Last week, the California Legislature passed Senate Bill 616 ("SB 616"), an amendment to California's statewide paid sick leave law that significantly increases the amount of leave that employers need to provide and permit employees to carry over from year-to-year. The bill was sent to Governor Newsom on Wednesday, and he is expected to sign it into law.
Many employers in California's major population centers already provide well in excess of the three days required under current state law. Santa Monica and several cities in the San Francisco Bay Area already mandate that employers provide up to 72 hours of paid sick leave, and California's most populous city—Los Angeles—requires up to 48 hours per year. However, for employers with workers outside these areas, SB 616 will significantly expand their sick leave obligations.
SB 616 increases the minimum amount of sick leave time eligible employees must accrue each year from 24 hours (three days) to 40 hours (five days). The bill preserves the existing accrual rate—i.e., one hour accrued for every 30 hours worked—but employers may use a different accrual method as long as eligible employees accrue: (a) no less than 24 hours (or three days) of paid sick leave by the end of their 120th day of employment; and (b) no less than 40 hours (or five days) of paid sick leave by the end of their 200th day of employment.
While the current law permits employers to cap annual sick leave usage to 24 hours or three days per year, SB 616 expands the permissible annual usage cap to 40 hours or five days. SB 616 also raises the total amount of paid sick leave that employers must allow employees to accrue over time and carry over from one year to the next from 48 hours (or six days) to 80 hours (or 10 days).
Employers who prefer to use an up-front sick leave allocation—a popular method due to its relative administrative ease—will now need to deposit 40 hours (or five days) of sick leave in employees' leave banks each year.
Although SB 616 continues to include an exception for employers covered by a valid collective bargaining agreement ("CBA") that provides for paid sick leave, subject to certain conditions, it requires that such employees be permitted to use sick leave for the same reasons as employees who are not subject to a CBA.
Given that the Governor is expected to sign SB 616 into law, California employers should plan to review their sick leave policies and practices before the end of the year.
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