Hunton Retail Law Resource

Introduced by the architect of California’s existing paid sick leave law, AB 555 would expand paid sick leave to require employers to provide 40 hours, or 5 days, of sick leave by the employee’s 200th calendar day of employment. Additionally, employers are only able to cap the amount of paid sick leave a worker earns to 80 hours, or 10 days. Finally, the employer is required to allow an employee to carry over up to 5 days of sick leave into the following year of employment. This proposed amendment would necessarily have a negative impact on California retailers, both large and small. The bill and its amendments can be found here.

California’s existing sick leave law, the Healthy Workplace Healthy Family Act of 2014 (AB 1522), was signed by the governor and went into effect on July 1, 2015. The act requires all employers (regardless of size), except those with collective bargaining agreements, to provide any employee who has worked in California for 30 or more days with paid sick leave at an accrual rate of one hour for every 30 hours worked. After the 90th day of employment, employees are allowed to utilize their paid sick leave to care for themselves or a family member. Pursuant to the act, any unused sick leave accrued in the preceding year is carried over to the next year up to a cap. All employees are entitled to paid sick leave including temporary, seasonal and part-time employees.

The California Chamber of Commerce and numerous California organizations oppose the proposed expansion of California’s sick leave policy for a myriad of reasons, including the financial burden it will place on employers and the superfluous nature of the amendment when considered alongside the existing leave options offered to California employees. Currently, it is estimated that unscheduled absenteeism costs roughly $3,600 per year for each hourly employee in the state. (See “The Causes and Costs of Absenteeism in The Workplace,” a publication of workforce solution company Circadian.) Because the existing law applies to all California employers regardless of size, it necessarily follows that small businesses will be hit the hardest by any change that would increase the number of sick days an employee may take. Moreover, California already offers employees a variety of options for paid leave, whether it be under the California Family Rights Act (CFRA), pregnancy disability leave; domestic violence, sexual assault and stalking leave; harassment leave; bone marrow/organ donor leave; or the Paid Family Leave program. Each of these options is offered in addition to leave protected under the Family and Medical Leave Act (FMLA). As such, it would appear that additional leave offered by this amendment is both costly and unnecessary.

The enforcement of the proposed extension to sick leave also begs the question of whether the new law will preempt local ordinances which have independently expanded upon the existing law. Cities like Los Angeles, San Francisco, Berkeley and Oakland have enforced requirements of varying degrees which affect an employee’s use of accrued sick leave. As drafted, it is unclear how this amendment will affect—or completely preempt—local sick leave ordinances.

As drafted, this amendment is opposed by approximately 30 California organizations, including the California Retailers Association.

We will continue to monitor and provide updates on this amendment, and other legislative developments, throughout the legislative session.