Paid Sick Leave in California: Coming Soon Out of a Pocket Near You

It’s not my place to judge, but I’m going to anyway. If you own a practice in California, you may have heard that a not-so-great piece of new legislation has just passed in your state and is likely to be signed into law by Governor Brown. Starting July 1, 2015, California employers will be required to offer paid sick leave. There are a few exemptions, but alas, the medical industry is not one of them.

I’ll talk about the new requirements and what I think of them in just a minute, but first…

You already know about CA’s other exciting employer requirements, right? Here’s a sample:

• If your employees work over 8 hours in a day, you have to pay overtime.
• You must provide 2 breaks and one 30 minute meal period for shifts of more than 6 hours and up to 10 hours, and if a rest or meal period is missed, you owe 1 hour of premium pay. If 1 or both rest periods and a meal period are missed, you owe 2 hours of premium pay. (And until recently, employers were not only required to provide breaks, you were also subject to fines if you DID provide the time, but the employee decided not to take it.)
• You must give each employee a hiring letter at the time of hire, and any time you change their rate of pay. This must conform to California law, and there are statutory penalties for getting this wrong.
• Upon firing, there is a litany of required paperwork, including state pamphlets, which must be given out by the employer to the employee. This is true even if they quit and/or no-show.
• If you have a commission or bonus system, that system must be communicated to each employee in writing.
• Non-competes and non-solicitation agreements are not valid and can be deemed illegal.

Add this new requirement to the above list: Even if you already offer PTO or paid sick time, California state legislatures have decided they know best how it should be administered and paid for by your company. This means that your current system might not be in compliance with the new state regulations. And if you don’t yet offer paid sick time at all, you need to get in line and prepare to do so before July 1st, 2015.

Here are the details of the new law

The new law is part of California’s Healthy Workplaces, Healthy Families Act of 2014. It requires that all employers provide up to 3 days of paid sick leave per year. Employees may apply the paid sick leave for their own care, diagnosis, or treatment, or even for that of a family member.

CA employees become eligible for paid sick leave after working within the state for 30 or more days. New employees begin to earn and accrue the time after 90 days of employment.

The law addresses: accrual, carry-over, retaliation, rate of pay, employers with existing leave policies, posting and notification, tracking the time, and, you guessed it, penalties for failing to get it all correct.

Here’s where I get judgmental

Up to this point, with very few exceptions (San Francisco, Seattle, NYC, somewhere in New Jersey…) neither federal nor state governments required that employers provide paid sick time. The thinking has always been, let’s leave this between the employer and the employee.

I personally believe that in MY businesses, providing leave that can be used for sick time is a good idea. That’s an easy decision for me to make because it’s my business, and, together with my co-founder, it’s what we’ve decided to do. We think it’s important. But we draw our decision-making line there, at the door of our own business.

Translated, we don’t get a say in what you offer your employees when it comes to issues such as benefits and time off. And in my mind, neither should any state government official have a say… unless, of course, they are willing to pay for that time out of their own personal pockets.

This rule is one more way in which California employers will have to spend time, money, and resources offering AND tracking a benefit, without any choice in the matter. Plus, once more, employers who are already offering this benefit will now be subject to penalties if they offer it in the wrong way.

Will that, in and of itself, break businesses in California? Probably not. But if you recall, it wasn’t the load that crushed the camel, it was that final straw.

Questions, Californians? Doctors, practice owners, and their office managers are welcome to call CEDR at 866-414-6056, or email info@cedrsolutions.com.