When California’s sick leave law went into effect in 2015, many employers—especially national employers—did not change their pre-existing sick leave or paid-time-off (PTO) policies because those policies exceeded the requirements of the law. The accrual and usage limits permitted by the law were seen as too draconian or too cumbersome to be attractive, so employers left well enough alone. Now, these employers are facing an unintended consequence of this decision: the inability to hold employees accountable for the excessive use or abuse of their sick leave entitlement. This advisory explores the complex constraints limiting the ability of California employers to enforce attendance policies and outlines methods to avoid unintended consequences.

For decades, employers have had policies whereby employees who miss excessive amounts of time at work are counseled, disciplined and, eventually, even terminated. Often these policies are “no fault” policies, under which the reason for the employee’s absence is irrelevant: it is simply a matter of the employee being gone so frequently or so long as to warrant attention and, potentially, separation. Likewise, employers with traditional performance evaluation programs often rate employees on “attendance” or “reliability,” characterizing them as “unsuccessful” or less-than-satisfactory when their attendance is spotty.

Beginning with the passage of such laws as the Americans with Disabilities Act in 1990 and the Family and Medical Leave Act (FMLA) in 1993, employers have been constrained in their ability to apply their attendance policies to certain absences. Although not without a measure of continuing frustration, employers have come to accept that they must not count against an employee’s performance record certain legally-protected absences, such as absences covered by an FMLA “intermittent leave,” or some absences attributable to pregnancy. Similarly, employers have learned that they sometimes must accept an otherwise unacceptable attendance record as an accommodation to a disabled employee. 

Against that backdrop, along comes California’s sick leave law giving employees the right to accrue and take sick leave beginning July 1, 2015. Under this law, employers must provide employees with a paid sick leave program that meets certain minimum standards. Although there are alternative methods for awarding sick leave, the most straight forward method allowed by the law is the accrual method: 1 hour of sick leave accrues for every 30 hours an employee works.  California employers may cap sick leave accrual at 48 hours or 6 days, whichever is greater, and cap the annual usage of sick leave at 24 hours or 3 days, whichever is greater. These caps are neither mandatory nor automatic—employers must affirmatively adopt them in order to take advantage of them. An important caveat to note is that employees in the California cities of San Francisco, Oakland, and Emeryville (and, soon, Santa Monica) are covered by local ordinances that have higher accrual caps and do not permit usage caps—so the options for employers in those cities are more limited and more complicated.

A fundamental mandate of the law is that employers cannot retaliate against employees who use sick leave (or PTO) that is provided in accordance with the law. The no-retaliation restriction expressly prohibits counting the proper use of legally mandated sick leave against employees for discipline or performance review purposes.

Now comes the harsh reality for employers who opted to provide sick leave or PTO on terms more generous than what the law requires—often with more generous accrual and no usage cap—without differentiating this sick leave or PTO from California-mandated sick leave: they likely are constrained in their ability to apply attendance policies or performance-review-attendance standards to any amount of employee usage of sick leave or PTO. Of course, if an employee has fabricated the reason for using sick leave, or has used sick leave for a reason that the law does not protect, or has failed to properly report the absence, the employer is able to apply normal attendance standards and to discipline for the absence. But otherwise, discipline or counseling for the use of sick leave or PTO creates a risk of exposure to a claim of unlawful retaliation. 

This reality is causing many employers to revisit their method of complying with the law. For example, instead of having one bucket of undifferentiated sick leave or PTO, some employers are moving toward a two-bucket program: one bucket of sick leave that takes advantage of all the limits the law allows, the usage of which is without penalty; and a second bucket of sick leave or PTO that is more generous than the law requires, the usage of which is subject to the employer’s attendance standards and discipline policies.

This solution is not without its own challenges and exceptions. For example, California’s newly amended “kin care law” provides for the protected use of up to one-half of the employee’s annual accrual entitlement for not only the illness and preventive care of the employee’s family members, but also for the employee’s own illness and preventive care. Thus, care must be taken to assure that the amount of sick leave or PTO accrued in the second bucket does not exceed twice the amount that may be accrued in the first bucket annually. And the use of sick leave or PTO from either bucket during FMLA and pregnancy disability leaves remains protected, as does time taken in accordance with the reasonable accommodation of a disability.

Given the many complexities of California’s sick leave law, especially with the overlay of city ordinances, it is important that employers review their existing policies and make sure that the individuals responsible for administering them are aware of and complying with each part of the law, including the notice and posting requirements as well as the no-retaliation requirements. If original plans for complying with the law are proving unworkable, a careful rewriting of existing policies may be in order.