Understanding California's New Paid Sick Leave Law and Employment Documentation Requirements


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Understanding California's New Paid Sick Leave Law and Employment Documentation Requirements

  1. 1. UNDERSTANDING CALIFORNIA’S NEW PAID SICK LEAVE LAW AND EMPLOYMENT DOCUMENTATION REQUIREMENTS Presented by Anthony Zaller, Esq. Jennifer Grock, Esq. Janice Miller, Esq. Rachel Weise, Esq. 1
  2. 2. Topics NEW LAWS FOR 2015 - Mandatory paid sick leave – major compliance issues for employers - Anti-bullying training - Driver license information is confidential - Undocumented workers were given protected status and ability to obtain drivers licenses. EXISTING OBLIGATIONS - Many different obligations and areas of liability. It is a good time to review current company polices regarding employment documents and retention. 2
  3. 3. Topics • Paid Sick Leave • Employment files and personnel documents - New record keeping requirements for the paid sick leave law - Documents employers are required to maintain - Best practices regarding timekeeping, payroll and wage statements • Termination documents • Privacy issues - What is confidential? - Best practices in protecting confidential information 3
  4. 4. Healthy Workplaces, Healthy Families Act of 2014 • Effective July 1, 2015, California employers must provide their California employees with at least three days (24-hours) of paid sick leave per year. • Covered Employers: ALL employers. • Unlike other California leave-related laws, there is no exemption for small employers • Covered Employees: Any employee who works in California for 30 or more days within a year from commencement of employment – including part-time, temporary, and seasonal employees. • Accrual Rate: Sick days must be accrued at the rate of not less than one hour per every 30-hours worked beginning at the commencement of employment or July 1, 2015 whichever is later. Accordingly, for employees who work 40 hours per week: • 1.3 sick hours accrued per week; or • 5.2 sick hours accrued per month Paid Sick Leave 4
  5. 5. Methods for Compliance #1: Accrual Cap and Carry Over • Using the formula from the last side Employees accrue Paid Sick Leave hours. • Employees must be permitted to carry over all of their accrued, unused paid sick leave to the following year. • Employers, however, may cap the accrual of paid sick leave at 48 hours or six days. Paid Sick Leave 5
  6. 6. Methods for Compliance #2: Annual Grant/Front loading method • Employers may choose to give employees at least three days (24-hours) of paid sick leave at the start of each calendar year, anniversary date, or twelve month basis. • If the employer does so there is no accrual of paid sick leave hours and carryover of unused sick days is NOT required Paid Sick Leave 6
  7. 7. Paid Sick Leave Use of Sick Leave • Employees can use their paid sick days beginning on the 90th day of their employment. • Employers can limit the amount of sick leave used to 24 hours or 3 days per year. • Note: Employer must notify employee of cap prior to implementation. • Employers may also set a minimum increment not to exceed two hours for use of paid sick leave. Other than that, the employee is entitled to determine how much sick leave he or she needs to use.
  8. 8. Paid Sick Leave Purpose of Sick Leave • Sick leave may be used for the diagnosis, care, or treatment of an existing health condition of, or preventive care for, an employee or an employee’s “family member.” (Sick leave can also be used for victims of domestic violence, sexual assault, or stalking). • The definition of “family member” is extremely broad and includes: children (regardless of age or dependency status), parents-in-law, grandparents, grandchildren, and siblings, among other persons.
  9. 9. Paid Sick Leave Employer Notice Requirements • Poster on Paid Sick Leave must be displayed where employees can easily read it • Employers who willfully violate the posting requirement are subject to a civil penalty of not more than $100 per offense. • Link to PDF of poster: http://www.dir.ca.gov/dlse/Publications/Paid_Sick_Days_Post er_Template_(11_2014).pdf
  10. 10. Paid Sick Leave Paystub Requirements • Every pay day, employers must provide each covered employee with written notice that sets forth the amount of paid sick leave available. • This notice must appear either on the employee’s itemized wage statement or in a separate document provided to the employee on the designated pay date. • Importantly, violation of this provision subjects the employer to penalties under the Act, but not under California Labor Code Section 226.
  11. 11. Paid Sick Leave Wage Theft Prevention Act Notice Requirement • The Act amends Labor Code Section 2810.5 to require employers to include in the mandatory Wage Theft Prevention Notice the following information about sick time: (i) that employees may accrue and use sick leave; (ii) have a right to request and use paid sick leave; (iii) may not be retaliated against or terminated for requesting or using accrued sick leave; and (iv) have the right to file a complaint against an employer who retaliates. • Labor Commissioner template: http://www.dir.ca.gov/dlse/LC_2810.5_Notice.pdf
  12. 12. Paid Sick Leave Employee Notice Requirement • If the need for sick leave is foreseeable, then the employee must provide “reasonable advance notification.” • If the need for paid sick time is unforeseeable, then the employee must provide notice as “soon as practicable .” • Regardless of when employee gives notice, employers MUST provide paid sick leave upon an employee’s oral or written request.
