(April 17, 2008) A California Chamber of Commerce-opposed bill that unreasonably expands employers' costs and liability for a new protected and paid sick leave for employees passed an Assembly policy committee this week.

AB 2716 (Ma; D-San Francisco) mandates that all employers provide paid sick leave to an employee after seven days of work in a calendar year to care for their own illness, or to provide care to a sick child, spouse, domestic partner, other relative, or some other person that they designate.

AB 2716 passed the Assembly Judiciary Committee, 7-3, on April 15.

New Mandate on Employers

AB 2716 extends to all employers and all employees, as specified. There are no exceptions.

Most California employers participate in the California State Disability Insurance program (SDI), which is paid for through payroll deductions and provides temporary disability benefits for employees who are disabled by a non-work-related illness or injury. The employer is not required by law to offer paid sick leave to employees in addition to mandated SDI benefits. In fact, payment of sick leave may reduce the SDI benefits to which an individual is entitled.

Many California employers provide paid sick leave and/or paid vacation time even though current law does not require it. Under current law, unlike vacation days, sick leave does not accrue nor vest. Therefore, any unused sick leave may be forfeited at the end of a designated period of time. AB 2716 proposes to require unused paid sick time to carry over from year to year.

Expanding Current Law

Furthermore, AB 2716 proposes to expand current law by:

• Requiring employers to include on the itemized wage statement the paid sick leave accrued and used.
• Requiring employers to allow employees who have no spouse or registered domestic partner to designate another person to care for using the paid sick leave. There is no requirement for a familial relationship.  
• Requiring the Department of Industrial Relations to administer and enforce the bill’s provisions, including the promulgation of regulations, investigation of complaints, mitigation, and relief of violations of these requirements. The bill does not acknowledge nor provide for state funding or appropriations for these requirements. 
• Establishing new sanctions and rights of action against employers related to this new paid protected leave. Under this bill, employers could be subjected to civil action in court and/or fines through the Department of Labor Standards Enforcement. California employers already operate under complex and punitive labor laws. Expanding leave opportunities for employees while creating new liabilities for employers would further exacerbate this problem by layering on additional cost pressures for businesses.
• This new protected, paid sick leave requirement applies regardless of business necessity of the employer -- if the employee has accrued leave and qualifies for the leave, it can be taken. This bill further expands employer liability by creating a rebuttable presumption of unlawful retaliation if an employer denies an employee’s use of sick leave, or takes any adverse employment action toward an employee who has filed a complaint or used paid sick days. 
• Expanding recordkeeping and payroll reporting requirements that will be burdensome to administer, especially for small businesses that may lack adequate resourses and expertise.

The ever-increasing burden of costly mandates on employers can cumulatively result in lower wages, reducing available health insurance, limiting training programs and -- in the worst case scenario -- job loss or reduced work hours. The CalChamber believes that in an already-troubled economy California should be seeking ways to stimulate job growth and avoid forcing costly mandates on employers.  

Key Vote

AB 2716 passed Assembly Judiciary 7-3 on April 15.

Ayes: Jones (D-Sacramento), Evans (D-Santa Rosa), Feuer (D-Los Angeles), Krekorian (D-Burbank), Laird (D-Santa Cruz), Levine (D-Van Nuys), Lieber (D-Mountain View).
 
Noes: Tran (R-Costa Mesa), Adams (R-Hesperia), Keene (R-Chico).

Action Needed

AB 2716 is scheduled to be considered by the Assembly Appropriations Committee. Contact your Assembly representative and members of the Assembly Appropriations and urge them to oppose AB 2716. For a sample letter, visit www.calchambervotes.com.

Staff Contact: Marti Fisher

Video Library

AB 2716 — Sick Leave Mandate

Additional Materials

Labor and Employment