What Are California’s Paid Sick Leave Laws in 2025?

California was one of the first states to pass a statewide paid sick leave law, setting the tone for worker protections across the country. Over time, the law has expanded, most recently through Senate Bill 616, which increased the minimum leave from three days (24 hours) to five days (40 hours) per year, effective January 1, 2024.

California law provides a statewide baseline for paid sick leave, but some cities, such as San Francisco and Los Angeles, impose their own additional rules. For employers, especially those managing both in-state and out-of-state workers, staying compliant requires a careful understanding of the state requirements, the exceptions, and the interplay with local ordinances.

HR managers, finance teams, and business owners need clarity on key points such as coverage rules, accrual methods, permitted uses, and legal obligations. In this guide, we’ll walk through each of these and explain how Deel helps streamline compliance for employers.

Understanding paid sick leave in California

California’s paid sick leave law applies to all employers, regardless of their size. This ensures that workers across the state, including those in small businesses and startups, have a baseline level of protection when illness or family responsibilities arise.

The minimum requirement under current law is 40 hours (five days) of paid sick leave per year. This updated standard, which took effect on January 1, 2024, replaced the earlier requirement of at least 24 hours (three days).

Employers have flexibility in how they provide this leave, choosing between two main methods:

• Accrual method: Employees accrue sick leave at the rate of one hour for every 30 hours worked, from the moment they start working (though employers may set a 90-day waiting period before the leave can be used)
• Frontloading method: Employers may grant the full 40 hours at the start of each benefit year or on an employee’s anniversary date, which simplifies administration but requires providing the full entitlement upfront

Both methods are compliant under California law, and employers often choose based on what best fits their workforce and payroll systems. For example, companies with high-turnover, seasonal, or part-time employees may prefer the accrual method, while larger employers with more predictable workforces may find frontloading more straightforward.

Employers may place reasonable limits on accrual. Specifically, the law allows employers to cap total accrual at 80 hours (10 days). Even with a cap in place, employees must still have at least 40 hours available each year to meet the state’s minimum requirement.

Find out how paid sick leave laws differ by state.

Which employers must provide paid sick leave?

California’s sick leave law applies broadly. All employers operating in the state are required to provide paid sick leave. This obligation applies whether you run a small family-owned shop with one employee or a large corporation with thousands of workers.

The law also makes clear that coverage isn’t limited to full-time staff. Part-time, temporary, and seasonal employees are entitled to sick leave benefits as long as they meet the basic eligibility requirement of working at least 30 days in a year for the same employer in California. This ensures that even short-term or flexible work arrangements provide the same baseline protections.

Finally, employers who operate across multiple states must pay close attention. California’s rules apply specifically to employees working within the state, regardless of where the company is headquartered. For example, if a New York–based company has a handful of employees working remotely from California, those workers are covered by California’s sick leave law.

Who isn’t covered?

While the law is expansive, there are limited exemptions. These include:

• Independent contractors
• Employees covered by a valid collective bargaining agreement (CBA) that provides for paid sick leave or equivalent benefits
• Certain in-home supportive services (IHSS) providers may fall under different regulations
• Some airline employees work under separate federal or contractual arrangements

For employers, the key is ensuring worker classification is correct. Misclassifying employees as contractors can create not only compliance problems with sick leave but also tax, wage, and benefit liabilities.

See also: Comprehensive Guide to Payroll Taxes in California and Exempt vs. Non-Exempt Worker Status: What is the Difference?

When can sick leave be used?

Paid sick leave can be used for:

• An employee’s own illness, injury, or preventative care.
• The same purposes for a covered family member.
• Situations related to domestic violence, sexual assault, or stalking, recognizing the broader health and safety needs of workers.

Employers cannot require employees to find a replacement worker before using sick leave. This protection ensures that the law remains meaningful and accessible in practice.

See also: What is California’s Paid Family Leave (PFL)? A 2025 Guide

Usage limits based on employer policy

While California law guarantees employees a minimum amount of sick leave, employers may set certain limits on how that leave is used. The most common restriction is a waiting period: employees must typically complete 90 days of employment before they can begin using accrued sick leave.

