On October 4, 2023, Governor Gavin Newsom signed Senate Bill (SB) 616 into law. SB 616 will take effect on January 1, 2024, and it expands California’s mandatory Paid Sick Leave (PSL) from three days/24 hours to five days/40 hours.

While many cities in California have already passed local PSL mandates, California has now created more hurdles for employers and the new SB 616 law will apply to all employees who work in CA for 30 days or more in a year.

What This Means for Employers:

PSL Entitlement – SB 616 increases an employee’s entitlement to PSL from three days/24 hours to five days/40 hours.
Accrual or Frontload – For employers who utilize an accrual model, increasing the number of PSL hours owed to 40 hours by the employee’s 200th day of employment, in addition to accruing at least 24 hours of PSL by their 120th day of employment. Employers may continue to frontload the entire PSL amount.
Increased Carryover Cap – SB 616 increases the number of days allowed for carryover from three days/24 hours to five days/40 hours.
Increased Accrual Cap – Under SB 616, employees accrual cap of PSL increases from six days/48 hours to ten days/ 80 hours.
Employment Eligibility – SB 616 increases the number of days of PSL an employee is eligible to receive from three days/24 hours within nine months of employment to five days/40 hours within six months.
Collective Bargaining Agreements – SB 616 extends certain procedural and anti-retaliation provisions of existing law to employees who are covered by a valid collective bargaining agreement that provides for different paid sick leave obligations.
Local City Ordinances – SB 616 preempts any local cities’ PSL ordinances with less generous leave requirements to establish the state-wide minimums of five days/40 hours.

How Employers Can Prepare for SB 616:

Don’t wait to make changes to your CA PSL procedures! Employers need to ensure compliance with SB 616 by January 1, 2024, and should take several proactive steps before then, which may include the following:

Review local PSL ordinances to determine whether they still apply to your company, or if they are preempted by the new law or if they will remain unaffected.
Update company sick leave policies and employee handbooks to ensure compliance since noncompliant handbook language about PSL may be used by employees to establish violations.
Train managers/supervisors about the PSL increases to ensure they understand what employees are now entitled to use, carryover and accruals that impact their workforce.
Review SB 616 with your company’s payroll processor to ensure the accrual and frontloading allowances are correct, carryover and caps are correct and that wage statements accurately reflect the employee’s PSL entitlement.

Staying informed and proactive about HR matters and the new PSL law is critical for California small businesses. To ensure your compliance with the latest developments in employment law, schedule an HR Audit with Essential HR, Inc. Our team of experts will assess your HR policies, procedures, and practices while providing valuable insights to safeguard your business. Don't wait; reach out to us today and take the first step toward a resilient and compliant workplace!