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Recent Amendments to California's Sick Leave Law and the California Family Rights Act:
What You Need to Know
Below are some important and recent developments to California's Sick Leave law and to the California Family Rights Act. These changes are effective now. Please let us know if you have any questions after your review! In this Newsletter, you will find:

Changes To California's Sick Leave Law
On July 13, 2015 Governor Brown approved legislation entitled Sick Leave: Accrual and Limitations (AB304) (we will refer to this as "the amendment") which amends the Healthy Workplaces, Healthy Families Act of 2014. The amendment includes some important clarifications, which are outlined below.

1. The Employee Must Have Worked for Thirty Days in California for the Same Employer to be Eligible. The amendment clarifies that an employee who works in California for 30 or more days within a year from commencement of employment is entitled to paid sick days so long as the employee works at least 30 days within the previous 12 months with the same employer.
2. Can You Apply an Accrual Method Other than One Hour for Every Thirty Hours Worked? An employer may use a different accrual method, so long as the accrual is on a regular basis such that an employee has no fewer than 24 hours of accrued sick leave or PTO by the 120th calendar day of employment or each calendar year, or in each 12 month period. An employer can satisfy the accrual requirements by providing not less than 24 hours or three days of paid sick leave that is available for use by the completion of the employee's 120th calendar day of employment.

3. How to Include Accrued Sick Leave on Your Pay Stubs. You must include accrued and available sick leave on your itemized wage statement. The amendment clarifies that if your company provides "unlimited" sick leave (and we should talk about the risks of such a policy if you do!), the amendment clarifies that your itemized wage statement is compliant if it includes "unlimited" as the amount of accrued sick leave.

4. Limits of Three Days Use Per "Year." Unused sick days must carry over to the following year of employment (if you use an accrual system), but an employer may limit the employee's use of sick days to 24 hours or three days per year of employment. "Year" has been clarified to mean either (a) each year of employment, (b) each calendar year or (c) a 12-month period. The law remains that the employer can satisfy the accrual/carry over requirements (i.e., need not have an accrual system and need not allow carry over of sick leave) if the full amount of leave (24 hours or three days) is provided to the employee at the beginning of each year of employment, calendar year, or 12-month period.

5. A PTO or Paid Leave policy will satisfy the Amendment if . . . the company has a paid leave policy or PTO policy that allows leave for at least the same purposes as mandated by the Sick Leave law and if the policy satisfies ONE of the following (a) the accrual, carry over and use requirements of that policy are at least as generous as the Sick Leave law; (b) the company paid sick leave or PTO to a class of employees before January 1, 2015 through a policy or practice that used a regular accrual system by which an employee (including an employee hired into that group after January 1, 2015) had no less than one day or eight hours of accrued sick leave or PTO within three months of employment of each calendar year or each 12-month period, and the employee was eligible to earn at least three days or 24 hours of sick leave or PTO within nine months of employment; or (c) the paid time off is provided pursuant to specified provisions of the Government Code or a memorandum of understanding that meet the requirements of these provisions.

6. Reinstatement of Unused Sick Leave for Companies That Rely on Their PTO Plans to Satisfy the New Law. The amendment clarifies that a Company relying on its PTO policy need not reinstate unused PTO to a returning employee (so long as PTO is paid out on termination, in compliance with California law).

7. Calculation of Sick Leave Pay. Sick leave pay may be calculated with any of the following methods:

a. By using the regular rate of pay for the workweek in which the employee uses paid sick time, wehther or not the employee actually works overtime in that workweek;

b. By dividing the employee's total wages, not including overtime premium pay, by the employee's total hours worked in the full pay periods of the prior 90 days of employment;

