11.2 California Paid Sick Leave (Healthy Workplaces, Healthy Families Act / SB 616)

11.2 California Paid Sick Leave (Healthy Workplaces, Healthy Families Act / SB 616)

Executive Summary: In 2014, California enacted the Healthy Workplaces, Healthy Families Act (Labor Code §§ 245–249), establishing a statewide mandate that employers provide paid sick leave (PSL) to almost all workers performing labor in the state. Effective January 1, 2024, Senate Bill 616 (SB 616) dramatically expanded the law, increasing the mandatory annual usage entitlement from 24 hours (3 days) to forty (40) hours or five (5) days, whichever is greater, and raising the rolling accrual ceiling to eighty (80) hours or ten (10) days. California PSL applies to all employers regardless of headcount, protects full-time, part-time, seasonal, and temporary employees, and strictly forbids employers from requiring employees to locate replacement workers or retaliating against them for using statutory time. Crucially, the law requires precise rate-of-pay calculations for non-exempt workers and mandates that available sick balances appear on every wage statement.

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Coverage, Eligibility & Waiting Periods

California's paid sick leave statute is structured with universal breadth across the private and public employment sectors.

┌─────────────────────────────────────────────────────────────────────────────┐
│                      CALIFORNIA PAID SICK LEAVE OVERVIEW                     │
├─────────────────────────────────────────────────────────────────────────────┤
│ • Governing Statute: California Labor Code §§ 245 through 249               │
│ • Major Amendment: Senate Bill 616 (Effective January 1, 2024)              │
│ • Enforcement: DLSE / California Labor Commissioner                         │
│ • Employer Threshold: ONE (1) or more employees (Universal private sector)   │
│ • Employee Eligibility: Any employee working in CA for >= 30 days in a year │
│ • Accrual Commencement: Day 1 of employment                                 │
│ • Usage Waiting Period: 90th calendar day of employment                     │
│ • Minimum Annual Usage Cap: 40 Hours or 5 Days (Whichever is Greater)       │
│ • Minimum Accrual Bank Cap: 80 Hours or 10 Days                             │
└─────────────────────────────────────────────────────────────────────────────┘

1. Covered Employers & Employees (Labor Code § 246(a))

• Employer Scope: Any person, partnership, association, corporation, or entity employing at least one individual. There is no small-employer exemption.
• Employee Scope: Applies to full-time, part-time, temporary, per diem, seasonal, non-exempt, and exempt personnel. It even covers out-of-state employees who travel into California to perform work for thirty (30) or more days within a 12-month period.
• Limited Statutory Exemptions: The statute excludes only employees covered by specific collective bargaining agreements (CBAs) that provide equivalent sick leave and binding arbitration, construction employees covered by qualifying CBAs, certain commercial flight deck or cabin crew members, and public sector retirees receiving state pensions.

2. Timeline Rules: Accrual vs. Usage

• Accrual Begins: On the first day of employment (Day 1).
• Usage Window: An employee is legally entitled to begin using accrued paid sick leave on the 90th calendar day of employment (Labor Code § 246(c)). Employers may voluntarily permit earlier usage, but cannot restrict usage beyond the 90th day.

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Statutory Accrual, Upfront, and Alternative Allocation Models

California permits employers to choose among three primary administrative frameworks for delivering statutory paid sick leave, provided the selected method satisfies the post-SB 616 thresholds.

1. Standard Statutory Accrual Method (1 hour per 30 hours worked)

Under Labor Code § 246(b)(1), an employee earns at least one (1) hour of paid sick leave for every thirty (30) hours worked.

• Annual Usage Cap: Under SB 616, an employer using the accrual method may cap an employee's annual usage at 40 hours or five (5) days, whichever is greater, per benefit year.
• Maximum Accrual Bank (Cap): Under SB 616, an employer may cap an employee's total rolling accrued sick leave bank at 80 hours or ten (10) days, whichever is greater. Once an employee's bank hits 80 hours/10 days, accrual temporarily halts until time is used.
• Mandatory Carryover: Under the accrual system, accrued, unused sick leave must carry over from year to year, subject only to the 80-hour/10-day rolling ceiling.

2. Upfront (Lump Sum / Frontload) Method

Under Labor Code § 246(d), an employer may bypass tracking hourly accruals and carryovers by frontloading the full statutory allotment at the beginning of each 12-month benefit year (e.g., calendar year, fiscal year, or employee anniversary year):

• Mandatory Amount: The employer must grant at least 40 hours or five (5) days, whichever is greater, upfront.
• Elimination of Carryover: When the full statutory allocation is delivered upfront at the beginning of the benefit year, no carryover of unused sick leave is required. Unused balances may expire at the conclusion of the benefit year, provided a fresh allotment of 40 hours/5 days is granted on day one of the new benefit year.
• New Hire Upfront Proration: For newly hired employees under an upfront plan, the employer must ensure the employee has at least 24 hours of sick leave available by their 120th calendar day of employment, and the full 40 hours (or 5 days) available by their 200th calendar day.

