Paid Sick Leave, or PSL, requires employers to provide 24 hours or three days of paid time off for purposes related to health. No matter how well-intended the law is, the PSL law is difficult to understand and administer. Even the phrase “24 hours or three days” is confusing and misleading!
The PSL law states that “an employer is not required to provide additional paid sick days pursuant to this section if the employer has a paid leave policy or paid time off policy” and leave is available for the same purposes under the same conditions as PSL. Based on this we have felt confident in telling clients that a PTO policy suffices for PSL law compliance.
Unfortunately, the Division of Labor Standards Enforcement, DLSE, has muddied the water. As a result, we think the best practice is for employers to separate their PTO policy from their PSL policy.
The DLSE has added a webinar to its website. You can find it here: http://www.dir.ca.gov/dlse/ab1522.html. The webinar is basic and rather boring. However, you will find one particular comment made by the DLSE in the Q & A section of the webinar very interesting and perplexing. Here is the dialogue:
QUESTION: How does this new law affect employers who combine their vacation time and sick time into a Paid Time Off or PTO account?
ANSWER: There is no PTO requirement under California law. But now that there is a sick leave requirement, an employer with a PTO policy will not have to provide additional sick leave so long as the employer provides at least 24 hours per year for paid leave that can be used for health care and meets the other accrual and use requirements in the law. To the extent that Sick Leave is included in a PTO policy, accrual and use of leave has to be separately tracked in order to maintain compliance, and for DLSE or a court to determine an employer’s compliance with the new Paid Sick Leave law. This law establishes minimum requirements for sick leave. The flexibility that the law provides does not obligate the employer to provide more days, and it is up to the employee to choose how to use them. If a worker has only three days of accrued leave and can use them as sick leave, but chooses to use it as vacation, then that is their choice. Also, if the employer is providing sick leave through a PTO, the consequence is that unused accrued leave is subject to cash out on termination, even though the Paid Sick Leave law does not require cash out upon termination. The choice of providing sick leave in a PTO policy or providing it independently of the PTO is for the employer. The employer [may] have a separate policy that puts the full amount of sick leave into the bank at the beginning of the 12-month period and have another PTO policy for leave other than sick leave because there is no requirement to have PTO under the Paid Sick Leave law.
So what does this mean? If you combine PSL in your PTO policy you will be required to track when an employee takes time off for a PSL purpose. Doesn’t that defeat the purpose of a PTO policy? And if the employee uses all of his/her PTO for a non-PSL purpose, you will be required to provide the employee with an additional “24 hours or three days” of PSL.
We have only a few days to fine tune policies to comply with the PSL law. If you need assistance, please contact us!