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Although the California sick leave law (Healthy Workplaces, Healthy Families Act of 2014) took effect in July of this year, employers are already anxious for clarification on its practical application. In mid-July, certain issues were clarified through urgency legislation amendments (addressed in our previous newsletter). On August 7, in an opinion letter, the Labor Commissioner issued an employee-friendly interpretation of the legislation as it applied to employees who work 10-hour shifts.
The following question was posed to the Labor Commissioner:
If an employee currently works a regular 10 hour shift, and if the employer elects to proceed under a “no accrual or carry over” system in the manner specified in Labor Code section 246, subdivision (d), does the employer have to “front load” that employee at the beginning of the year with 30 hours of leave (three days at 10 hours per day) or only with 24 hours of leave on the theory that a “day” is limited to a maximum of eight hours?
The Labor Commissioner responded that the paid sick leave law establishes only the minimum standards for providing paid sick leave. Further, the “24 hours or 3 days” alternatives should be applied in a manner that provides the most benefit to employees and avoids employees losing any compensation they would have regularly earned for a day’s work. Simply put, under the new law, an employee must receive the greater of 24 hours or 3 full days of paid sick leave.
In this case, that would mean the employer should front load 30 hours (or three 10-hour days) of paid sick leave to employees who work 10-hour shifts. Conversely, for those employees who work shifts of fewer than 8 hours, the opinion states that the statute requires, as a mandatory minimum standard, that those employees receive 24 hours of sick leave rather than 3 working days. So, for example, an employee who works 6 hours per day would have his/her sick leave account front-loaded with 24 hours of sick leave time rather than 18 hours (3 days x 6 hours per day).
But this opinion’s reach extends beyond the specific question at issue, as the Labor Commissioner further explained that the same analysis above would likewise apply to the usage cap (24 hours or 3 days) under the accrual method. Therefore, the lowest usage cap that an employer can impose on an employee who works 10 hours per day is 30 hours in the 12-month period, and the lowest usage cap that an employer can impose on an employee who works 6 hours per day is 24 hours in the 12-month period.
The letter summarizes the Labor Commissioner’s position as follows:
This interpretation of “24 hours or three days” of paid sick leave, for either the front load requirement or the use limitation, as specifying alternative but equally applicable minimums, neither of which may be undercut for any employee (i.e., the employee is entitled to either 24 hours or three days, whichever is more), protects all employees, including those that may work a regular work schedule of more than eight hours per day, as well as those who regularly work less than eight hours per day… To limit a part-time worker who works four hour days to only 12 hours of paid sick leave, based on a “three day” standard, disregards the statutory reference to a minimum of 24 hours and would defeat the legislative objective of providing low wage workers with at least a minimum of 24 hours of paid sick leave per year.
This opinion letter specifically affects the application of sick leave policies for non-exempt employees who normally work more or less than 8 hours per day. Exempt employees are deemed to work 40 hours per week under the Act, except for those who work fewer than 40 hours per week.
- For those employers using the front-load method, a lump sum should be granted to employees at the beginning of the 12-month sick leave year as follows:
- Employees who work 8 hours or less per working day should receive a lump sum of 24 hours
- Employees who work more than 8 hours per working day should receive a lump sum in the amount of the hourly equivalent of 3 working days (e.g., 30 hours for employees working 10-hour shifts).
- For those employers using the accrual method, the usage cap per sick leave year is limited as follows:
- Employees who work 8 hours or less per working day may have their sick leave usage capped at no less than 24 hours per year
- Employees who work more than 8 hours per working day may have their sick leave usage capped at no less than the hourly equivalent of 3 working days (e.g., 30 hours for employees working 10-hour shifts).
Although Labor Commissioner opinions are not legally binding precedent, they are useful authority in the absence of other legal authority and are certainly indicative of how the Labor Commissioner would rule in the context of their own administrative cases.
The Labor Commissioner did not address whether the same interpretation applies to the employer’s right to cap sick leave accrual at 6 days or 48 hours under the accrual method. If the usage standard also applies to the accrual provision, then employers would be required to allow employees who work under 8 hours per day to accrue at least 48 hours of sick leave and employees who work over 8 hours per day to accrue at least 6 times their daily hours worked (e.g., 60 hours for employees working 10-hour shifts). Although the Labor Commissioner did not express an opinion on this issue, such interpretation is in line with the overall reasoning of this opinion and is probably the safest interpretation for employers.
It is important for California employers to review their paid sick leave policies and practices in light of this opinion and to consult competent legal counsel.