided paid sick leave. This includes full-time, part-time, and temporary employees.

Regulations like this can be confusing. Though the Healthy Workplaces, Healthy Families Act sets out specific paid sick leave requirements, the exact amount that you as an employer may owe to any individual employee can depend on a number of factors. One of these factors is which way you decide to calculate the amount of paid sick leave that an employee has earned. Under the Healthy Workplaces, Healthy Families Act, there are two acceptable ways to calculate this leave.

The Accrual Method
In this method, your employees will “accrue” (or earn) at least one hour of paid leave for every 30 hours worked. This accrual must start immediately upon the start of employment, but as the employer, you have the option of not allowing an employee to use any of this accrued time for a set period at the start of their employment. This period can last as long as 90 days.

Employers are also able to limit paid sick leave in the following ways:

• Limit the amount of paid sick leave an employee can use in one year to as low as 24 hours in a year, and
• Limit the total hours accrued to as low as 48 hours

You do have to roll over unused time under this method, but regardless of how much time an employee has accrued, the employer is still permitted to cap use to as low as 24 hours per year.

If you track accrued paid sick leave time in a shared “PTO bank” that also includes accrued vacation time, note that you will have to pay out any unused sick time upon the termination of the employee’s employment. If you don’t combine the two into a shared pot, then this rule doesn’t apply.

Another thing to keep in mind with the accrual method is the restoration of unused time. Employers who use the accrual method are required to restore any unused, accrued paid sick time to any employees who leave and then return to work within a year after their termination date.

The “Up-Front” or Advance Method
The “up-front” method (also known as the advance method) of providing paid sick leave involves making the full amount of sick leave for the year available immediately at the beginning of the year. The minimum amount of time provided under this method is the same as the accrual method – employers must provide at least 24 hours of paid sick leave per year to applicable employees.

In deciding what constitutes the “beginning of a year” under this method, the employer can decide whether to use the calendar year, fiscal year, a year tracked from the beginning of employment, or any other consistent 12-month period. However, the full amount for the year must be available for use by the 120th day of employment, at the latest, for initial hires.

One of the benefits of the “up-front” method for employers is that this method does not require employers to roll over any unused time form year-to-year. This may simplify accounting for some employers.

The main downside to the “up-front” method is the increased chance of longer employee leave times. For instance, employees may choose to use three days all at once upon their 120th day of employment, or in the first month of a year, rather than waiting to accrue more time and taking occasional sick days throughout the year. To avoid this outcome, employers who have concerns about attendance may prefer the accrual method.

Need more information on how to be compliant with the Healthy Workplaces, Healthy Families Act, or have more specific questions about your situation? The business and employment attorneys at Chase Law Group, P.C., can help you navigate California’s tricky employment laws in a way that makes sense for your business. Give us a call at (310) 545-7700 or contact us here and set up a consultation today.