Sick Leave vs Paid Time Off in California
When creating or reviewing employment policies, it is important to recognize the differences between and obligations related to state-mandated sick leave and employer-offered paid time off.
Under California law, employers are required to provide an employee with one (1) hour of sick leave for every thirty (30) hours worked.[i] An employer can always offer more, but must at least meet the state’s minimum standard. The employer may limit use at twenty-four (24) hours or three (3) days per year, which means that it is possible an employee may accrue more sick time than they can actually use.
The minimum amount of accrued time is three (3) days or twenty-four (24) hours, whichever is greater. The days are calculated at an employee’s rate of pay/regular number of hours worked. For example, if an employee’s regular hours are five (5) hours a day, then three (3) days would be fifteen (15) hours. In this case, the employee would be allowed to take up to twenty-four (24) hours of sick leave time, rather than the fifteen (15) hours, since the law allows for whichever amount of time is greater. This also means that if this employee took three (3) days of sick leave, those days are calculated by their regular hours worked (five (5) hours a day), not by the literal ‘days.’
How it Works
Applies to California employees—full-time, seasonal and temporary.
Employees begin to accrue sick leave time from the first date of employment.
Employees must work for the same employer for at least thirty (30) days within a twelve (12) month period, but they cannot use sick leave time until they satisfy a ninety (90) day probationary employment period.
The thirty (30) days worked does not need to be consecutive. So, if temporary or seasonal employees are hired, the number of days each employee has worked within a twelve (12) month period should be monitored to correctly calculate their accrued sick leave and when they satisfy both the thirty (30) and ninety (90) calendar day requirements.
If an employee works for more than thirty (30) days, but less than ninety (90) days, they are not entitled to take paid sick leave.
If sick leave is under an accrual method, then sick leave can be carried forward, but an employer may put a limit on overall sick leave accrual of six (6) days and forty-eight (48) hours, whichever is greater.
Reasons Paid Sick Leave Can Be Used
Diagnosis, care, or treatment of an existing health condition of, or preventive care for, an employee or an employee’s family member.
For an employee who is a victim of domestic violence, sexual assault, or stalking,
It is important to note that certain cities and counties require employers to offer more sick leave time than the state minimum. If there is a conflict between the state’s minimum and a city/county’s requirement, whichever requires the greater amount of time to be given to an employee is the requirement that should be followed.
Paid Time Off
Vacation and/or personal time, also known as paid time off (PTO), is a benefit offered by employers to their employees, but it is not required by the state of California: employers have discretion over whether they’d like to offer their employees paid time away from the job. A lot of employers offer this as a perk, but there are some employers who do not or cannot.
While offering PTO is not mandatory, following a company’s policy and being consistent with it are. If an employer has a PTO policy, then the policy must be fairly and equitably applied to all covered employees; just because PTO is not mandated by the state does not mean it isn’t regulated by the state. An employee can still bring a claim if they are treated unfairly under a company policy.
Unlike sick leave, accrued PTO is considered earned wages under California law, which means that it must be paid out to an employee in their final paycheck upon termination. California does not allow employers to set up a ‘use it or lose’ it policy when it comes to accrued PTO. However, employers may implement a cap on how much PTO may be accrued, as long as that accrual policy is reasonable. The DLSE previously held that a cap of 1.75 times the annual rate should be the accrual rate, but has since changed this language to ‘reasonable.’ It is unclear exactly what ‘reasonable’ means, but 1.75 times the annual rate should still be acceptable.
As long as the policies are not discriminatory towards protected classes and equitably applied, an employer may set whatever parameters work best for them when it comes to employees scheduling paid time off. Employers can decide how and when employees can schedule time off, can limit the number of employees who can take PTO at one time, and can even block off certain dates or times of the year from anyone taking PTO.
Make sure sick leave policies meet the minimum standard put forth by California or city/county, if the city/county requires a higher minimum.
Create or review sick leave and PTO policies to ensure they are equitably applied to all employees and clearly lay out how employees accrue time, how they can check their accrued time, and if there are any limits to accrual and/or carrying forward any unused time to a new year.
If seasonal/temporary employees are hired, their hours and days worked within a twelve (12) month period should be tracked.
[i] Cal. Lab. Code § 246.