California Paid Sick Leave Expansion Signed Into Law

On October 2, 2023, Governor Gavin Newsom signed S.B. 616, which significantly expands the state’s existing Paid Sick Leave (PSL) mandate. The two key changes are:

  • Required number of paid sick leave days increased from 3 days to 5 days (or from 24 hours to 40 hours)
  • Maximum accrual cap raised from 6 days to 10 days (or from 48 hours to 80 hours).

Effective Date

The law will become effective on January 1, 2024.

PSL Accrual Methodology

The new law leaves in place existing options for paid sick leave accrual. Specifically, employers may adopt one of three methods for accruing PSL for their employees:

  • Accrual Method: Under this method, employees must earn at least one hour of paid sick leave for every 30 hours worked, up to a rolling cap of 48 hours. This approach allows employers to avoid employees taking sick leave after only minimal time working by requiring employees to “earn” leave time prior to taking it.
  • Frontload Method: Under this method, employers provide an upfront allocation of at least the minimum required paid sick leave. This approach allows employers to avoid accrual tracking and year-end carryover obligations.
  • Alternate Accrual Rate for New Hires: Under this method, employers may adopt a different accrual method if employees receive at least 24 hours of accrued paid sick leave by their 120th calendar day of employment and in each calendar year, AND at least 40 hours of paid sick leave by their 200th calendar day of employment. (The first part of this alternate method is the same as the current law. The “40 hours by the 200th day” is a new extension that was added by S.B. 616.)

Under the new law, regardless of the accrual method adopted, employers may limit the number of days an employee can USE per year to 5 days (or 40 hours) for 2024 and beyond.

Employer Action Item

The January 1, 2024, effective date is just around the corner, and many employers will want to start the implementation process immediately. Employers should look ahead and plan for:

  • Programming new requirements into PSL/PTO tracking systems
  • Updating PSL/PTO policy documents
  • Communicating changes to employees.

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