Paid Sick Leave Compliance

Overview

California law requires most employers to provide Paid Sick Leave to employees working in the state. Paid Sick Leave applies to full-time, part-time, and temporary employees, regardless of immigration status. While several California cities have adopted local paid sick leave ordinances with expanded requirements, this section explains the California statewide standard, which applies to the vast majority of employers.

Important Note: If your employees work in a city with a local paid sick leave ordinance, you must comply with both state law and the applicable local ordinance. Local variations are addressed separately in the Local Paid Sick Leave Addendum below.



Who Is Entitled to Paid Sick Leave?

An employee is entitled to Paid Sick Leave if they:

  • Work for the same employer for at least 30 days within a year in California

This includes:

  • Full-time employees

  • Part-time employees

  • Temporary employees

Independent contractors are not covered.



Minimum Paid Sick Leave Requirement

(Statewide Standard)

Employers must allow employees to use at least 40 hours or 5 days of Paid Sick Leave per year — whichever provides more time off for the employee.

How to Apply This Rule

  1. Calculate 5 days of sick leave based on the employee’s normal workday length.

  2. Compare that number to 40 hours.

  3. Use the higher number.

That’s the minimum amount the employee must be allowed to use in a year.

Examples

Example 1: Long Shifts
An employee works 10-hour shifts.

  • 5 days × 10 hours = 50 hours

  • Compare to 40 hours → 50 hours applies

Example 2: Shorter Shifts
An employee works 6-hour shifts.

  • 5 days × 6 hours = 30 hours

  • Compare to 40 hours → 40 hours applies

Permitted Uses of Paid Sick Leave

Employees may use Paid Sick Leave for:

  • Their own physical or mental illness, injury, or health condition

  • Preventive care, diagnosis, or medical treatment

  • Caring for a family member who is ill or needs medical care

Employers may not require employees to disclose the nature of the illness or medical condition.



When Can Paid Sick Leave Be Used?

Employees may begin using accrued paid sick leave on the 90th day of employment.

Even though an employee qualifies for paid sick leave after working 30 days, usage can legally be delayed until day 90.



Methods of Providing Paid Sick Leave

Employers may choose one of the following compliant methods below.


Method 1: Accrual Policy

(Industry Standard Default)

Under an accrual policy, employees earn paid sick leave over time.


Minimum accrual rate

  • At least 1 hour of paid sick leave for every 30 hours worked

Example

  • An employee works 30 hours in a week → earns 1 hour of paid sick leave

  • An employee works 60 hours → earns 2 hours of paid sick leave

This method always satisfies California’s minimum requirements.

Carryover Requirement

  • Unused paid sick leave must carry over from year to year.

  • However, employers are allowed to place reasonable caps on use and total accrual.

Accrual Caps

Employers may limit:

  1. Annual use of paid sick leave to 40 hours or 5 days per year, and

  2. Total accrual to 80 hours or 10 days

Example

If an employee has already accrued 80 hours, they stop earning additional sick leave until some of it is used.

Bottom Line for Employers

  • 1 hour for every 30 worked = always safe

  • Alternative schedules are allowed only if employees earn leave fast enough

  • Carryover is required, but caps are allowed


Method 2: Up-Front Policy

Under an up-front policy, the employer provides the full annual amount of paid sick leave at the beginning of the year.

Requirements

  • At least 40 hours or 5 days must be made available each year

  • The employer may define the 12-month period (calendar year, anniversary year, or other fixed period)

New Hire Rule

For new employees:

  • At least 24 hours by day 120

  • At least 40 hours by day 200

Unused sick leave does not need to carry over under a valid up-front policy.

Notice Requirements

  • Foreseeable leave (e.g., scheduled appointment): Employee must provide reasonable advance notice

  • Unforeseeable leave (e.g., sudden illness): Notice as soon as practicable

An employee is entitled to use paid sick leave upon oral or written request.


Discipline and Retaliation Prohibited

Employers may not discipline, discharge, demote, suspend, or retaliate against an employee for:

  • Using or attempting to use paid sick leave

  • Filing a complaint regarding sick leave rights

  • Participating in an investigation

  • Opposing an unlawful sick leave policy

Attendance policies may not be enforced in a way that penalizes lawful use of paid sick leave.


When Discipline May Be Allowed

Discipline may be appropriate if:

  • The employee has no accrued or available sick leave, and

  • The absence violates a neutral attendance policy, and

  • The absence is not protected by paid sick leave law

Pay Rate for Paid Sick Leave


Non-Exempt Employees

Paid Sick Leave must be paid at the employee’s regular rate of pay — not less than what the employee normally earns. Employers may calculate the rate using either of the following methods below.

Option 1: Current Workweek Rate

Pay the employee their regular hourly rate during the workweek in which the sick leave is taken.

Example

An employee earns $22/hour during the week they take sick leave → Sick leave must be paid at $22/hour.


Option 2: 90-Day Average Rate

Pay the employee based on their average hourly rate over the prior 90 days, excluding overtime premium pay.

Example

Over the last 90 days, an employee earned $5,400 in straight-time pay for 240 hours worked.
$5,400 ÷ 240 = $22.50/hour → Sick leave must be paid at $22.50/hour.

Important: Overtime premiums are excluded from this calculation, but non-discretionary bonuses, commissions, and different hourly rates are included when applicable.


Exempt Employees

Paid Sick Leave for exempt employees must be paid the same way the employer pays other forms of paid leave, such as vacation or PTO.

Example

If an exempt employee receives their full salary during vacation days, they must also receive their full salary during paid sick leave days.

Key Takeaway

  • Sick leave pay must reflect what the employee normally earns

  • Employers may choose either calculation method for non-exempt employees but must apply it consistently

  • Exempt employees are paid sick leave under the same rules as other paid leave



Timing of Payment for Paid Sick Leave

Paid Sick Leave must be paid no later than the employee’s next regular payday after the sick leave is taken.


Examples

Example 1: Biweekly Payroll
An employee takes paid sick leave on March 3. The next regular payday is March 15.
→ The sick leave wages must be included in the March 15 paycheck.

Example 2: Weekly Payroll
An employee takes paid sick leave on Thursday, June 6. Payroll is issued every Friday.
→ The sick leave wages must be paid on the June 7 paycheck.

Key Rule: Employers do not have to issue a special paycheck for sick leave, but they cannot delay payment beyond the next scheduled payday.


Separation and Reinstatement of Paid Sick Leave

No Cash-Out Requirement at Separation

Employers are not required to pay out unused paid sick leave when an employee resigns or is terminated — unless the employer’s policy specifically promises a payout.

Example

An employee separates with 18 unused sick leave hours   →   The employer does not need to pay those hours at termination.


Reinstatement Upon Rehire (Within 12 Months)

If an employee is rehired within 12 months, the employer must restore any previously accrued and unused paid sick leave, unless it was paid out at separation.


Examples

Example 1: Rehire Without Payout
An employee leaves with 24 unused sick leave hours. They are rehired 8 months later.
→ The employer must reinstate the 24 hours.


Example 2: Rehire After Payout
An employer voluntarily paid out unused sick leave at separation. The employee is rehired 6 months later.
→ The employer does not need to reinstate sick leave hours that were already paid.

Key Takeaways

  • Paid sick leave must appear on the next regular paycheck

  • Sick leave does not have to be cashed out at termination

  • Rehire within 12 months = reinstatement, unless already paid



Recordkeeping Requirements

Employers must:

  • Track sick leave accrued and used for at least 3 years

  • Make records available to employees upon request

  • Show available sick leave balances on:

    • Pay stubs, or

    • A written document issued on payday

If sick leave is unlimited, the pay stub must state “Unlimited.”



Local Paid Sick Leave Addendum

(Important)

Several California cities impose more generous paid sick leave requirements, including but not limited to:

  • Los Angeles

  • San Francisco

  • San Diego

  • Oakland

  • Berkeley

  • Santa Monica

  • West Hollywood

  • Emeryville

If any employee works within a city with a local paid sick leave ordinance, the employer must comply with the local ordinance that applies to the employee’s work location, even if the employer’s primary place of business is elsewhere.

Where a local ordinance provides greater benefits or protections than California’s statewide paid sick leave law, the local ordinance controls.


Key Takeaways

  • Paid sick leave is mandatory for most California employees

  • Employers may choose accrual or up-front methods

  • Retaliation for sick leave use is prohibited

  • Final policies must account for local ordinances where applicable

  • Clean recordkeeping and clear policies significantly reduce risk