This week, California Gov. Newsom signed Senate Bill 616, which increases the amount of Paid Sick Leave ("PSL") that employers are required to provide to California employees. The new PSL law amends California Labor Code sections 245.5, 246, and 246.5 (the "Healthy Workplaces, Healthy Families Act of 2014").

Effective January 1, 2024, employers must provide qualifying employees (working in California) with up to five (5) days/40 hours of Paid Sick Leave ("PSL") for use per year, an increase of the current law requiring three (3) days/24 hours of PSL. Like the current law, non-exempt employees must be paid PSL at their regular rate of pay.

PTO or Similar Accrued Leave Policies

SB 616 states that an employer is not required to have a separate PSL benefit if it provides paid leave to employees that may be used for: (1) the same purposes as protected PSL; and (2) under the same conditions as protected PSL law. In other words, if the employer already has a paid time off benefit that permits use of paid leave with the same protections as the new PSL law, no separate PSL benefit is required. Note, however, that in contrast to current law, SB 616 requires that covered employees accrue at least five (5) days or 40 hours of protected leave within six months of employment (current law is three (3) days within 120 days of employment).

Accrual Methods

Employers that provide a stand-alone PSL benefit pursuant to California law may continue to use an accrual method of one hour of PSL for every 30 hours worked in California. In the alternative, employers may also continue to use different accrual methods so long as employees have no less than five days/40 hours of accrued PSL by the 200th calendar day of employment or each calendar year.

Front Loading, Accrual Cap and Carryover

Operating like current law, SB 616 provides that if the employer front-loads 5 days/40 hours of PSL each year of employment (calendar year or 12-month period), no accrual or carryover of unused PSL is required. However, if the employer uses an accrual method, the new law requires the employer to increase the accrual and carryover cap to ten days/80 hours. So, if the employee accrues 10 days of PSL in 2024 and does not use it, that 10 days of PSL carries over to the next year. In such case, the employer may still limit usage of PSL to five (5) days per year.

In-Home Supportive Service Providers

SB 616 amends the schedule for in-home supportive service providers (IHSS) to increase their paid sick leave accrual to five days/40 hours in each year of employment.

Employees Covered by CBAs and New Anti-Retaliation Protections

The amended PSL law retains the previous exclusion of employees covered by a valid collective bargaining agreement if the agreement expressly provides for the wages, hours of work, and working conditions of employees, and expressly provides for paid sick days or a paid leave or paid time off policy that permits the use of sick days for those employees, final and binding arbitration of disputes concerning the application of its paid sick days provisions, premium wage rates for all overtime hours worked, and regular hourly rate of pay of not less than 30 percent more than the state minimum wage rate. In addition, SB 616 expressly provides procedural and anti-retaliation provisions for employees covered by valid collective bargaining agreements that are otherwise exempt from other provisions of the new law.

Preemption of Local PSL Ordinances Less Generous

SB 616 expressly preempts any local ordinance in effect that provides less protection than the amended law. Thus, the provisions of current local ordinances (there currently are eight in California) that permit a cap on accrual of less than 10 day/80 hours are preempted by SB 616. On the other hand, local ordinances that prohibit caps on usage must also be followed. For example, the local PSL laws of Oakland, San Francisco, Emeryville and Santa Monica do not permit caps on usage of accrued PSL. Similarly, employers with at least 25 employees in the City of Berkeley may not impose use caps. Any or all of these ordinances may be amended in the future, and DWT will update this blog.

Recommendations and Next Steps

We recommend that employers take the following next steps to achieve compliance:

  • Employers with paid leave benefits that can be used for protected PSL reasons should ensure that their current benefits are sufficient to comply with SB 616.
  • Employers with separate PSL policies issued pursuant to the current law should revise and update those policies.
  • Employers should ensure that payroll systems and paystubs are adjusted to meet the requirements of SB 616.
  • Employers should remain abreast of any changes in local ordinances that arise as a result of SB 616.
  • Ensure that employees are provided notice of the new law and the employer's new policies. While the Labor Commissioner has not yet issued a sanctioned notice for employers to provide to employees, we expect that such a notice shall be published in sufficient time to provide to employees. DWT shall update this blog when that notice becomes available.

If you have questions about the new law, please reach out to the authors or any DWT employment attorney in California.