Paid Sick Leave in California for Small Businesses: 6 Common Questions Answered

LAST UPDATED: June 29, 2022

Sometimes, life gets in the way before you can prepare for it. Ever since businesses first began blossoming across the United States decades ago, sick days have been a staple amongst workforces throughout the country. Like most employers’ requirements, the topic of paid sick leave can be complicated — even for small businesses.

Whether you’re about to establish your first venture or already ahead of the game, this article will help guide you through the process behind paid sick leave in California. Let’s go over some common questions you might have.

What is Sick Leave?

In its most basic sense, sick leave is a benefit available to employees when they need to take time off work, specifically for health issues. As such, it shouldn’t be confused with vacation time or paid time off. Some laws also enable employees to utilize their sick days to care for children or family members.

California established the Healthy Workplace, Healthy Family Act of 2014 to set some ground rules for businesses across the region, becoming the first state to require employers to offer paid sick leave to their workforce. Under the act, employees — including temporary and part-time workers — earn at least one hour of paid leave per 30 hours spent working.

Who is Eligible to Earn Sick Hours?

California sets some guidelines for small businesses to follow when it comes to employee eligibility. If the following points apply to your workers, you must provide them with the opportunity to take sick days.

  • The employee has worked in California for 30 or more days (within a year) since the start of their employment.
  • They are a full-time, part-time or temporary employee.

In comparison, employees who aren’t considered under California’s laws for regular employees could face some eligibility restrictions. These workers include:

  • Providers of in-home supportive services.
  • Some air carrier employees.
  • Workers with collective bargaining agreements.

What About the Family and Medical Leave Act (FMLA Leave)?

Passed in 1993, the Family and Medical Leave Act is a federal law crafted to aid employees in balancing family demands with work responsibilities. As such, small businesses that offer sick days should know about its implications.

First and foremost, not every employer must provide FMLA leave. If your small business has under 50 employees, you are not mandated to follow this law. Should you have more than that, however, you’ll need to offer leave.

Next, it’s important to note that FMLA leave is not the same as conventional paid sick leave. Essentially, it is a benefit that all employees can use in cases when they need to leave work in order to help a family member who has health difficulties.

Here is a quick overview of FMLA leave:

  • It allows employees to take 12 weeks of leave during a year.
  • FMLA leave itself is unpaid, though employees can still use their accrued paid leave (PTO, sick leave, vacation time) in certain circumstances.
  • The FMLA protects only employees who’ve worked under their employer for a year (1,250 hours).
  • FMLA leave can only be taken under specific situations, including a family member with a severe condition, certain military deployments and the birth of a child.

Which Methods of Sick Leave Accrual Methods I Can Offer?

Your small business has options for providing paid sick leave, with each method depending on your personal goals and overall planning preferences. Let’s go over the two main choices below.

The Accrual Method

Under this method, your employees will accrue sick leave under a fixed rate: one hour for every 30 hours worked. Like vacation time, these hours can be carried over year by year, though employers are allowed to set a limit of 48 hours. Most policies require employees to be able to use their accrued sick days starting no later than after their 90th day of employment.

The Lump-sum Method

Under the lump-sum method, you can provide your employees with their paid sick leave at the start of the year, enabling them to use hours immediately. Employees will need to have at least three days’ worth of sick hours available per year.

When Are Employees Allowed to Use Sick Hours?

There are a few guidelines your employees need to follow in order to utilize their sick days properly. California sets these requirements:

  • The employee is using sick days to care for their own or a family member’s diagnosis, treatment or care for an existing health condition.
  • The employee is seeking specified care for domestic violence, sexual assault or stalking.
  • If under the accrual method, the employee has to have worked at least 90 days before using their sick hours.
  • The employee can request to use their paid sick leave verbally or in writing.

Note: You cannot require your employees to find a replacement in order to use their sick hours.

How Does PTO Work Compare to Sick Leave?

Paid time off policies are collections of other leave types, most often including personal, vacation and sick leave into a single bundle that employees can pull from depending on their needs. California law only addresses the rate of pay given to employees who take paid sick leave, and therefore doesn’t impact paid time off.

Advantages of adopting a PTO policy in place of a standalone paid sick leave policy include:

  • Easing the administrative burden your business must oversee.
  • Granting workers more flexibility to use leave according to their needs.

In contrast, a potential downside includes possibly facing additional costs related to unused sick time if bundled together into a PTO package. Learn more about creating a PTO policy.

Get the help you need

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