How Employees Are Finding Loopholes to Paid Sick Leave Law

Implemented two years ago, the Paid Sick Leave (PSL) law went into effect and employees benefited from new rights. Many employers thought they were compliant by simply knowing and abiding by the new law, however what many failed to understand is that without a defined written policy, mandatory sick leave can more than double and even roll over year to year.

Under California’s mandatory PSL law, employers can limit the amount of PSL to three days or 24 hours per year, ONLY if the PSL limitation is communicated in writing. If employees are not provided with a written communication, companies are subject to the statutory mandated accrual rate of one hour of sick pay for every 30 hours worked and being carried over each year. That means that a full time employee can gain over 69 hours of PSL or nine days per year and are allowed to carry that over next year.

Here are some things to consider to ensure you can uphold your PSL policy without defaulting to the state policy:

1. What companies are required to participate in PSL?
The PSL law covers all types of employers regardless of employee size.

2. What employees are covered under PSL?
Employees include seasonal, part-time, hourly, seasonal, exempt and nonexempt employees. Any employee who has worked in California for the same company for at least 30-days is included in the PSL law. The only exclusion is for employees covered by a collective bargaining agreement that provides paid sick days or a paid time off policy that permits the use of sick days, in-home support service workers, airline flight deck and cabin crew, and certain public sector workers. However please be aware that this can vary by city with the city where the employee works trumping the California PSL law.

3. If companies have a generous sick leave policy, do they need to revise it?
YES! There are variations of the new law that might not be written into your policy including how and why the employee may use their sick leave. Limiting how the employees use sick leave can easily void the written policy and default to the state policy. Also, older sick leave policies might not include part-time employees whereas the new law does. Making sure the pre-existing policy meets the requirements of the new PSL law is important.

4. Can companies use different methods for different groups of employees?
YES! There are two options available where employees can be grouped into accrual options (one hour of PSL for every 30 hours worked) or three days/24-hours at the beginning of each year of employment.

5. Are there different laws depending on where the employee works?
YES! Knowing the laws where the employee works is very important as these laws trump the California state PSL law. Currently San Francisco, Oakland, Emeryville, Los Angeles, San Diego and Santa Monica have different variation of the PSL law.

Unfortunately this is just the beginning of the various loopholes an employee can use to default to the California PSL law. Understanding recordkeeping obligations, calculating sick leave time, reporting requirements, communication policies, and understanding local ordinances are a must when revising and preparing a PSL policy within your company. Simply forgetting to report an accrual on a paystub can leave you defaulting to the state PSL law without your knowledge.


For a review of where you are with your PSL compliance please call Malcolm or Scott today at 800-451-1136.

Author: Scott Evers, VP of Sales at HR Ledger, Inc.
Connect with Scott on LinkedIn: 

Time Clock and Attendance Systems

Businesses of all sizes need to use some type of time clock and attendance systems to record when employees start and stop work, and the departments where that work is performed.  Recently, it’s becoming more common to track meals and breaks, the type of work performed, and for whom.  In addition to tracking when employees work, businesses and organizations need to track when employees are not working.  Vacation time, Personal Time Off, Sick Time (mandated and not) FMLA time, and jury duty should be recorded.  Some organizations also keep detailed records of attendance issues such as who calls in sick and who comes in late.

A dedicated time clock and attendance system provides many benefits.  It enables an employer to have at their fingertips all of their employees working hours.  It helps control labor costs by reducing over-payments, which are often caused by transcription error, interpretation error and intentional error.  It is often difficult to comply with labor regulation, but a time and attendance system is invaluable for ensuring compliance with labor regulations regarding proof of attendance.

A time clock and attendance system also protects a company from payroll fraud and provides both employer and employees with confidence in the accuracy of their wage payments all while improving productivity.

So what is the best for you and your company?

Manual Systems

Manual systems rely on highly skilled people laboriously adding up paper time cards which have times stamped onto them using a time stamping machine, or simply hand written in by the employee.  Many times this is the owner who thinks if I do the work there is no cost.  Nothing could be further from the truth.  The owner’s time is the most expensive time the company has or should have to spend.  The time you spend doing this is not spent in sales, development, production, shipping or any of the countless other revenue generating activates you should be involved in.

Hiring young minimum wage people to do this task is a receipt for disaster filled with inaccuracy, error and fraud!

Time stamping machines have been in use for over a century are still used by many organizations as a perceived cheaper alternative to time and attendance software.  But are they really a savings?  Although more accurate than hand written cards Time Stamping has many draw backs above and beyond the exorbitant labor cost and potential fraud.  The “data” still needs to be entered into the payroll system adding additional cost and chance for error or theft.

Automated Systems

Automated time and attendance systems such as HUB, SwipeClock and Attendance On Demand can provide Computer Logons, Key Fobs, expensive but “buddy punch” proof Bio-Metric clocks (vein reader, hand geometry, fingerprint, or facial).  The recorded information is then automatically transferred to payroll service like HR Ledger without the cost or risk of additional employee handling.  An automated system reduces the risk of errors that are common in a manual system, and allows the workforce to be more productive instead of wasting time and money on tedious administrative tasks thus saving cost, costly errors and downright stealing!

Whatever system you currently use, or don’t use, needs to be reviewed to determine if it is the best system for you and to see if a safer and more economical system should be installed.

Feel free to call your HR Ledger Payroll Consultant, Malcolm or Scott to discuss what system would be best for you.

Author: Scott Evers, VP of Sales at HR Ledger, Inc.
Connect with Scott on LinkedIn: