BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1522| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 1522 Author: Gonzalez (D), et al. Amended: 8/22/14 in Senate Vote: 21 SENATE LABOR & INDUSTRIAL RELATIONS COMMITTEE : 3-1, 6/11/14 AYES: Hueso, Leno, Padilla NOES: Wyland NO VOTE RECORDED: Mitchell SENATE JUDICIARY COMMITTEE : 5-2, 6/24/14 AYES: Jackson, Corbett, Lara, Leno, Monning NOES: Anderson, Vidak SENATE APPROPRIATIONS COMMITTEE : 5-0, 8/14/14 AYES: De León, Hill, Lara, Padilla, Steinberg NO VOTE RECORDED: Walters, Gaines ASSEMBLY FLOOR : 52-23, 5/29/14 - See last page for vote SUBJECT : Employment: paid sick days SOURCE : California Labor Federation, AFL-CIO California State Council of the Service Employees International Union DIGEST : This bill enacts the Healthy Workplaces, Healthy Families Act of 2014, which requires employers to provide paid sick days to employees who work 30 or more days within a year CONTINUED AB 1522 Page 2 from commencement of employment. Senate Floor Amendments of 8/22/14 add to the currently exempt employees, as specified; specifies requirements for notifying employers of the need to use the leave; specifies the rate of pay for the sick leave; and require employers to provide information to employee's regarding the paid sick leave policy through a written notice currently required for new hires. ANALYSIS : Existing law provides for various forms of unpaid and (in some circumstances) paid leave for employees. Existing law authorizes, but does not require, employers to provide their employees with paid sick leave. Any employer that chooses to provide sick leave must allow an employee to use accrued and available sick leave, in an amount not less than the sick leave that would be accrued during six months at the employee's then current rate of entitlement. Sick leave can be used by the employee for any of the following reasons: Being physically or mentally unable to work due to illness, injury, or a medical condition of the employee. Obtaining professional diagnosis of treatment for a medical condition of the employee. Other medical reasons of the employee, such as pregnancy or obtaining a physical examination. To attend to an illness of a child, parent, spouse, or domestic partner of the employee. Existing law does not require this sick leave to accrue, from one year to the next, nor does it vest. In addition, sick leave does not extend the maximum period of leave to which an employee is entitled under other leaves, such as the federal Family and Medical Leave Act, regardless of whether sick leave is received during that leave. Existing law prohibits employers from denying an employee the right to use sick leave or discharge, threaten to discharge, demote, suspend, or in any manner discriminate against an employee for using, or attempting to use, sick leave to attend to an illness of a child, parent, spouse, or domestic partner of the employee. Violation of this right entitles employees to CONTINUED AB 1522 Page 3 reinstatement and actual damages or one day's pay, whichever is greater, and to appropriate equitable relief. The employee can either file a complaint with the Labor Commissioner, or bring a civil action for remedies. Currently, San Francisco County is the only county that has passed an ordinance requiring employers to provide paid sick leave for all employees, including temporary and part-time employees, who work within the county. The San Francisco Paid Sick Leave Ordinance became effective on February 5, 2007. This bill enacts the Healthy Workplaces, Healthy Families Act of 2014, which requires employers to provide paid sick days to employees who work 30 or more days within a year from the commencement of employment. Specifically, this bill: 1. Provides that, an employee who, on or after July 1, 2015, works for 30 or more days in a within a year from commencement of employment is entitled to paid sick days. 2. Specifies 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 day of employment. 3. Provides that paid sick days may accrue and be carried over to the following year; however, employers may limit their use to 24 hours or three days in each year. No accrual or carry over is required if the full amount of leave is received at the beginning of each year, as specified. 4. Provides that "employer" includes any person employing another and includes the state, political subdivisions of the state, and municipalities. 5. Provides that an "employee" does not include: An employee covered by a valid collective bargaining agreement that expressly provides for paid sick days or similar policy, as specified. An employee 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. CONTINUED AB 1522 Page 4 An employee covered by a valid collective bargaining agreement who performs domestic services comprising in-home supportive services, as specified. An individual employed by an air carrier as a flight deck or cabin crew member that is subject to specified provisions. 1. Requires an employer, upon oral or written request of an employee, to provide paid sick days for the following purposes: Diagnosis, care or treatment of an existing health condition of, or preventive care for, an employee or the employee's family member; or For an employee who is a victim of domestic violence, sexual assault, or stalking as specified. 1. Defines "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. 2. Does 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 from the date of separation, any previously accrued, unused paid sick days shall be reinstated. 3. Does not require an employer to provide additional paid sick days, as specified, if the employer has a paid leave police or paid time off policy, the employer makes available an amount of leave that may be used for the same purposes and under the same conditions, as specified. 4. Allows an employer to lend paid sick days to an employee in advance of accrual, at the employer's discretion and with proper documentation. 5. Requires an employer to provide an employee with written notice that sets forth the amount of paid sick leave available or paid time leave and employee provides in lieu of CONTINUED AB 1522 Page 5 sick leave for use on either the employee's itemized wage statement, as specified. 6. Provides that an employer has no obligation under this bill to allow an employee's total accrual of paid sick leave to exceed 48 hours or six days, as specified. 7. Requires the rate of pay to be the employee's hourly wage. If the employee in the 90 days of employment before taking accrued sick leave had different hourly pay rates, was paid by commission or piece rate, or was a nonexempt salaried employee, then the rate of pay shall be calculated by dividing the employee's total wages, not including overtime premium pay, by the employee's total hours worked in the full pay periods of the prior 90 days of employment. 8. Requires, if the need for paid sick leave is foreseeable, the employee to provide reasonable advance notification. If the need for paid sick leave is unforeseeable, the employee shall provide notice of the need for the leave as soon as practicable. 9. Requires an employer to provide payment for sick leave taken by an employee no later than the payday for the next regular payroll period after the sick leave was taken. 10.Prohibits an employer from requiring employees to find a replacement worker as a condition of using his/her paid sick days. 11.Establishes 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. 12.Requires an employer to keep for at least three years records documenting the hours worked and paid sick days accrued and used by an employee, and allows the Labor Commissioner to access these records. Requires an employer to make these records available to an employee in the same manner as described. If an employer does not maintain adequate records pursuant to this section, it shall be presumed that the employee is entitled to the maximum number of hours accruable under this article, unless the employer CONTINUED AB 1522 Page 6 can show otherwise by clear and convincing evidence. 13.Directs the Labor Commissioner to: Coordinate implementation and enforcement of these requirements and to promulgate guidelines and regulations; 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 In addition to the Labor Commissioner, the Attorney General may bring a civil action against an employer in a court of competent jurisdiction to recover relief on behalf of the aggrieved, as specified. 1. Specifies that this bill establishes minimum requirements for paid sick days and does not preempt, limit, or otherwise affect the applicability of any other law or similar requirement that provides greater accrual or use of sick days, or that extends other protections to employees. 2. Makes several findings and declarations related to employees and the need and benefits of providing for paid sick days. 3. Caps various administrative penalties at $4,000. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No SUPPORT : (Verified 8/21/14)(Unable to reverify at time of writing) California Labor Federation, AFL-CIO (co-source) California State Council of the Service Employees International Union (co-source) 9to5 National Association of Working Women Alameda Labor Council, AFL-CIO American Civil Liberties Union of CA American Federation of State, County and Municipal Employees, AFL-CIO Breathe California Broad and Gusman, LLP Attorneys at Law CONTINUED AB 1522 Page 7 California Bus Association California Catholic Conference of Bishops California Communities United Institute California Employment Lawyers Association California Medical Association California Nurses Association California Professional Firefighters California School Employees Association, AFL-CIO California State Association of Electrical Workers California State Pipe Trades Council California Teachers Association California Work and Family Coalition City and County of San Francisco Communication Workers of America, AFL-CIO, District 9 Consumer Attorneys of California Family Caregiver Alliance Glendale City Employees Association Health Officers Association of California International Longshore and Warehouse Union, Southern California District Council Legal Aid Society - Employment Law Center National Association of Social Workers, California Chapter National Association of Working Women Next Generation Organization of SMUD Employees Parent Voices San Bernardino Public Employees Association San Luis Obispo County Employees Association Santa Rosa City Employees Association Teamsters UNITE Here United Domestic Workers of America, AFSCME, Local 3930 United Nurses Associations of California / Union of Health Care Professionals Western Center on Law and Poverty Western State Council of Sheet Metal Workers Young Invincibles OPPOSITION : (Verified 8/21/14)(Unable to reverify at time of writing) Acclamation Insurance Management Services Air Conditioning Trade Association CONTINUED AB 1522 Page 8 Alhambra Chamber of Commerce Allied Managed Care Associated Builders and Contractors - San Diego Chapter Associated Builders and Contractors of California Associated General Contractors Association of California Brawley Chamber of Commerce Brea Chamber of Commerce California Asian Chamber of Commerce California Association of Health Facilities California Association of Licensed Security Agencies, Guards and Associates California Association of Winegrape Growers California Attractions and Parks Association California Automatic Vendors Council California Bankers Association California Beer & Beverage Distributors California Business Properties Association California Business Roundtable California Chamber of Commerce California Chapter of American Fence Association California Employment Law Council California Farm Bureau Federation California Fence Contractors' Association California Grocers Association California Hotel & Lodging Association California Independent Grocers Association California League of Food Processors California Manufacturers and Technology Association California New Car Dealers Association California Newspaper Publishers Association California Pool and Spa Association California Professional Association of Specialty Contractors California Restaurant Association California Retailers Association California Travel Association California Trucking Association Carlsbad Chamber of Commerce CAWA - Representing the Automotive Parts Industry Cerritos Regional Chamber of Commerce Chambers of Commerce Alliance of Ventura & Santa Barbara Counties City of Cerritos Convention-Visitors Bureau Dana Point Chamber of Commerce CONTINUED AB 1522 Page 9 Desert Hot