40 | 2023 Cal-Peculiarities ©2023 Seyfarth Shaw LLP www.seyfarth.com Employees may use PSL not only for their own illness, diagnosis, treatment, or preventive care, but also to care for an ill child (regardless of age or dependency status), parent (which is broadly defined and includes, among others, parents-in-law), spouse or registered domestic partner, grandparent, grandchild, sibling, and as of January 1, 2023, a “designated person”.124 (A “designated person” is someone is someone with whom the employee has the equivalent of a family relationship who is identified at the time the employee requests the PSL; employers may limit an employee to one “designated person” per 12-month period.) Additionally, employees who are victims of domestic violence, sexual assault, or stalking, or other abuses or crimes, as defined by California Labor Code section 230.1 may use PSL to seek aid, treatment, or related assistance.125 Calculating rates for sick pay. While an employer may calculate sick pay for exempt employees “in the same manner as the employer calculates wages for other forms of paid leave time,”126 employers must choose between two peculiar methods of calculating PSL for nonexempt employees. The first method entails “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.”127 The alternative method is to calculate sick pay using “the same manner as the regular rate of pay for the workweek in which the employee uses paid sick time, whether or not the employee actually works overtime in that workweek.”128 In other words, use the “regular rate” of pay as though calculating overtime, inclusive of incentives, shift differentials, etc.129 On October 11, 2016, a DLSE opinion letter declared that all commissioned employees, whether or not exempt from overtime requirements, must be paid using the 90-day method: dividing the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked during the full pay periods within the prior 90 days of employment.130 Payout of unused PSL. Employers need not pay out unused PSL upon employment separation. An employer must, however, restore to a rehired employee any unused PSL if the employee is rehired within one year of the separation.131 If PSL is considered PTO, then it must be paid out upon termination of employment and need not be restored upon re-hire.132 Posting. The PSL law includes a posting requirement (see § 9.1).133 Also, employers must include information about PSL rights in the Wage Theft Prevention Act Notice that employers must provide to nonexempt employees upon hire (see §§ 9.2.2, 16.1.2).134 In addition, the amount of PSL an employee has available must appear on either the employee’s itemized wage statement (see § 16.3) or in a separate document provided to the employee on the designated pay date.135 Record-keeping. The PSL law requires employers to keep records, for three years, documenting the hours worked and the PSL accrued, and to make those records available for inspection by the Labor Commissioner or the employee (see § 11).136 CBA exemption. The PSL law excludes from its definition of “employee” any employee who is “covered by a valid collective bargaining agreement if the agreement expressly provides for the wages, hours of work, and working conditions of employees, and expressly provides for sick days or a paid leave or paid time off policy that permits the use of sick days for those employees, final and binding arbitration of disputes concerning the application of its paid sick days provisions, premium wage rates for all overtime hours, and regular hourly rate of pay of not less than 30 percent more than the state minimum wage rate.”137 . (For an analogous CBA exemption, applying in the context of overtime premium pay, see § 7.7.) Co-existence with ordinances. The California PSL law does not preempt any local PSL ordinance.138 As to each provision or benefit, the employer must honor whichever obligation—state or local—is most generous to the employee. With the way thus clear, several California municipalities have seen fit to craft their own PSL ordinances, each creating employee entitlements and employer burdens beyond what California state law provides.
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