  13. 13. Paid Sick Leave Rate of Pay • Sick leave must be paid out at the employee’s hourly wage. • Where employees earn fluctuating wages (commissions, multiple hourly rates, piece rates), the rate of pay for paid sick leave is determined by dividing the employee’s total wages (not including overtime pay) by the total hours worked in the full pay periods during the prior 90 days. • Payment for sick leave must be made no later than the payday for the next regular payroll period after the sick leave was taken.
  14. 14. Paid Sick Leave Rate of Pay – Examples from the Department of Industrial Relations: If an employee is paid commission or piece rate, then divide total compensation for previous 90 calendar days by number of hours worked and pay this rate. Employee was paid a piece rate of $0.36 per square foot for 16,500 square feet during 400 hours of work in a 90 day period. He earned $5,940. •His hourly rate for paid sick leave is $5,940 ÷ 400 hours = $14.85 per hour Employee is paid on commissions only. In a 90 day period, she worked 480 hours and earned $9,000. •Her hourly rate for paid sick leave is $9000 ÷ 480 hours = $18.75 per hour
  15. 15. Paid Sick Leave No Pay-Out for Accrued Sick Leave at Termination • Unlike vacation time, employers are not required to provide compensation to an employee for accrued, unused paid sick days upon separation of employment. • If an employee, however, separates from his employment and is rehired within one year, previous unused sick days must be reinstated.
  16. 16. Paid Sick Leave Record Keeping Requirements • Employers must keep records for three years documenting the hours worked and the sick leave accrued • Employers must make the records available for inspection by the Labor Commissioner and the employee.
  17. 17. Paid Sick Leave Key Dates January 1, 2015 - Poster must be displayed; Must start using revised Notice to Employee for all new hires April 2, 2015 - 90 days prior to July 1, 2015 – must track employee’s pay and hours if paid a variable rate. By mid-June 2015 – Employers should distribute sick leave policy and update other policies to comply with new requirements July 1, 2015 - Accrual begins for all employees if employee meets eligibility requirements First pay period after July 1, 2015 - Must show employee how many sick days they have available on pay stub or other document at time of pay July 8, 2015 - Last possible day to provide Notice to Employee to existing employees, or other written notice setting forth policy
  18. 18. Commonly Asked Questions 1. Paid Sick Leave law requires employees to be provided with at least 3 days or 24 hours of paid sick leave annually, does that mean 3 days or 24 hours? • It means 24 hours. For enforcement purposes, DLSE interprets the reference to “three days” to state an equivalent of 24 hours (based on an 8 hour workday) and is not a limitation that can be used to prohibit a part-time employee from using at least 24 hours of accrued leave in a year. Therefore, the minimum amount that an employee must be allowed to take cannot fall below 24 hours. Paid Sick Leave 18
  19. 19. Commonly Asked Questions 2. Can the employer choose either 3 days or 24 hours of Paid Sick Leave? • No. The 3-day requirement is interpreted to mean 24 hours based on an 8- hour work day. Even if an employee’s work day is less than 8 hours the employer may NOT limit Paid Sick Leave hours to less than 24 hours. Again, the minimum amount that an employee must be allowed to take cannot fall below 24 hours. Paid Sick Leave 19
  20. 20. Commonly Asked Questions 3. Does it matter whether an employee is full-time or part-time? • No. An employee who works at least 30 days within a year in California, including part-time, per diem, and temporary employees, are covered by this new law with some specific exceptions. • Specific exemptions: • Providers of publicly-funded In-Home Supportive Services (IHSS) • Employees covered by collective bargaining agreements with specified provisions • Employed by an air carrier as a flight deck or cabin crew member, if they receive compensated time off at least equivalent to the requirements of the new law. Paid Sick Leave 20
  21. 21. Commonly Asked Questions 4. What if an employee works an alternative workweek schedule? • Still rather unclear, however, Department of Industrial Relations has explained that an employee who works 4-day/40-hr week can use 30 hours of paid sick leave since their normal day is 10 hours. • The DIR states: “if you (employee) have accrued 30 hours then because the minimum requirements of the statute are 3 days or 24 hours, you (employee) will have to be paid for 30 hours.” Paid Sick Leave 21
