COVID-19 resources

California’s Paid Sick Leave Law: What Employers Need to Know

Square
Editorial Team

California’s sick leave law was created by Governor Jerry Brown when he enacted the Healthy Workplaces, Healthy Families Act of 2014. As of July 1, 2015, California requires all employers to offer a minimum amount of paid sick leave to employees each year – usually one hour for every 30 hours worked.

In addition to the state sick leave law, some California employers may be required to offer emergency paid sick leave as defined in the Families First Coronavirus Response Act (FFCRA).

We know regulations like this can be daunting — not to mention confusing. We’ve listed the basics of what you need to know, as an employer, about California’s paid sick leave law. (Visit this article for more details about the FFCRA.)

Even if your business isn’t located in California, it’s a good idea to stay up to date with the latest developments in this area, as there’s an increasing push to make paid sick leave a federal law. While this post can be a helpful resource, you should contact your state’s labor office or consult a professional if you have questions specific to your business.

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Basics of California’s sick leave law

How am I affected?

As of July 1, 2015, California requires employers to offer a minimum amount of sick leave to employees each year. This means employers must keep track of how much sick leave employees have accrued, report their balance every pay period, and pay employees for sick leave taken that’s within their balance.

Who qualifies for California’s sick leave law?

All California employees who work more than 30 days in a year qualify, including part-time and temporary employees, with some specific exceptions.

How do I determine how much sick leave an employee can take?

You can either accrue sick leave each pay period based on hours, or offer employees a lump sum at the beginning of each year.

If you choose the accrual method, you must provide at least one hour of paid leave for every 30 hours worked. If you choose the lump sum method, you must offer three days (24 hours) at the beginning of the year.

Note that if you choose the accrual method, you can choose to start accruing sick leave on July 1, 2015, for employees that were hired before July 1, 2015. Services like Square Payroll can help with automatically calculating accrual and keeping track of sick leave taken.

How do I need to report sick leave in California?

California employers must show how many days of sick leave employees have available on their pay stub or on a document issued the same day as their paycheck. Services like Square Payroll can help by automatically calculating and reporting your employees’ sick leave balance on their pay stubs.

How do I pay out sick leave to employees?

Sick pay should be paid out at the employee’s regular hourly rate. If an employee stops working for you, you’re not required to pay out the remaining sick leave balance.

What if an employee doesn’t take sick leave?

Employees can roll over up to 48 hours of accrued, untaken sick leave — although you can still limit the amount of sick leave taken in a year to 24 hours. If you provide employees with a lump sum of at least 24 hours at the beginning of the year, then you’re not required to roll over the remaining balance at the end of the year.

What are the exemptions to California’s sick leave law?

Generally speaking, there are very few exceptions to California’s sick leave law. It applies to most kinds of employees and is also includes (but is not limited to) part-time workers who worked overtime, temporary and seasonal workers, and employees of staffing agencies and contractors.

Exemptions to the California sick leave law include:

  • In-Home Supportive Services (IHSS) employees
  • Select airline cabin crew and aviation employees
  • Construction industry employees and other employees covered under a collective bargaining agreement, whose calculated hourly pay is not less than 30% more than the state minimum wage. As of January 1st, 2016 the statewide minimum wage in California is $10 per hour.

California Sick Leave Compliance checklist

To be compliant with new and existing sick leave requirements in California, here’s a checklist of what you need to do as an employer:

  1. Decide how you’ll calculate, track, and report each employee’s sick leave balance. Services like Square Payroll can help by automatically calculating and reporting your employees’ sick leave balance on their pay stubs.

  2. Provide a written copy of your sick leave policy to employees at the time of hire (example document).

  3. Display a poster explaining your sick leave policy.

  4. Provide at least three days (24 hours) of paid sick leave to each eligible employee per year.

  5. Show how many days of accrued sick leave employees have available, either on their pay stub or a document issued the same day as their paycheck (use this template or check out Square Payroll).

  6. Keep records of hours earned and used for a period of three years.

Read more about California’s new paid sick leave law here.

Local ordinances

Some cities in California have local mandates that require additional sick leave for employees, in addition to the state sick leave law requirements. Often times these local laws supersede the state’s paid sick leave policy, especially those that provide greater sick leave benefits to employees.

This includes but is not limited to the following cities:

The Square Editorial Team is dedicated to telling stories of business, for business owners. Our team comes from a variety of backgrounds and share a passion for providing information that helps businesses to start, run, and grow. The team is based in San Francisco, but has collaborators all over the country.