California does not require employers to pay employees vacation time. However, California PTO laws do govern employee sick time. Most California employees are entitled to at least 24 hours or three days of paid sick time each year.
In addition to vacation time, California doesn’t mandate paid family leave, jury duty leave, or bereavement leave. Therefore, for the purposes of this guide discussing California PTO laws, I’m going to focus on the paid sick time laws in the state.
Some cities in California also have paid sick time laws offering workers within their jurisdiction more paid sick time than the state requires, which I’ll discuss more below.
California Accrual Requirements
Current PTO laws in California only govern employee sick time under the state’s paid sick leave law. The law took place in 2015 and is available in its entirety in sections 245-249 of the state’s labor code.
According to California law, employees who work with an employer for at least 30 days within one year after being hired and are employed on or after July 1, 2015, are eligible for paid sick time. Eligible employees must also work for at least 90 days with the employer before they can use their paid sick leave.
California paid sick time accrues at the rate of one hour per 30 hours worked. Therefore, a person working 160 hours in a month would earn slightly more than five hours of paid sick leave during that month. Salaried employees without an hourly schedule should accrue hours based on a 40-hour workweek unless they usually work less than that.
Unlike other states that typically allow up to 40 hours of paid sick time to accrue each year, California only mandates that employees receive at least 24 hours, which is the equivalent of three paid days of sick time, each year. Employers can provide more than this if they choose, but their allowance must be clearly outlined in a PTO policy.
Employers can also choose to allow more than one hour per 30 hours worked to accrue. However, California requires these employers to ensure that employees have met the minimum of 24 hours by the end of the year.
As I mentioned, some California cities have different requirements for accruals, allowing workers within their jurisdiction to earn more than a minimum of 24 hours each year. These cities are:
- Berkeley: Businesses with fewer than 25 employees can cap accruals at 48 hours annually, while businesses with more than 25 employees can cap accruals at 72 hours annually.
- Los Angeles: Employers must provide at least 48 hours of paid sick time each year or allow it to accrue at one hour per 30 hours worked with a 72-hour cap.
- San Diego: Businesses are required to provide at least 40 hours of paid sick time each year and are allowed to cap a worker’s accrual at 80 hours annually.
I also want to note that earned sick time coverage did not go into effect for providers of in-home supportive service companies until 2018. These companies are now required to provide sick time, too, but differently than other companies.
Originally, in-home supportive service companies in California had to offer at least eight hours of sick time each year a person is employed. However, the paid time off requirement increases as the state’s minimum wage increases. For instance, the requirement rose to 16 hours with a $13 minimum wage. For years the state has had at least a $15 minimum wage, in-home supportive service employees must earn at least 24 hours of paid sick time annually.
Providers must work at least 200 hours or 60 days from the start of earning paid sick leave to use their accrued hours.
California Roll Over Requirements
A California employee must be employed for at least 90 days before they can use the paid sick time they’ve accrued. Any unused hours can roll over into the following year if the employee accrues hours based on the one hour per 30 hours worked model. Employers can limit the amount of unused carryover to 24 hours or three days of paid vacation.
Employers using a frontloading model for paid sick time—as in, giving their employees all 24+ hours at the beginning of the year—are not required to allow unused hours to move into the next year. Still, employers are free to allow this if they’d like to include it in their PTO policies. Additionally, employers do not have to allow more than 48 hours to accrue.
California employers in Berkeley, Los Angeles, and San Diego should remember to consult their local laws regarding roll over. For instance, Berkeley requires unused hours to carry over, but employers can limit the total amount of sick time hours each year based on the allowed caps for their business size.
California PTO Payout Requirements
In California, PTO must be paid at the same rate an employee typically gets paid. For hourly employees, paid sick time gets paid at their usual hourly rate.
On the other hand, salaried employees must have their rates calculated based on the amount they earned divided by the number of hours they worked during the previous 90-day period. Employers are also required to calculate other forms of paid leave, if offered, the same way in California.
Employees using their paid sick time benefit are entitled to payment for their used hours by the payday for the period following their sick time.
PTO laws in California state that employers do not have to pay workers for unused earned sick time if the worker separates from the company due to retirement, termination, or another form of separation.
This changes, though, if a worker begins working for the same employer again within one year after the separation. In this case, the employers must give the employee the unused hours they earned before leaving the company. However, if the employer did choose to pay out unused sick time upon an employee’s separation, the employer isn’t required to reinstate any hours if the employee becomes rehired.
If an employee gets rehired and is entitled to a reinstatement of their unused PTO hours, California does not require employers to allow any more than 48 hours of paid sick leave to accrue, but they can allow more in their PTO policies.
Other California Paid Leave Laws
Aside from paid sick time, California doesn’t mandate other forms of paid leave.
However, the state’s employers, by law, must follow the PTO policies they have in place, if any. For example, if an employer’s policy states that employees can earn up to three weeks of paid vacation time each year, the employer must provide that time and its applicable payment.
It’s in the best interest of every California company to have a clear PTO policy detailing accrual, payouts, rollover, calculations of paid leave, and other important features of employee time off. Doing so can help prevent legal issues involving a lack of clarity or misunderstanding in the policy’s wording.
Although paid family leave is not mandated in California, companies must allow protected family leave under the Family and Medical Leave Act (FMLA). Because the FMLA is a federal regulation, all states are required to participate. The FMLA does not provide paid leave, but it allows most workers up to 12 weeks of protected family leave for workers who experience one of the following events:
- The birth or adoption of a new child
- A qualifying health problem to care for
- A family member needing care for a health issue
Workers caring for a family member who is part of the armed forces may qualify for up to 26 weeks of protected FMLA leave rather than 12 weeks.
California employers should ensure that any unpaid or paid leave policy they create aligns with FMLA requirements for family leave and state requirements for paid sick time.