c. In the same manner as the employer calculates wages for other forms of paid leave time.
8. Record Retention and Detail of Information Gathered and Retained. Existing law requires an employer to keep records for three years documenting the hours worked and paid sick days accrued and used by an employee and to make those records available to the Labor Commissioner upon request. The amendment clarifies that an employer has no obligation to inquire into or record the purposes for which an employee uses sick leave or paid time off. We recommend that you not make such inquiries.
Recent Amendments to
the California Family Rights Act
Certain key provisions of the California Family Rights Act ("CFRA") were amended effective July 1, 2015. These changes are intended to bring CFRA more in alignment with the federal Family and Medical Leave Act ("FMLA"). The key changes are described below, along with some remaining key differences between the two laws.
1. What is a "covered employer"? This definition now includes successors in interest of a covered employer or joint employers. Note, there is no criteria provided for determining whether multiple entities are in a joint employment relationship. The regulations simply state "[w]here two or more business exercise some control over the work or working conditions of the employee, the businesses may be joint employers under the CFRA." Where an employee is jointly employed by two or more employers, the employee's worksite is the primary employer's office from which the employee is assigned or reports unless the employee physically has worked for at least one year at a facility of a secondary employer, in which case the worksite is that of the secondary employer. The employee also is counted by the secondary employer to determine CFRA eligibility for the secondary employer's employees.
2. When Can You Deny Reinstatement or Maintenance of Health Benefits? An employer may deny reinstatement and continued insurance coverage to employees who fraudulently obtain or use CFRA leave. The burden is on the employer to demonstrate that the employee has engaged in fraudulent activity.
3. Changes to Eligibility Requirements. An eligible employee is one who has been employed for a total of at least 12 months prior to the commencement of the CFRA leave (changed from an employee who has been working in California more than 12 months).
4. What Constitutes a Break in Service? Employment periods prior to a break in service of seven years or more need not be counted in determining whether the employee has been employed by the employer for at least twelve months, except for a break in service caused by military service or a written agreement to the contrary. An employer can consider employment prior to a continuous break in service of more than seven years so long as the employer does so uniformly (applied to all employees with similar breaks in service).
5. "Worksite" for an Employee With No Fixed Worksite. Where an employee has no fixed worksite, their worksite will be the worksite to which they are assigned as their home base, from which their work is assigned, or to which they report. For example, if an employee works out of her home in California but reports to and receives assignments from the corporate headquarters in Nebraska, the headquarters in Nebraska constitutes the worksite for purposes of assessing whether there are 50 employees within a 75-mile radius.
6. Maintaining an Individual's Leave Even if Your Number of Employees Drops. Once an employee meets the eligibility criterion and gives notice of the need for a leave, the employer may not deny the leave, cut the leave short, or deny subsequent leave taken for the same qualifying event during the employee's 12 month leave period, even if the number of employees during that time drops below 50 within a 75-mile radius.
7. Becoming Eligible for CFRA During a Leave of Absence. If an employee is not eligible for CFRA leave at the start of a leave of absence because the employee has not met the 12-month length of service requirement, the employee may nonetheless meet this requirement while on leave because the leave to which the employee otherwise is entitled counts toward the length of service (but does not count toward the requirement that the employee work 1250 hours).
There are 21 additional amendments to CFRA. If you would like to read more, click here.

Be Aware: some key remaining differences between FMLA and CFRA:
1. Pregnancy disability is not a serious health condition under CFRA. There is a strong argument that an employer must maintain an employee's group health benefits for the entire time an employee is on pregnancy disability leave (up to four months) and a subsequent CFRA leave (12 weeks).
2. FMLA regulations permit an employer to contact the employee's health care provider to clarify or authenticate a medical certification.
3. The standards for seeking second opinions differ between FMLA and CFRA. Under the FMLA, an employer may seek a second opinion when it has "reason to doubt" the validity of the medical certification. The amended CFRA rules state that an employer must have a "good faith, objective reason" to doubt the validity of the medical certification in order to seek a second opinion, and a second opinion only may be requested in leaves necessitated by the employee's own serious health condition.
4. FMLA rules generally permit an employee to choose to substitute accrued paid leave during an otherwise unpaid FMLA leave or for an employer to require substitution of accrued paid leave. Under the CFRA, however, there is a distinction between when an employer may require application of accrued paid time off. The employee may elect or the employer may require the use of accrued sick leave during an unpaid portion of a CFRA leave for the employee's own serious health condition, and the employer and employee can agree to substitute sick leave during other CFRA leaves. An employee may elect or the employer can require the employee to use vacation or PTO for any unpaid CFRA leave.
How Can We Help?
Clear and shared expecations, which are consistently applied, remain an employer's best defense against employment claims. We would love to help you set these expectations.

1. Review the policies implicated by these legal changes. Do your current sick leave (or PTO) policies and policies on leaves of absence reflect the new laws? We are happy to help you take a look to ensure you are in compliance and avoiding liability.

2. Have you reviewed your handbook lately? Your handbook can be a powerful tool for increasing productivity and decreasing distraction and risk. We are happy to review your employee handbook, or help you create a new one, to make sure you have captured the changes to the law described above and that you are creating clear and shared expectations.

3. Management Training to Reduce Risk and Increase Productivity. You know that we believe managers are your front line defense against claims by unhappy employees. Make this the year your managers are educated with the tools they need to have conversations about performance.
Please let us know if we can help! Reach us at 619 906 2400 or by e-mail.