Paid Sick Leave in California – What's New in 2024? (And, What's Next)

I think it’s safe to say that we’ve all been sick before.

But, did you know, that when our thermometer runs high, our box of tissues runs low, and our bottle of Aspirin becomes a best friend, saying that we’ve all had the security of paid sick leave is not nearly as intuitive?

In reality, 23% of private sector workers do not have access to even one paid sick day off.

As a result, stricter regulation of paid sick leave has become a high priority in California. With Senate Bill 616 coming into effect on January 1, 2024, it's crucial for California employers to pay close attention to the recent changes in paid sick leave laws.

In this article, we'll discuss the specifics of these updated laws.

By reading it, you'll learn the ins and outs of paid sick leave in California including:

• A breakdown of what's new in 2024
• A glimpse into why compliance with these law changes is critical
• And a projection for what could come next in paid sick leave legislation

Paid sick leave - The basics

Imagine you wake up feeling under the weather.

You're faced with a dilemma:

1. Go to work and potentially spread illness
   OR
2. Stay home and lose a day's pay

Beyond simply affecting the well-being of employees, this decision poses a public health risk to the larger workplace.

This is where paid sick leave comes into play as a third option.

Paid sick leave is a labor policy under the Healthy Workplaces, Healthy Families Act of 2014 that allows employees to take time off from work while still receiving their regular pay.

It stipulates that employees who have worked a minimum of 30 days in California within an annual period are eligible to accrue sick leave. However, it's important to note that employees must be given access to their accrued paid leave beginning on the 90th day of employment with their current employer.

It's designed to provide financial security for employees who need to be absent due to illness, medical appointments, or caring for a sick family member.

Not only does this policy protect employees, but it also benefits employers by contributing to a healthier, more productive work environment.

Standard methods for offering paid sick leave

When it comes to offering paid sick leave, employers have different options to meet both legal requirements and the needs of their workforce.

Here's a quick overview of the most common ways to provide paid sick leave to employees:

Accrual system

In this system, employees earn sick leave hours based on the number of hours they work.

For example, an employee might accrue one hour of sick leave for every 30 hours worked. This method allows for a gradual build-up of sick leave.

Upfront allocation

Some employers opt for a lump-sum allocation, providing employees with a set number of sick leave hours at the beginning of the year or employment period.

This approach offers immediate availability of leave but may require careful management to ensure the hours last throughout the entire year.

Unlimited sick leave

Though less common, some companies offer unlimited sick leave as a part of a broader unlimited PTO policy.

This method trusts employees to use their time responsibly and can be a significant perk in attracting top talent. However, it requires a strong company culture and responsible employees to function effectively.

Hybrid models

Some employers use a combination of these methods, such as offering a lump sum for short-term illnesses and an accrual system for extended medical needs.

This hybrid approach aims to offer flexibility and cover various types of health-related absences.

Paid sick leave in California - What's new in 2024?

Now that you know what paid sick leave is, let's discuss the recent changes to California's paid sick leave laws and what they mean for you and your business.

Senate Bill 616

Effective January 1, 2024, Senate Bill 616 brings significant changes to paid sick leave in California.

Here are the updates taking effect on January 1, 2024:

Increased paid sick leave accrual

The update requires employers using an alternative accrual method to provide no less than 40 hours or 5 days of accrued sick leave by the 200^th calendar day of employment or in each 12-month period. This change is in addition to satisfying the current requirement of providing no less than 24 hours or 3 days of paid sick leave by the 120^th calendar day of employment.

This change marks a considerable increase in the amount of mandated paid sick leave. Previously, employers only had to offer 24 hours or 3 days of accrued sick leave by the 120^th calendar day of employment. Now, on top of these hours, employers must offer an additional 16 hours or 2 days of accrued sick leave within the span of 80 calendar days following the 120^th calendar day of employment.

For Example, currently, a part-time retail worker juggling school has to wait 4 months to accrue just 3 days of sick leave. With the new updates, 5 days will be available within less than 7 months of employment, affording a better safety net if they catch the flu or need a mental health day.