3. Alternative Accrual Method (Labor Code § 246(b)(3))

An employer may use an alternative accrual schedule (such as accruing a set amount per pay period, semi-monthly, or monthly), provided the accrual meets two strict statutory safe-harbor benchmarks:

1. The employee must accrue at least 24 hours (or 3 days) of paid sick leave by the 120th calendar day of employment (or each calendar year); AND
2. The employee must accrue at least 40 hours (or 5 days) of paid sick leave by the 200th calendar day of employment (or each calendar year).

┌─────────────────────────────────────────────────────────────────────────────┐
│                     CALIFORNIA PAID SICK LEAVE MODELS (SB 616)              │
├──────────────────────┬─────────────────────────────┬────────────────────────┤
│ FEATURE              │ ACCRUAL METHOD              │ UPFRONT (LUMP SUM)     │
├──────────────────────┼─────────────────────────────┼────────────────────────┤
│ Accrual Rate         │ 1 hour per 30 hours worked  │ Zero tracking; lump-sum│
├──────────────────────┼─────────────────────────────┼────────────────────────┤
│ Annual Usage Cap     │ 40 hours or 5 days*         │ 40 hours or 5 days*    │
├──────────────────────┼─────────────────────────────┼────────────────────────┤
│ Rolling Bank Cap     │ 80 hours or 10 days         │ N/A (Bank does not accumulate)│
├──────────────────────┼─────────────────────────────┼────────────────────────┤
│ Year-End Carryover   │ MANDATORY (up to 80h bank)  │ NONE REQUIRED          │
├──────────────────────┼─────────────────────────────┼────────────────────────┤
│ New Hires            │ Accrues from Day 1; use @ 90d│ 40h upfront; use @ 90d │
└──────────────────────┴─────────────────────────────┴────────────────────────┘
* Whichever is greater based on the employee's regular daily schedule.

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The Critical "Hours vs. Days" Rule (Whichever Is Greater)

A foundational rule of SB 616 that frequently appears on the PHRca exam is the phrase "forty (40) hours or five (5) days, whichever is greater".

1. Alternative Work Schedules (e.g., 4/10 or 12-Hour Shifts)

If an employee regularly works 10-hour shifts (four days per week), providing exactly 40 hours of sick leave provides only four (4) days of leave. Because the statute mandates five days or 40 hours, whichever is greater, capping this worker at 40 hours violates California law! The employee is entitled to 50 hours of paid sick leave (5 days × 10 hours per day).

2. Part-Time Workers

Conversely, consider a part-time retail employee who works 4 hours per day, 5 days per week. Under an upfront 5-day rule, 5 days would yield only 20 hours. However, because the statute guarantees 40 hours or five days, whichever is greater, the employee is entitled to up to 40 hours of sick leave if accrued or granted upfront, which allows them to take up to 10 half-day shifts off.

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Permissible Uses & The "Designated Person" Expansion

California Labor Code § 246.5(a) authorizes paid sick leave for two expansive categories of need:

1. Health Care and Preventive Treatment

• Purposes: Diagnosis, care, or treatment of an existing health condition of, or preventive care (such as annual physicals, dental cleanings, vision exams, or vaccinations) for, an employee or an employee's family member.
• Covered Family Members (Labor Code § 245.5(c)):
  • Child: Biological, adopted, foster child, stepchild, legal ward, or child of a person standing in loco parentis, regardless of age or dependency status.
  • Parent: Biological, adoptive, foster parent, stepparent, legal guardian, or person who stood in loco parentis when the employee was a minor.
  • Spouse & Registered Domestic Partner: Legally recognized spouses and state-registered domestic partners.
  • Grandparent & Grandchild: Grandparents and grandchildren of the employee.
  • Sibling: Brother or sister (including half-siblings and stepsiblings).
  • Designated Person (AB 1041): Effective January 1, 2023, an employee may designate any individual related by blood or whose association with the employee is the equivalent of a family relationship. The employee identifies the designated person at the time leave is requested. An employer may limit an employee to one designated person per 12-month period.

