ATTENTION EMPLOYERS: CRITICAL UPDATE REGARDING JULY’S NEW SICK LEAVE LAWS

by Michelle Ferber and Ben McDonald

The Division of Labor Standards Enforcement (DLSE) for the California Department of Industrial Relations has provided critical guidance regarding the notorious new paid sick leave laws that came into effect this past July.  Specifically, the DLSE has issued an official interpretation of the “24 hours or three days” language from the law that is used to calculate an employee’s lawfully mandated paid sick leave allowance.  This language applies regardless of whether an employer chooses the front-load method or the accrual method in calculating required sick leave for employees, making this a crucial update for all employers.

According to the law, employers are required to provide eligible employees with “24 hours or three days” of paid sick leave per year.  The DLSE announced that “24 hours or three days” means that an employer must provide an employee with 24 hours or three days, whichever is more for the employee.  This interpretation means that the quoted language cannot be interpreted to minimize the sick leave owed to an employee; it can only be interpreted to maximize it.  While this linguistic construction sounds simple enough, it has less obvious yet highly significant effects.

To see these potential effects, consider the scenarios of an employee who works less than 8 hours per day, and an employee who works more than 8 hours per day.  If an employee works only four hours per day, the employer may be tempted to provide only 12 hours of paid sick leave because “three days” of work for that employee is 12 hours.  Conversely, if an employee works 10 hour days, the employer may be tempted to provide only “24 hours” of paid sick leave, as the law seems to permit.  However, according to the DLSE, both of these calculations are incorrect and expose the employer to liability.

In these scenarios, the choice of calculating paid sick leave based on either “24 hours” or “three days” permitted the employer to minimize the amount of paid sick leave required for the employee.  The DLSE’s announcement means the law must be applied only to maximize the amount of paid sick leave an employee is entitled to.  Therefore, the proper amount of paid sick leave for the four-hour employee is 24 hours, and for the 10-hour employee, the proper amount of paid sick leave is actually 30 hours because “three days” of work for the employee is 30 hours.

Boiled down, the DLSE announced that “24 hours or three days” means that an employer can never offer less than 24 hours to an employee who is entitled to sick leave.  Moreover, that employer may even have to provide more than 24 hours in order to give an employee three full workday’s worth of paid sick leave.  This standard applies regardless of whether an employer front-loads employees with their sick leave, or sets a maximum (or cap) that an employee can accumulate under the accrual method.

As July’s new paid sick leave law is applied and tested, its provisions will likely continue to be dissected and interpreted in a myriad of ways.  While the unsettled nature of this law can leave employers feeling nervous, Ferber Law can provide both guidance and peace of mind for employers attempting to wade through the ambiguity.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.