Paid sick leave policy must be applied consistently across all eligible employees. Unequal or selective enforcement not only risks employee dissatisfaction but also opens the door to compliance violations. To avoid disputes, many employers put these rules in writing, either in an employee handbook or in separate policy documents, and ensure every worker understands their entitlements from day one.

Carryover and payout policies

California law distinguishes sick leave from vacation pay. Sick leave has unique carryover and payout rules:

• Carryover: Accrued but unused sick leave carries over to the next year, unless the employer frontloads the entire amount annually
• Payout: Employers are not required to pay out unused sick leave at termination, in contrast with vacation time, which is treated as wages and must be paid out
• Reinstatement: If an employee is rehired within 12 months, previously accrued sick leave must be reinstated

These provisions ensure employees retain access to their earned benefits without creating excessive payout obligations for employers.

Calculating pay for sick leave

The rate of pay for sick leave depends on whether the employee is exempt or non-exempt.

• Non-exempt employees (hourly workers) must be paid at their regular hourly rate, or if pay fluctuates, based on the average hourly rate over the past 90 days (total wages, excluding overtime, divided by total hours worked)
• Exempt employees (salaried workers) are paid in the same manner as other forms of paid leave

Employers must issue payment for sick leave no later than the employee’s next regular payday. Delays or miscalculations can lead to penalties.

Recordkeeping and enforcement

Employers must maintain detailed records to prove compliance with California’s paid sick leave law. This includes tracking both the accrual and usage of sick leave, which must appear either on employees’ wage statements or in a separate written document provided regularly.

These records must be kept for at least three years. Failure to properly maintain records can lead to penalties, including back pay for improperly denied sick leave, administrative fines, and even legal claims brought by employees.

Notice and posting requirements

Alongside recordkeeping, employers must also ensure employees know their rights. California law requires that the official Healthy Workplaces, Healthy Families Act notice be posted in a conspicuous location where employees can easily see it.

In addition, all new hires must receive a written notice of their sick leave rights at the time of onboarding. Failing to meet these requirements, even if the employer otherwise provides the correct leave benefits, can still lead to penalties.

Anti-retaliation and job protection

Finally, the law protects employees from any form of retaliation when they exercise their right to sick leave. Employers cannot fire, discipline, or otherwise penalize an employee for using accrued leave in accordance with the law.

Paid sick leave is also job-protected. This means that when employees return from leave, they must be reinstated to the same position. Any attempt to punish or disadvantage an employee for lawful use of sick leave can lead to serious legal and financial consequences, in addition to damaging trust in the workplace.

Local ordinances to watch for

In addition to the statewide requirements, several California cities and counties have adopted local paid sick leave ordinances that impose stricter rules. Notable jurisdictions include San Francisco, Los Angeles, Oakland, Berkeley, and San Diego, each of which has its own set of requirements layered on top of the state law.

These local rules may go further by mandating higher accrual caps, broader definitions of family members, or greater usage rights than the state standard. For example, some cities require employers to provide more than the five days guaranteed under state law, or allow employees to use their sick leave in smaller increments.

When state and local rules conflict, employers must follow whichever law provides the greater benefit to the employee.

Staying compliant with California’s paid sick leave law

Compliance with California’s paid sick leave law is not just about providing days off. It requires continuous review of policies, training of HR teams, and careful payroll administration.

This environment is particularly challenging for growing companies or multistate employers who need to balance California-specific requirements with federal obligations and other state laws.

That’s where Deel can help. By partnering with Deel PEO, companies gain:

• End-to-end sick leave support, including accrual and usage tracking, documentation, carryover management, and reinstatement when employees return
• Integrated payroll, HR, tax, and compliance at the federal, state, and local levels, with coverage of California’s specific sick leave requirements
• Access to certified professionals, licensed advisors, and dedicated HR business partners and payroll managers for expert guidance
• Exclusive Aetna International benefits plans for W-2 employees who travel abroad
• More than 60 domestic benefits options with Fortune 500-level coverage
• State-specific trainings, HR policies, and on-demand HR support
• Plus additional features to streamline compliance and HR operations

Sounds good? Request a demo with Deel today to see how we can help streamline your compliance processes.