Brief Summary of Minimum Wage Bill and Paid Overtime
The Governor has signed the minimum wage bill (AB456) and the former “Sick Pay” bill (SB312) now known as the “Paid Time Off” bill
AB456 increases the minimum wage by $0.75 a year until it reaches $12 an hour without health insurance and $11 with health insurance. The first incremental increase of $0.75 becomes effective on July 1, 2020 and raises the minimum wage to $8.00 an hour with health insurance and $9 an hour without health insurance. Increases of $0.75 will continue each July 1st until it reaches $11 and $12 respectively in 2024.
SB312 requires employers of more than 50 employees to offer at least 40 hours of paid overtime each year. The provisions of the bill will not apply to employers who already have contracts, policies and collective bargaining agreements that meet the PTO requirements. The bills sets an accrual rate of at least 0.1920 hours of paid time off per hour of work performed up to 40 hours of paid time annually. This will take into effect on January 1, 2020. The employee may use the time off for any reason and does not have to provide the employer a reason. The employee should notify the employer that he/she will be using time off but no time frame is specified for notification. The employer MAY limit the use of paid time off to 40 hours, set limits carry over to the next benefit year to 40 hours and set a minimum increment an employee can use at one time, not to exceed 4 hours.
NOTE: If the employer does not make these exceptions clear (as in an employee handbook), it may become unenforceable.