Increased paid sick leave accrual cap

Senate Bill 616 also increased the accrual cap from 48 hours or 6 days to 80 hours or 10 days. This means employees can carry over a larger balance of unused sick leave from year to year, providing a more substantial cushion for unforeseen medical emergencies.

Increased upfront sick leave requirement

For employers who provide the full amount of leave at once rather than through accrual, the new requirement is to offer 40 hours or 5 days to their employees upfront. This represents a notable increase from the previous allocation of 24 hours or 3 days.

In this case, the accrual cap and carryover requirements do not apply since leave is distributed as a sum for the whole year.

New compliance documentation

Employers in California must update their employee handbooks, workplace posters, and new hire packets to reflect these changes.

The current "Notice to Employee" and "Paid Sick Leave" posters have not yet been updated, so it's important to monitor for these modifications and make sure that all required postings are available to employees beginning in 2024.

Penalties for noncompliance – Don't risk it, it's not worth it

Failing to comply with California's Paid Sick Leave laws is a risky business move that can result in severe consequences.

So that you can better understand the gravity of staying compliant, here are the types of penalties employers may face if they don’t adhere to these laws:

Administrative fines

Employers who fail to offer the required paid sick leave could face an administrative fine of up to $4,000 per violation.

Think about how quickly that could add up!

Legal repercussions

Employees also have the right to file a lawsuit against their employer for noncompliance.

This could not only result in additional fines but also hefty legal fees.

Back pay and interest

Employers may even be required to provide back pay for the sick leave that was not granted, along with interest.

In other words, the longer you wait to correct this, the more you'll owe.

Reinstatement and compensation

In extreme cases, employers may be required to reinstate employees who were terminated for issues related to paid sick leave.

This also includes compensating these employees for lost wages, which can be a substantial sum.

Reputation damage

Beyond the financial and legal penalties, failing to comply can severely damage your company's image and reputation.

And, in today’s age of social media, word spreads fast, and a bad reputation can take years to rebuild.

Want more information on all of 2024's most critical compliance updates?

Download our free compliance guide or watch our latest recorded webinar hosted by legal expert, Jason T. Yu, Partner with the law offices of Snell and Wilmer, for a complete breakdown of California's recent regulation changes. 

Paid sick leave – A projection for what's next?

While it's difficult to predict legislative changes with certainty, the changes to California’s paid sick leave laws, along with current studies on the advantages of paid sick leave, may hint at further regulation.

Is federal legislation on paid sick leave a possibility?

California is not the only state where paid sick leave has become of high interest.

Studies across the U.S. have confirmed that providing adequate paid sick leave is overwhelmingly beneficial to employers and employees alike.

A recent study by Florida Atlantic University and Cleveland State University found that paid sick leave is good for business. In fact, it found a direct link between paid sick leave and both fewer occupational injuries and a reduced spread of contagious diseases in the workplace. But here’s the real kicker, paid sick leave also showed a notable correlation with higher business profitability.

Additionally, according to County Health Rankings & Roadmaps, the benefits of paid sick leave extend beyond just the sphere of business. Their findings report that increased access to paid sick leave can even improve health outcomes and potentially decrease social disparities.

With these studies in mind – and California as a precedent for paid sick leave legislation – could a federal mandate could be on the horizon?

Take the next steps to leave your compliance concerns behind

Navigating compliance is a never-ending job - who knows what will happen next?

But that’s why you’re here. To learn how you can keep your policies parallel with new law changes and your business free from compliance concerns.

That’s also why we are here. At Combined, we are committed to providing the tools you need to steer your business toward success.

By reading this article, you know exactly how to comply with the new paid sick leave laws taking effect in California at the beginning of 2024. With this information, managing your paid sick leave policies within the upcoming parameters of compliance should be no problem.

But, if it is, we are here to help! Our team of HR experts can provide unmatched compliance assistance with paid sick leave and much more.

Let us help you put compliance problems in the past!