  22. 22. Commonly Asked Questions 5. What if an employer has an unlimited time off policy? • An unlimited time off policy eliminates any issues with employees not accruing enough Paid Sick Leave hours, however, it may cause other issues. • Most employers who have an unlimited time off policy do not track how much time employees take off or why. The new law requires that employers separately track sick leave accrual and use. • Employers who choose to use an unlimited time off policy must ensure that they track how much time each employee takes off and why they took that time off. Paid Sick Leave 22
  23. 23. Commonly Asked Questions 6. Can an employer require employees to provide a doctor’s note use Paid Sick Leave? • No. However, you may request that employees provide a doctor’s note to use their Paid Sick Leave. Paid Sick Leave 23
  24. 24. Employment Documents for New Hires • What’s required and what’s recommended. • State and federal laws require employers to provide new hires with some specific documentation. 24
  25. 25. Employment Documents for New Hires Requirements for all new hires: 1. I-9 Employment Eligibility Verification 2. W-4 Employee Withholding Allowance Certificate 3. Right to Workers’ Compensation Benefits pamphlet 4. DE 2515 – State Disability Insurance Provisions pamphlet 5. DE 2511 – Paid Family Leave pamphlet 6. California Sexual Harassment pamphlet 7. New Health Insurance Marketplace Form (Coverage Offered or Not) 8. Written Commission Agreement (if the employee is commissioned) • Should include specifics on how commissions are calculated and paid. • Both employee and employer should sign and retain copies. 9. COBRA Notice 25
  26. 26. Employment Documents for New Hires Additional Requirement for Non-Exempt/Hourly Employees: Notice to Employee form • Note that this form was updated for 2015 to include coverage of CA’s new Paid Sick Leave law. • No need to re-issue form to current employees. 26
  27. 27. Employment Documents for New Hires We recommend issuing the following documents to your new hires: • For all employees: Employee Handbook that sets forth your employment policies and an Acknowledgment of Receipt for the new hire to sign. • For Non-Exempt/Hourly Paid Employees: Meal and Rest Break Acknowledgment that sets forth your policies for added emphasis. 27
  28. 28. Maintaining Employment Files • Employers have a duty to maintain personnel and payroll documents, in some cases for up to several years. • Employers must also be prepared to produce personnel and payroll documents on demand to any current or former employee who requests copies. • There are rules governing how and in what timeframe the documents must be provided to a requesting employee. • We recommend that you consult with an attorney if you receive a request for employment documents, or have questions about maintaining your personnel and payroll documents. 28
  29. 29. Termination Documents What documents are required to be provided to employees at termination/separation? • Paycheck (at the time of termination or within 72 hours if employee quits without providing 72 hours notice) • Notice to Employee as to Change in Relationship • “For Your Benefit, California’s Program for the Unemployed” pamphlet published by the EDD (Form 2320) • COBRA Notice • Health Insurance Premium (HIPP) Notice (DHCS 9061) 29
  30. 30. 2015 - Driver License Information is Confidential: • Vehicle Code section 12801.9 • Any driver’s license information obtained by an employer shall be treated as private and confidential. Driver’s license information cannot be disclosed to any unauthorized person or used for any purpose other than to establish identity and authorization to drive Privacy Issues 30
  31. 31. Personnel Information • Vehicle Code section 12801.9 Photos/fingerprints Social Security Numbers • Understand responsibilities in maintaining this information. Social Media Passwords? Privacy Issues 31
  32. 32. Lessons to learn form Sony’s data breach: 1. Must take appropriate security measures to make sure files that contain sensitive information are safe. • Legal standard: negligently failing to protect the data – what would a reasonable company do to protect private data. 2. Have plan in place if there is a security breach. • Understand responsibilities under the law before a breach occurs. • Know what type of disclosure you have to provide and how it may be provided (electronically or written) 3. Understand the software being used. 4. Train employees who have access to confidential information about: a) Duty to keep information confidential and best practices b) Phishing scams and how to recognize potential threats • Some employers are now even sending spoof phishing e-mails to see which employees click on them Privacy Issues 32
  33. 33. Presented by Anthony Zaller, Esq. Jennifer Grock, Esq. Janice Miller, Esq. Rachel Weise, Esq. 6310 San Vicente Blvd, Suite 430 Los Angeles, CA 90045 (323) 592-3505 www.vtzlaw.com UNDERSTANDING CALIFORNIA’S NEW PAID SICK LEAVE LAW AND EMPLOYMENT DOCUMENTATION REQUIREMENTS 33 Download slides at: http://elr.io/maypaidsickleave