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

Paulette Stout

California’s new paid sick leave law went into full effect as of January 1, 2024. It raised the minimum required hours of paid sick leave to 40 hours or five days, but there’s much more to the rule than that. Every organization that has workers in California must know and follow the new requirements. 

Which workers are eligible

The new law applies to all California employees who work more than 30 days for the same employer in a given calendar year and who have also completed an initial 90-day working period without taking sick leave. In-home, part-time, and per-diem workers are covered by the law as well, and so are temporary workers. While the overwhelming majority of workers are eligible for benefits under the new law, there are some exceptions:

  • Air carrier workers, if they receive time off comparable to the new law
  • Railroad employees
  • Construction industry workers covered by collective bargaining
  • Retired US intelligence workers still eligible for assignments

Note that there are updated conditions for exemptions under collective bargaining agreements, ensuring that employers provide comparable or better sick leave benefits for these workers. When exempt, the new law does protect employees from having to find replacement staff in order to use their sick time.

Implications for seasonal workers

There are some provisions meant to help seasonal workers that employers must know. For instance, the 90-day working period does not need to be continuous. If an employee accrued time over a working period of 60 days leaves the organization but returns within the same calendar year, a business must credit the worker for their previously accrued time. The only exception is for workers who cashed out their paid sick leave at the end of their initial employment period. These workers must start accruing time fresh, as would any new worker. 

How paid sick leave changes under new California law

California increased the minimum paid sick leave allowance from 24 hours or three days (whichever is greater) to 40 hours or five days (whichever is greater). But the new law changed the use limits for workers as well. Before, employers could limit employee use of paid sick leave to 24 hours or three days and capped the overall accrual at six days. Those limits have now been raised to five used days per year, with accruals now capped at 80 hours or 10 days. In practical terms, the differences in days/hours have huge implications for businesses, so it’s critical to understand the new requirements. 

California’s days/hours requirement explained

The days/hours rule can result in significant differences in time off allowances, most notably for employees working long hours each day. For example, if an employee works 11-hour days, then they would be eligible for 55 hours of paid sick leave per year (5 days x 11 hours). That’s because the law grants the greater of 40 hours or five days. In this example, the hours worked tallied more. Conversely, if an employee works seven-hour days, even though their five-day allotment totals 35 hours, they are still entitled to the greater tally of 40 hours of paid sick leave. 

There’s one important distinction when it comes to local laws. If a local jurisdiction requires a greater paid sick leave allotment than the state law provides, the business is nonetheless required to comply with the higher local standard. That’s because the law states businesses must follow “the provision or benefit that is most generous to the employee.” However, if a local law differs from state law in respect to matters related to sick leave—such as the lending of paid sick leave, calculation of sick leave, notice requirements, timing of sick leave payment, and payment upon termination—then the state law prevails

Accrual options for paid sick leave

Sick time can be allocated to workers following many different accrual scenarios. However, under California’s new law, employers must at least adhere to a 1:30 schedule. This equates to earning one hour of sick leave for every 30 hours worked. Additionally, workers must accrue at least 24 hours by the 120th calendar day of employment. The full 40 hours must be available to workers by the 200th calendar day of employment. 

While these are the minimum accruals, there are many different ways businesses can handle paid sick leave allocation.

Up-front policy

The minimum requirement has been updated to provide at least 40 hours or five days of sick leave available at the start of each year. If organizations grant up-front paid sick leave, the full award of time must be available at the beginning of their year. 

The 12-month period defined for time accrual

Organizations have the freedom to decide over what period they calculate their paid sick leave. Some may work on a calendar January – December year, others on their business fiscal which may begin and end in any month. Or, an employer may tally employee time based on their anniversary date of hire. All methods are acceptable. If an employer chooses to transition between accrual methods, shifting from up-front to a slower accrual method, they can prorate the employee hours based on the calendar term and the number of days due workers. Organizations may also choose to reset tallies for the new fiscal. Note that the law now allows for maximum caps on accrual at 80 hours or ten days, and annual use can be limited to 40 hours or five days.

Anti-retaliation protections

The law enhances protections against retaliation for using accrued sick leave, with specific provisions regarding presumed retaliation following complaints.

Existing employer plans and PTO

Organizations using paid time off (PTO) plans for their workers comply with the law if those plans meet the state-mandated minimums for accrual time and overall calendar year guarantees. Again, those are five days or 40 hours. So, if a PTO plan offers anything over five days, organizations are compliant. PTO plans must also permit the accrual of paid sick time to be ten days or 80 hours. 

