The California Healthy Workplaces, Healthy Families Act of 2014 (“Healthy Families Act”) is fully effective July 1, 2015, including the significant potential for class-action liability for non-compliance. It is critical that employers ensure that their sick leave policy is current, given the ever-developing legal guidance. We have created a helpful list of common areas of confusion with this new law.

(1) General Background on the Healthy Families Act

The Healthy Families Act provides sick leave for absences from work for: (1) the diagnosis, care, or treatment (including preventive treatment) of an existing health condition of the employee or the employee’s family member, and (2) the employee being the victim of domestic violence, sexual assault, or stalking. Family member is expansively defined to include children, parents, foster parents, legal guardians, siblings, grandparents, grandchildren, spouses, and domestic partners.

The law requires employers to include information regarding accrual and use of sick leave with their employees’ wage statements. Further, employers must preserve these sick leave records for three years. Moreover, relevant posters and individual notices should have been posted and delivered as of January 1, 2015. New hires must also receive pertinent individual notices explaining their rights under the Healthy Families Act.

(2) Employees Must Provide “Reasonable” Notice.

The Healthy Families Act limits employers to requiring only “reasonable advance notification” of employee use of sick leave. Where unforeseeable, an employer may only require notice when “practicable.”

Although not explicit in the statute, “reasonable” notice likely does not permit employers to probe into an employee’s reason for taking sick leave. Moreover, employers should refrain from seeking a doctor’s note for absences of only a couple days, unless there is reasonable suspicion that the employee is abusing the leave time.

(3) Combining Sick Leave with Paid Time Off (“PTO”)

The law explicitly allows for PTO policies to satisfy the requirements under the Healthy Families Act if an employee is given an adequate amount of leave that “may be used for the same purposes and under the same conditions as specified . . .” in the Healthy Families Act. Accordingly, merely keeping a PTO policy with a higher-than-required accrual (one hour for every 30 hours worked or 24 hours frontloaded each year) is insufficient to maintain compliance if it does not meet all of the Healthy Families Act’s other requirements.

Of particular concern, employers often condition taking PTO on their business needs and require prior approval/notice for employee PTO. Employers should develop a separate notice procedure for any PTO taken for the uses outlined in the Healthy Families Act to comply with the conditions discussed above.

It is also important to note that once employers combine sick leave with a PTO policy, California’s laws regarding vacation also apply to the sick leave. This includes additional requirements on accrual, caps, and carryover requirements.

Because of the numerous issues raised by joining PTO and sick leave policies, separating sick leave policy and other PTO policies is the most conservative practice. Moreover, separate policies are often more cost-effective by allowing lower accrual maximums and avoiding payout of unused sick leave upon an employee’s separation.

(4) Be Aware of Local Ordinances in San Francisco and Oakland

San Francisco and Oakland have sick leave ordinances that impose additional requirements on employers. Most importantly, these cities’ laws do not allow frontloading options for sick leave, in contrast to the Healthy Families Act. Frontloading refers to the option under the Healthy Families Act to give employees a full 24 hours of sick leave at the beginning of each year, rather than dealing with accrual and carryover of sick leave. Accordingly, in these cities, a constant accrual is absolutely required. Moreover, in addition to numerous other requirements, these cities allow employees without a spouse or domestic partner to designate one additional person each year to treat as a family member for the purposes of taking sick leave. An employer must give its employees an opportunity to change this designation every year.

(5) Likely Amendments and Additional Guidance

The legislature has suggested amendments to resolve some areas of confusion in the current Healthy Families Act. AB 304 is an amendment that has already been passed in the California Assembly, and is now moving on to the California Senate. As an urgency clause has been inserted, this amendment would be immediately effective upon the governor’s signature (which would likely occur sometime in late July of this year). This amendment would not only change specific ambiguous provisions, but it would also add further compliant accrual options. This amendment would, in fact, allow any method of regular accrual where the employee receives 24 hours of sick leave by the 120th day of the employee’s accrual period. Moreover, a delayed frontloading option would be added where an employer could satisfy the accrual requirements by providing a full 24 hours of sick leave on the 120th day of the employee’s accrual period. Furthermore, more lenient accrual standards would apply to certain already existing PTO policies (where sick leave is combined with PTO). Expect further administrative guidance on the specifics of these additional accrual options to be forthcoming if AB 304 becomes law.

Although policy updates are often burdensome, this small up-front burden is far better than being targeted in the next wave of class action litigation.