Springs Chamber of Commerce and Visitors Center El Centro Chamber of Commerce Flasher Barricade Association Fountain Valley Chamber of Commerce Fullerton Chamber of Commerce Gateway Chambers Alliance Greater Bakersfield Chamber of Commerce Greater Conejo Valley Chamber of Commerce Greater Fresno Area Chamber of Commerce Greater Riverside Chambers of Commerce Greater San Fernando Valley Chamber of Commerce Huntington Beach Chamber of Commerce International Franchise Association Lodi Chamber of Commerce Long Beach Area Chamber of Commerce Marin Builders Association National Federation of Independent Business Orange County Business Council Oxnard Chamber of Commerce Palm Desert Area Chamber of Commerce Plumbing-Heating-Cooling Contractors Porterville Chamber of Commerce Redondo Beach Chamber of Commerce San Diego East County Chamber of Commerce San Gabriel Valley Coalition San Jose Silicon Valley Chamber of Commerce Santa Clara Chamber of Commerce and Simi Valley Chamber of Commerce Southwest California Legislative Council Tahoe Chamber of Commerce Torrance Area Chamber of Commerce Turlock Chamber of Commerce Visalia Chamber of Commerce Western Carwash Association Western Electrical Contractors Association Western Growers Association Wine Institute ARGUMENTS IN SUPPORT : According to the author and proponents, under current state law, nothing requires employers to provide paid sick days, and as a result, roughly 39% of the workforce earns no sick leave benefits whatsoever. That leaves seven million Californians with few options when personal or family needs arise. Proponents argue that a worker without paid sick CONTINUED AB 1522 Page 10 leave is either expected to work while sick, risking the health and safety of co-workers and customers, or stay home and forego wages, jeopardizing that worker's own ability to survive. They argue that given the rising cost of living expenses, workers just cannot afford to lose a day's pay. According to the author, this bill appropriately allows workers to earn paid sick days, which they can use for personal illness, to care for a sick family member and to recover from domestic violence or assault. The author and proponents also point to studies which have found that providing sick days to workers saves money for businesses by reducing turnover, reducing the spread of illness in the workplace, and improving workers' morale and productivity. Furthermore, proponents argue that an overwhelming majority of the public believes employers should be required to offer paid sick days and point to a 2010 poll which found that 74% of adults surveyed would support a law guaranteeing paid sick days, with this position enjoying widespread support across party, gender, and ethnic lines. Finally, they argue that several local jurisdictions - and the state of Connecticut - have already passed this measure and found no adverse impact to employers; therefore, they argue that it is time to allow workers, the public, and employers access to all of the benefits offered by earned sick leave legislation. ARGUMENTS IN OPPOSITION : Opponents representing many large and small business associations argue that this bill would unreasonably expand employers' burdens, costs and liability. They argue that many employers already offer paid sick leave and believe that California should incentivize this practice rather than mandate it. With regards to the cost concern, opponents point out that many employers allow employees to accrue sick leave per pay period or per month, not according to the number of hours worked. Accordingly, such employers will have to completely change their policies in order to mirror the accrual rate proposed under this bill, resulting in increased cost to employers. Additionally, this bill mandates that accrued sick leave carry over from year to year, a practice currently not required therefore imposing a new burden on employers. Regarding the various penalties contained in the bill, opponents argue that, while an employee should be made whole for any violation of the law, the layering of additional penalties, such CONTINUED AB 1522 Page 11 as treble damages, is simply an unjustified windfall. Opponents also object to the bill's creation of a rebuttable presumption of retaliation, arguing that the burden will fall on the employer to prove that employment decisions were valid, instead of the burden falling on the employee to prove retaliation. For example, an employee who took paid sick leave returns to work the following day and is caught stealing, he/she is then terminated, however, this individual would be protected under the automatic rebuttable presumption and the burden would then fall on the employer to prove its actions were valid. Another point of concern for opponents is the new posting and notice requirements, with additional penalties for noncompliance, required in the bill which they argue puts employers at risk of litigation. Current law already requires employers to post over 15 different notices and they argue that at some point the posting of such information becomes just another added expense without any corresponding benefit to employees overwhelmed with postings. Also of concern to opponents is the requirement in the bill that gives local counties and cities authority to adopt more stringent paid sick leave requirements than is included in the bill. They argue that this provision will create inconsistency and confusion for California employers who operate in different jurisdictions. ASSEMBLY FLOOR : 52-23, 05/29/14 AYES: Alejo, Ammiano, Bloom, Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau, Chesbro, Dababneh, Daly, Dickinson, Eggman, Fong, Fox, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gray, Hall, Roger Hernández, Holden, Jones-Sawyer, Levine, Lowenthal, Medina, Mullin, Nazarian, Pan, Perea, John A. Pérez, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting, Weber, Wieckowski, Williams, Yamada, Atkins NOES: Achadjian, Allen, Bigelow, Chávez, Conway, Dahle, Donnelly, Beth Gaines, Gorell, Grove, Hagman, Harkey, Jones, Linder, Logue, Maienschein, Mansoor, Melendez, Nestande, Patterson, Wagner, Waldron, Wilk NO VOTE RECORDED: Cooley, Frazier, Muratsuchi, Olsen, Vacancy PQ:nl 8/25/14 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE CONTINUED AB 1522 Page 12 **** END **** CONTINUED