BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de León, Chair


          AB 1522 (Gonzalez) - Employment: Paid Sick Leave
          
          Amended: June 15, 2014          Policy Vote: L&IR 3-1 Judiciary  
          5-2
          Urgency: No                     Mandate: No
          Hearing Date: August 14, 2014                           
          Consultant: Robert Ingenito     
          
          SUSPENSE FILE. AS AMENDED.


          Bill Summary: AB 1522 would require employers to provide at  
          least three paid sick days to employees who work 30 or more days  
          in a calendar year.

          Fiscal Impact (as approved on August 14, 2014): 

                 The Department of Industrial Relations (DIR) indicates  
               that it would incur first-year costs of $1.2 million  
               (special funds) associated with training, rulemaking,  
               investigation and enforcement of complaints. Ongoing costs  
               of would be $1.1 million, related to ongoing investigation  
               and enforcement of wage and retaliation claims. 

                 The Department of Justice would incur costs of $536,000  
               in 2014-15 and about $900,000 annually ongoing (General  
               Fund), for investigation and prosecution of statutory  
               violations, to the extent the bill leads to increased civil  
               action.

                 Increased compensation costs related to the In-Home  
               Supportive Services (IHSS) Program. Increased IHSS costs  
               are estimated to be about $14 million annually (General  
               Fund). 


          Background: Current law provides employees the opportunity to  
          take both paid and unpaid leave from work without fear of  
          discharge or discrimination for a number of specified purposes,  
          including personal and family sick leave.  Current law does not,  
          however, generally require employers to provide paid sick leave.  
          At present, only one county (San Francisco) has passed an  








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          ordinance requiring employers to provide paid sick leave for all  
          employees, including temporary and part-time employees, who work  
          within the county.  The ordinance became effective on February  
          5, 2007.  

          Proposed Law: Specifically, this bill would, among other things,  
          do the following:

                 Provide that on or after July 1, 2015, an employee who  
               works for 30 or more days in a calendar year is entitled to  
               paid sick days.

                 Specify that paid sick days accrue at a rate of no less  
               than one hour for every 30 hours worked, and may be used  
               beginning on the 90th calendar day of employment.  

                 Provide that paid sick days may accrue and be carried  
               over to the following year; however, employers may limit  
               their use to 24 hours or 3 days in each calendar year. 

                 Provide that "employer" includes any person employing  
               another and includes the state, political subdivisions of  
               the state, and municipalities.  

                 Provides that an "employee" does not include one who is  
               (1) covered by a valid collective bargaining agreement that  
               expressly provides for paid sick days or similar policy, as  
               specified, or (2) in the construction industry covered by a  
               valid collective bargaining agreement that was entered into  
               before January 1, 2015 or waives the requirements of this  
               bill, as specified.

                 Provides that a public authority must comply with these  
               requirements for individuals who perform in-home supportive  
               services, except that these requirements  may be satisfied  
               by entering into a collective bargaining agreement that  
               provides an incremental hourly wage adjustment in an amount  
               sufficient to satisfy the bill's requirements. 

                 Require an employer, upon oral or written request of an  
               employee, to provide paid sick days for the following  
               purposes: (1) diagnosis, care or treatment of an existing  
               health condition of, or preventive care for, an employee or  
               the employee's family member, or (2) for an employee who is  








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               a victim of domestic violence, sexual assault, or stalking  
               as specified. 

                 Define "family member" to include a child (as  
               specified), a parent (as specified), a spouse, a registered  
               domestic partner, a grandparent, a grandchild, or a  
               sibling.

                 Not require an employer to provide compensation to an  
               employee for accrued, unused paid sick days upon  
               termination, resignation, retirement, or other separation  
               from employment, except if an employee is rehired by the  
               same employer within one year, any previously accrued,  
               unused paid sick days shall be reinstated.  

                 Allow an employer to lend paid sick days to an employee  
               in advance of accrual, at the employer's discretion and  
               with proper documentation.   

