Are you abiding by the new Healthy Workplace Healthy Families Act of 2014?

Are you keeping your employees informed about the amount of paid sick leave they have per pay period via their pay stub or other written notice? Have you been displaying a Healthy Workplace Healthy Families Act of 2014 poster in your office since January 1st of this year? Are you aware that the amount of paid vacation time your employees receive must be greater than the amount of their accrued paid sick leave?
If at this point you are scratching your head in confusion as to what this means for you as a business owner, do not worry! We have outlined what the Act does, when it goes into effect, and what you have to do to make sure your business is in compliance with the new law.

The Healthy Workplace Healthy Families Act

First and foremost, let us explain what this Act was intended to do. With paid sick leave becoming a growing issue in California, the Act is meant to regulate and create a uniform structure that will be beneficial to both employers and employees. Starting on January 1, 2015 the Healthy Workplace Healthy Families Act became the new standard. Employers must display a Healthy Workplace Healthy Families Act poster (you can obtain a copy of the poster on the Department of Industrial Relations for the State of California’s website) for all employees to view. As an employer, notice of this Act must also be given to all new hires. This Act allows employees to accrue paid sick leave based on the amount of hours they work for their employer.

What the Healthy Workplace Healthy Families Act Requires

While the Act came into effect in January, accrual does not begin until July 1, 2015. This means that starting on July 1st, provided the employee has met all eligible requirements, the employer must give each employee one hour of paid sick leave for every thirty hours worked. For example, if an employee works forty hours per week, they will accrue 1.33 hours of paid sick leave. This accrual system does not differ between part-time and full-time employees. Both are entitled to the rate of one hour of paid sick leave per forty hours of work. While there is no minimum amount of paid sick leave, the employer does have the option to implement a policy to cap the accrued sick pay at forty-eight hours, given that under the new Act, any unused accrued paid sick leave must roll over to the next year until it is used by the employee. An employer can also limit the use of paid sick leave to twenty-four hours per year if they choose. In any of these circumstances, the employer must notify the employee in advance and in writing.
In addition to the accrual system, there are a few other things to take note of regarding the new Act. The hourly rate of paid sick leave must be paid at the employee’s current rate of pay. If the employee is paid on any form of commission, then the hourly rate will need to be calculated based on the formula that can be found on the Department of Industrial Relations for the State of California’s website. In the event of a termination or resignation, the employer is not required to pay out any accrued sick pay, but if the employee is rehired within one year, then all previously accrued sick days will be reinstated.

Alternatives to the Healthy Workplace Healthy Families Act

If you do not wish to adopt the new Act into your business, you may have an alternative. An employer can choose to provide twenty-four hours of paid sick leave to an employee, regardless of hours worked, on a twelve-month basis. This eliminates the need to keep track of accrual hours, and the employer is not required to provide a carryover of unused days. However, the employer does still have to provide proper notice to the employee of this method, and the employer must still keep the poster referenced above in sight for all employees to view. An employer can always offer an employee more paid sick leave, but not ever less, than the accrual system will allow. Employees exempt from this plan include: (1) those covered by a collective bargaining agreement; (2) in-home support services employees; and (3) airline flight deck employees who have equivalent benefits. It is important to keep in mind that this Act does not abolish any local ordinances regarding paid sick leave if that city or county ordinance is more generous than the Healthy Workplace Healthy Families Act of 2014.
As a business owner, it is important to stay current on all changing legislation and regulation regarding your business practices. If at any point you need any corporate legal services, feel free to give us a call or send us an email.

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