Employers Need to Prepare for Oakland’s New Paid Sick Leave Law

Effective March 2, 2015, Oakland businesses and any other employers who have employees working within the City’s boundaries will need to comply with Oakland’s new Paid Sick Leave law, which mandates up to 72 hours (9 days equivalent) of paid sick leave. The new Oakland law is more generous to employees than California’s new Healthy Workplaces, Healthy Families Act of 2014, which provides for 24 hours (or the equivalent of 3 days of paid sick leave).

Key Highlights:

• Starting March 2, 2015, employers must provide employees with at least 72 hours (9 days equivalent) of paid sick leave annually.
• Employees: Applies to employees who perform at least 2 hours of work in any particular week within the City boundaries; includes full-time, part-time and seasonal employees. The week is any consecutive 7-day period.
• Employers Outside of Oakland:  If your employee works in Oakland for 2 hours in a week, which includes truck drivers delivering to Oakland or customer service representatives making Oakland business visits, they will be covered under Oakland’s paid sick leave law if they have worked the hours needed to accrue the sick leave.
• Accrual of Sick Leave: Hours accrue at the rate of 1 hour for every 30 hours worked. For non-exempt employees, accrual time includes over-time hours worked. For exempt employees, generally, accrual will be based on a 40 hour work week.
• What Can Sick Leave Be Used For?  Sick leave can be used for personal illness, or to care for a child, parent, legal guardian or ward, sibling, grandparent or grandchild, spouse, domestic partner or any other designated person. If the employee has no spouse or domestic partner, the employee can designate one person in lieu of spouse/domestic partner (within a specific 10 day window each year). The designation can be only of one person, annually. (Under California’s Healthy Workplaces, Healthy Families Act of 2014, up to 3 days can also be used by a victim of domestic violence, sexual assault or stalking, and also can be used for preventative care.)
• When Can Employees Use Sick Leave?  Employees are not entitled to use sick leave until after 90 calendar days of employment; however, employers may allow use earlier.
• Minimum Amount of Sick Leave:  Sick leave can be taken in 1 hour increments.
• Cap of Sick Leave:  For small employers with less than 10 employees, which includes employees working outside of Oakland, sick leave accrual can be capped at 40 hours; for all other employers, sick leave accrual can be capped at 72 hours. Importantly, the cap is not on “use.”  An employee may be able to use more than 72 hours annually.
• Carry Over/No Annual Cash Out:  No “use it or lose it” allowed. Sick leave carries over year to year, subject to the annual cap on accrual. Unused sick leave cannot be cashed out at the end of the year and must be carried over.  However, employees under a collective bargaining agreement may agree to waive the carry over requirement and can agree to a cash out of unused sick leave.
• No Upfront Pay Out:  No paying out the full amount of leave at the beginning of the year.
• Termination: Unused sick leave does not need to be paid out upon termination, resignation or retirement.
• No Replacement Worker:  The employee cannot be required to find a replacement worker.
• Coordination with PTO Policy:  Employers with a paid time off (PTO) policy that satisfies the requirements of the new law are not required to provide additional paid sick leave. But, the rules limiting year-end cash out and payment upon termination must be applied to the sick leave if it is combined with other PTO or vacation time.
• Reasonable Advance Notice:  Employers may ask for reasonable advance notice of the need to use sick leave. The request can be verbal, but the employer can require reasonable advance notice of what the leave will be used for. For an unforeseen absence, 2 hours or less notice prior to the start of a work shift is considered reasonable. For scheduled absences, such as a doctor’s appointment, prior notice can be longer, as long as it is not unnecessarily burdensome. Notification rules established by a bona fide collective bargaining agreement will be considered reasonable. The employer will establish a reasonable procedure for notice, such as phoning, texting or emailing a supervisor.
• Reasonable Verification:  Only reasonable verification is allowed. A doctor’s note is unreasonable for an absence of less than 3 consecutive days. Any medical information provided by an employee as verification shall be treated as confidential.
• Pattern of Abuse:  If an employer reasonably believes that an employee has engaged in a pattern of abusing paid sick leave, the employer may request a doctor’s note or other verification upon the employee’s return from leave.
• Notice to Employees:  Employers must give written notice to each employee of his/her rights under this law.  The notice must be in the languages spoken by more than 10% of the employees. The City of Oakland has prepared posters in English, Spanish, Chinese and Vietnamese for employers to use.
• Record Retention:  Employers must retain records for at least 3 years for each employee of his/her name, hours worked, pay rate, paid sick leave accrual and usage, and service charges collected and distributed. Employers must provide a copy of the record upon employee’s request.
• Payroll Stub:  While Oakland’s law is silent on whether you need to track on an employee’s pay stub, California law requires the amount and use of paid sick leave to be visible on the pay stub commencing on July 1. Therefore, Oakland employers should track on employee pay stubs.
• City Access for Compliance:  The City may monitor compliance and employers must produce records for copying and review if requested by the City.  Employers must permit access to the work site and records to City representatives for the purpose of monitoring and investigating complaints. The City may consider noncompliance as a factor in its decisions on contracts, land use approvals and other entitlements.
• No Retaliation:  Employees may file a complaint with the City and within 120 days of being notified of the complaint.  It is unlawful for an employer to fire, retaliate or discriminate against an employee for making a complaint unless there is “clear and convincing evidence” of “just cause” to terminate the employee. Employer cannot reduce an employee’s pay, vacation or other benefits in response to a complaint.
• Legal Action or Private Right of Action:  An employee may file a complaint in a court of law and may seek injunctive relief, back pay, reinstatement or any other remedy at law, including civil penalties of up to $1,000 per violation. If the employee prevails, the employee may also recover attorneys’ fees and costs.  However, the employer cannot recover its attorneys’ fees and costs.

For general information:  City of Oakland website:  http://www2.oaklandnet.com