                 Prohibit an employer from requiring employees to find a  
               replacement worker as a condition of using his/her paid  
               sick days. 

                 Prohibit an employer from denying an employee the right  
               to use sick days, discharging, threatening to discharge,  
               demoting, suspending or in any manner discriminating  
               against an employee for using sick days, as specified.  

                 Establish a rebuttable presumption of unlawful  
               retaliation if an employer denies an employee the right to  
               use sick days or takes other specified adverse action  
               within 30 days of specified protected activities by the  
               employee.  

                 Require employers to provide written notice in specified  
               languages and comply with posting requirements, as  
               specified, or be subject to a civil fine for not  
               compliance.

                 Require employers to retain employee records related to  
               used and accrued paid sick days for at least five years. 

                 Require employer to include in employee wage statements  
               any paid sick leave accrued and used pursuant to this Act. 








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                 Direct the Labor Commissioner to (1) coordinate  
               implementation and enforcement of these requirements and to  
               promulgate guidelines and regulations, (2) investigate  
               alleged violations and order appropriate relief, including  
               reinstatement, back pay, the payment of sick days  
               unlawfully withheld, and additional administrative  
               penalties, as specified, and (3) in addition to the  
               Attorney General, bring a civil action against an employer  
               in a court of competent jurisdiction to recover relief, as  
               specified, including back pay, penalties, liquidated  
               damages and attorney's fees and costs. 

          
          Related Legislation: AB 400 (Ma) in 2011 was substantially  
          similar to this bill except that it limited the use of paid sick  
          days to 40 hours per year or five days (for small businesses)  
          and 72 hours per year or nine days for other businesses. The  
          bill was held in the Assembly Appropriations Committee. 
          
          Staff Comments: As noted by the Legislative Analyst, beginning  
          in the late 1980s, California appellate courts issued a series  
          of opinions addressing the definition of a state-reimbursable  
          mandate.  The courts found that a mandate is created when the  
          state requires local governments to provide a new or upgraded  
          program to the public, or imposes a unique requirement on local  
          governments that does not apply generally to residents and  
          entities of the State.  In County of Los Angeles v State of  
          California (1987) and City of Sacramento v State of California  
          (1990), the California Supreme Court ruled that state laws that  
          extended worker compensation and unemployment insurance  
          protections to local employees did not constitute reimbursable  
          mandates.  Specifically, the court found that local government  
          employer obligations were comparable to other employers, and  
          were not attributable to providing a new program to the public.   
          Together, these cases form the basis of what is commonly  
          referred to as the "law of general applicability."  That is, if  
          a statute imposes similar obligations on the private and public  
          sector, the public sector's costs to comply with the requirement  
          do not constitute a state-reimbursable mandate.

          In IHSS, the recipient is technically the employer and a  
          provider can work for more than one recipient.  It is unclear if  
          a provider would get seven days of sick leave per provider and  








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          who the provider would contact regarding sick leave and how the  
          county is notified.  How this information would be tracked,  
          records on sick leave balances maintained and compensation  
          adjusted is also unclear.  This bill proposes to address this,  
          in part, by allowing a public authority to enter into a  
          collective bargaining agreement that provides an hourly wage  
          adjustment in an amount sufficient to satisfy the accrual  
          requirement (paid sick leave at the rate of no less than one  
          hour for every 30 hours worked), essentially money instead of  
          sick leave.

          Author's amendments:
                 Strike requirements for including accrued and used sick  
               leave credit on employee paystubs, and allow employers the  
               option of either including available sick leave credit on a  
               paystub, or on a separate document that accompanies the  
               employee's regular wage statements.
                 Cap various administrative penalties at $4,000.
                 Provide that an employer whose sick leave or paid time  
               off policy allows for at least three days annually,  
               regardless of whether it is on an upfront or accrual basis,  
               will comply.
                 Allow an employer to limit total accrual of paid sick  
               leave to six days as long as three days are available for  
               employee use annually.
                 Make technical and clarifying changes.