40 | 2024 Cal-Peculiarities ©2024 Seyfarth Shaw LLP www.seyfarth.com provided PSL or paid time off to a class of employees before 2015, pursuant to a PSL policy or a PTO policy that used an accrual method different than providing one hour per 30 hours worked, so long as the accrual was on a regular basis so that an employee has no less than one day or eight hours of PSL or paid time off within three months of employment of each calendar year, or each 12-month period, and the employee was eligible to earn at least five days or 40 hours of PSL or paid time off within six months of employment.122 Employers can limit use of PSL to 40 hours or five days (whichever is greater) during each year of employment.123 Employers may set a reasonable minimum increment, not to exceed two hours, for an employee’s use of PSL.124 Permitted uses of PSL. Employees become eligible to use PSL on their 90th day of employment, after which they are eligible to use PSL as it accrues.125 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”.126 (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.127 Calculating pay rates for sick time. 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,”128 employers must choose between two different 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.”129 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.”130 In other words, the pay rate may be calculated by using the “regular rate” of pay as though calculating overtime, inclusive of incentives, shift differentials, etc.131 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.132 Payout of unused PSL. Employers need not pay out available, 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.133 However, if an employer uses PTO to comply with the PSL law, then any accrued, unused PTO must be paid out upon termination of employment and need not be restored upon re-hire.134 Posting. The PSL law includes a posting requirement (see § 9.1).135 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).136 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.137 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).138
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