Even if PTO has historically been earmarked for vacation use, as long as it exceeds the new California paid sick leave law guidelines, organizations are compliant. Businesses need not grant any additional days above what has already been given. 

The same standard applies to organizations with unlimited paid sick leave. “Unlimited” by definition exceeds the state standard of 40 hours, so organizations simply note that paid time off is unlimited on worker pay stubs. 

Permitted uses of paid sick leave under new law

Paid sick leave can be taken for a host of purposes, including for a worker or family member. Permitted uses include:

  • Preventative care for the employee or family member
  • Treatment for an existing health condition
  • Services associated with domestic violence, sexual assault, or stalking
  • Annual physicals and seasonal immunizations

The law defines “family member” as the employee or their parent, child, spouse, registered domestic partner, grandparent, grandchild, sibling, or a designated person. 

Employer notification requirements

Workers must notify employers of their intention to use sick time as soon as is practical. For emergencies or unforeseen illnesses that may come with very little notice. For planned sick leave, such as for surgery, workers are expected to give employers as much advance notice as possible. 

Protections for workers under California’s paid sick leave law

One important worker protection is forbidding employers to ask for proof of a medical visit, illness, or treatment to validate sick day use. Rather, employees are entitled to use sick time simply by making a verbal or written request. Employers may, under certain circumstances, ask for documentation if they have information demonstrating that the worker took leave for an invalid purpose. 

Note that the law only protects employee use of properly accrued time taken for legally protected purposes. It does not protect any unexcused absence or sick day taken despite having zero accrued time available. Those non-covered absences may incur employer discipline, and they would be well within their right to do so. Outside of this, however, employers are banned from any type of professional retribution or sanctions on workers for using their available sick time. 

When taking sick time, an employee chooses how much to take. For example, employers are forbidden from setting minimum standards, such as taking sick time in full or half-day units. Employers may set a two-hour minimum when drawing down hours, but otherwise, the length of time used is up to the worker to determine.

Payment and tracking for earned pay sick leave

Worker payment for paid sick leave depends on their employee designation. Non-exempt workers should expect to be paid for sick leave within the same pay period. Used paid sick leave would earn workers their same hourly rate and be itemized on their pay stubs. Exempt worker pay would be calculated at the same rate as other time off, such as for vacation.

Sick leave hours must be tracked on a worker’s pay stub or by using another method available to workers at the same time. Many organizations have software or web portals used to track this information that can be made readily available to workers. This transparency helps workers and employers to manage paid time off with minimal confusion. 

While the state mandated the amount of paid sick leave time, workers are not entitled to cash out their unused hours unless their employer has an established policy to do so. 

The takeaway

California’s new law governing paid sick leave went into effect on January 1, 2024. It raised the minimum employer-mandated paid sick time from three days or 24 hours to five days or 40 hours, whichever is greater. It’s essential for organizations to understand the days/hours requirement, as some workers could be entitled to more hours based on their daily work schedules. Paid sick leave can be accrued in different ways depending on how the employer operates and when their 12-month accrual year starts and ends. Employers have the option to have workers accrue hours slowly over time or to use an all-up-front allocation. Regardless of how hours are accrued, workers must have access to at least 24 hours of sick time by their 120th day of employment. 

Permitted uses for paid sick leave include to receive medical treatment for themselves or a family member. What’s more, employers are forbidden from asking for proof of treatment, directing how sick hours are used, or taking retribution on workers who use legally accrued hours. Workers who take time off for non-protected purposes or take time off when they have none accrued may be sanctioned by their employers under law. However, for those properly accessing legally protected paid sick leave, California’s new paid sick leave law will likely prove to be worker-friendly legislation. Smart businesses would do well to thoroughly understand their new obligations. 

Paulette Stout Author of her debut novel, Love, Only Better, Paulette Stout is the gold-star wordsmith and owner of her content marketing agency, Media Goddess Inc., where she crafts content for her list of global clients. Prior to MGI, Paulette led content and design teams at several tech companies, and one educational publisher where her elimination of the Oxford comma caused a near riot. You can usually find Paulette rearranging words into pleasing patterns while wearing grammar t-shirts. Connect with Paulette on Facebook and Instagram at @paulettestoutauthor and on Twitter at @StoutContent.
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