2. Court and Judicial Proceeding Uses (Assembly Bill 406)

AB 406 expanded the permissible uses of accrued paid sick leave beyond health care:

• Effective October 1, 2025: an employee may use accrued paid sick leave — not merely unpaid job-protected time — when appearing in court as a witness under subpoena or serving on jury duty. Before AB 406, these absences were protected but unpaid unless the employer voluntarily allowed sick leave substitution.
• Effective January 1, 2026: the entitlement extends to an employee, or an employee's family member, who is a victim of a qualifying crime and is attending judicial proceedings related to that crime.
• Unscheduled absence protection: an employer may not penalize an employee for an unscheduled absence covered by these provisions where the employee provides certification within a reasonable period after the absence. Advance notice cannot be made a precondition when the proceeding was not foreseeable.

3. Safe Leave for Crime Victims (Labor Code §§ 230 & 230.1)

Paid sick leave may be utilized by an employee who is a victim of domestic violence, sexual assault, or stalking for:

• Obtaining or attempting to obtain relief (such as a temporary restraining order or protective order) to protect the safety of the employee or their children.
• Seeking medical attention for injuries.
• Obtaining psychological counseling or services from a domestic violence shelter or rape crisis center.
• Participating in safety planning or temporarily/permanently relocating.

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Calculating the Sick Pay Rate (Labor Code § 246(l))

Employers cannot simply compensate all non-exempt employees at their base hourly rate. Under Labor Code § 246(l), sick pay must be calculated with precision:

1. Non-Exempt Employees

Employers must calculate sick pay for non-exempt workers using one of two permissible statutory formulas:

• Method A: The Regular Rate of Pay: Calculated for the workweek in which the sick leave is taken, using the same formula used to calculate overtime (dividing total non-overtime compensation, including non-discretionary bonuses, commissions, and shift differentials, by total regular hours worked).
• Method B: The 90-Day Lookback Method: Dividing total non-overtime wages earned during the 90 calendar days (or full pay periods) prior to the leave by the total hours worked in that period. Overtime premium pay is excluded from the numerator, but straight-time earnings for overtime hours are included.

[!CAUTION] The Base Rate Trap: If an employee earns a base rate of $20.00/hour plus a $5.00/hour graveyard shift differential or substantial sales commissions, paying them $20.00/hour for sick leave violates Labor Code § 246(l). The employee must be paid at their regular rate reflecting the differential or commission earnings.

2. Exempt Employees

Paid sick leave for exempt employees is calculated in the same manner as the employer calculates wages for other forms of paid leave (e.g., dividing annual salary by 52 weeks, then by 5 days or 40 hours).

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Statutory Protections, Wage Statement Itemization & Rehire Rules

1. Prohibition on Replacement Workers (Labor Code § 246.5(b))

An employer cannot require an employee to search for, locate, or secure a replacement worker as a condition of using paid sick leave. A company policy stating 'If you call in sick, you are responsible for finding coverage for your shift' is illegal under California law.

2. Rebuttable Presumption of Retaliation (Labor Code § 246.5(c))

California creates a powerful statutory protection against retaliation. If an employer discharges, threatens to discharge, demotes, suspends, or disciplines an employee within thirty (30) days of the employee:

• Filing a complaint with the Labor Commissioner regarding sick leave;
• Cooperating in an investigation; or
• Opposing an unlawful sick leave policy or exercising their right to use paid sick leave, the law establishes a rebuttable presumption of unlawful retaliation in any administrative or civil proceeding.

3. Paystub Balance Itemization (Labor Code § 246(i))

An employer must display the employee's available paid sick leave balance (or paid time off provided in lieu of sick leave) either on the employee's itemized wage statement (paystub) under Labor Code § 226 or on a separate written document provided on each designated payday. If an employer provides unlimited paid sick leave or unlimited PTO, the paystub must explicitly state "Unlimited".

4. Separation & Rehire Rules (Labor Code § 246(g))

• No Separation Cash-Out: Unlike accrued vacation/PTO (which must be cashed out under Labor Code § 227.3 and Suastez), standalone paid sick leave is not deferred wages and does not need to be cashed out upon termination.
• The One-Year Rehire Reinstatement Mandate: If an employee separates from employment and is rehired within one (1) year (12 months) by the same employer, all previously accrued, unused paid sick leave must be reinstated immediately upon rehire. The employee is entitled to use the reinstated sick leave immediately upon rehire if they had already satisfied the 90-day waiting period during their previous tenure.

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Local Paid Sick Leave Ordinances

While SB 616 standardized procedural rules statewide, it did not preempt local municipal ordinances that provide more generous paid sick leave amounts:

• Cities such as San Francisco, Los Angeles, West Hollywood, Berkeley, Oakland, San Diego, and Santa Monica maintain local ordinances.
• For example, West Hollywood mandates up to 96 hours of paid leave for full-time employees, while San Francisco requires accrual up to 72 hours for employers with 10+ employees with no annual usage cap.
• Compliance Standard: Employers must always comply with the standard that is most generous to the employee (the higher local accrual/usage caps coupled with the strict state procedural protections).