In the last post (affordablebookkeepingandpayroll.com) I discussed who is subject to the new sick pay policy and the methods of calculating the hours. Today’s post will discuss some of the compliance issues you’ll need to know.
If you are going to grant sick pay hours, you may use a calendar year or anniversary date. For instance, if using the anniversary date, each employee will be granted their hours at different times of the year based on their first day of employment. If you prefer to make it easier, you may grant all employees their hours on January 1st. If using a calendar year, you may pro-rate the sick hours earned for an employee starting later in the year and grant these on their first day of work (first year of employment only).
If an employee leaves before their sick hours are used, you are not required to cash them out. If an employee returns less than 12 months from the date they left the employment, unused hours must be reinstated. If using the accrual method and an employee is sick but hasn’t earned enough hours to cover their lost hours, you may “lend” hours to them in advance. However, if they leave your employment prior to earning them back, you may not deduct the difference from their paycheck.
Sick hours must be tracked on a wage statement (paycheck) or other “written notice” every pay day.
If an employee is requesting time off, you may not require they take more than 2 hours off. For instance, if an employee says they have a doctor’s appointment at 9am, you can’t tell them not to come in until 1pm to work a half day and take the other 4 hours as sick pay.
If an employee has an hourly wage, the sick pay is at the regular hourly rate, but it does not include bonuses or other forms of pay. If multiple rates were used in the last 90 days, or the employee is not paid an hourly rate, take the total amount earned (not including overtime premium pay (the extra half time amount)) and divide by the total time worked in that period. This gives the applicable hourly rate. However, you may choose to pay at the higher rate to avoid calculating this amount if desired.
If the sick leave is foreseeable, you may require notice. Once taken, sick pay must be paid no later than the next pay period. Generally it should be paid in the same pay period, but some payroll cycles have a cut-off prior to the end of the payroll period, so payment in the following pay period is acceptable.
A sick leave request may be verbal or written. If your current policy requires a written request, it must be revised. The time off applies due to an employee or their family member’s health issue. If an employee is taking sick leave, you may not require them to find a replacement worker.
If you don’t currently have an updated employment poster, you must get new ones that include this new information. Payroll records need to be maintained for 4 years after employment ends, and the Labor Commissioner will enforce all policies in this legislation.
Remedies for failing to follow all aspects of the new sick leave policy include:
- reinstatement of employment
- back pay and $50 per day that a violation occurred
- unpaid sick leave x 3 or $250 (whichever is greater – maximum of $4000)
- potential $50 per day for violations occurring post hearing
- attorney’s fees, costs and interest
An employee may confidentially report violations to the Labor Commissioner and ignorance of the law is not accepted as an excuse. You must give the revised “Notice to Employee” upon hiring which can be found here: Publications.
Be prepared to have your policies in place and give hours to your payroll processing company in order to properly report available sick pay. Make sure your handbook is revised as necessary to comply with all portions of this law.
