California Increases Paid Sick Leave to Five Days Annually

What Changed

Senate Bill 616 (SB 616) amends California's Healthy Workplaces, Healthy Families Act to significantly expand paid sick leave entitlements. The key changes include:

• Front-loaded leave increases from 3 days to 5 days (or 40 hours) per year

• Maximum accrual increases from 6 days to 10 days (or 80 hours)

• Minimum annual use increases from 24 hours to 40 hours per year

Employers who use accrual-based systems must now allow employees to accrue up to 80 hours and use at least 40 hours per year. Employers who front-load leave must provide at least 40 hours at the beginning of each year or 12-month period.

Who Is Affected

SB 616 applies to nearly all California employees who work at least 30 days within a year for the same employer. This includes full-time, part-time, per diem, and temporary workers. Some narrow exemptions exist for certain construction workers, air carrier flight crew, and employees covered by qualifying collective bargaining agreements.

Where It Applies

California statewide. Employers with employees performing work in California must comply, regardless of the employer's home state. Note that some California cities (San Francisco, Los Angeles, Oakland, and others) have local sick leave ordinances that may provide greater benefits; employers must comply with whichever law is more generous.

When It Takes Effect

January 1, 2024. Employers must have updated policies, notices, and tracking systems in place by this date. The California Division of Labor Standards Enforcement (DLSE) has released an updated paid sick leave poster and Notice to Employee form reflecting the new requirements.

Why It Matters

California's paid sick leave law was already among the most generous in the nation, and SB 616 raises the bar further. Non-compliance carries significant risk: employers who deny sick leave or retaliate against employees face penalties of $250 per employee per violation, plus potential liquidated damages, reinstatement, and attorney's fees. The law also requires updated wage statement information — failure to provide accurate sick leave balances on pay stubs is a separate violation under Labor Code Section 226.

This change also affects employers who use "unlimited PTO" policies, as they must still ensure employees can take at least 40 hours of sick leave annually.

The Humareso Take

This is one of the most impactful California employment law changes heading into 2024. If you have California employees, your handbook, your notices, and your payroll system all need updating. We have seen too many employers assume their existing PTO policies cover them — they often do not, especially on accrual caps and carryover rules. Get this one buttoned up before year-end. Reach out to your Humareso team if you need help auditing your current sick leave policy.

Recommended Action Steps

1. Update your employee handbook to reflect the new 5-day/40-hour minimum and 10-day/80-hour accrual cap for paid sick leave.

2. Post the updated California paid sick leave poster in a conspicuous location accessible to all employees by January 1, 2024.

3. Provide updated Notice to Employee forms (DLSE form) to all non-exempt employees reflecting the new sick leave entitlements.

4. Audit your payroll and leave tracking systems to ensure accurate accrual, usage, and carryover calculations under the new thresholds.

5. Review wage statements to confirm paid sick leave balances are displayed accurately on each pay stub.

6. Contact your Humareso representative for a compliance review of your California sick leave policies and related local ordinance obligations.