Good Grief Charlie Brown!!! I am Sick over Sick Days!!
Yes, there is a new law effective July 1, 2015:
The California Legislative Counsel summarizes the Healthy Workplaces, Healthy Families Act of 2014 mandate as follows:
“An employee who, on or after July 1, 2015, works in California for 30 or more days within a year from the commencement of employment is entitled to paid sick days for prescribed purposes, to be accrued at a rate of no less than one hour for every 30 hours worked.”
Yet another law took effect July 1 that is poorly thought out, poorly regulated, and poorly understood, yet affects ALL anesthesia groups who have employees. This includes physician employees who work on productivity only.
I know no one is ready or even thinking about this, but this is what it means. As of July 1, 2015, EVERY employer MUST give 3 sick days per year to EVERY employee, and cannot penalize that employee financially or otherwise for taking those sick days.
Yes, really. If you are a total productivity based group the fact that if you do no cases and earn nothing on any specific day off is irrelevant. An employee of a corporation (like mine) is ENTITLED to THREE “sick days” and sick day pay per year, without financial penalty.
Now, even though that employee/shareholder makes NO MONEY doing NO CASES during their sick days, they must be paid. And no, – you cannot withhold their sick day payments from their productivity based earnings. That IS the new LAW.
The law is designed to protect employees who work regular days and hours (frequently on only an hourly wage) from working while sick in order to avoid not being paid. This leaves professionals who are compensated in a completely different manner in a quandary.
I have a personal conflict of interest in this matter. My group is a complete productivity only model. That is, if I am sick, disinterested, or unavailable for ANY reason – no problem: no cases, no compensation. And frankly my group is completely fine with that. I take a large amount of vacation and my fellow shareholders say “whatever – but no cases no pay!”
That is now partially over. If I “call in sick” I am entitled to my daily pay, based on a formula that does not penalize me for taking that day. BY LAW (read this carefully): I cannot be penalized, financially or otherwise, for taking this day. Yes, that is correct: if I take a sick day, everyone in my group must take the hit for me being sick. The penalty for skirting this issue is $4,000 per day per employee.
So what are we to do, those of us in a hard-working, total productivity model (other than joining the CSA to lobby the legislature to make an exception)?
We do the following:
1 – read Phillip Goldberg’s excellent legal interpretation about this new law.
2 – call your personal attorney and accountant and get in compliance for your group model.
3 – work with the CSA to lobby your state Senator and Assembly member to exempt total productivity professional groups from this law.
In the meantime, here is an extremely generalized approach (remember – call your attorney for specific advice):
First, if you only pay once per month after the 7th of the month (as do many groups) you are already in violation of state law which says you have to pay by the 7th of the month. This is not generally enforced but it is still relevant.
There are 520 hours of work per 90 days (assuming 13 weeks x 40 hours per week per the Labor Code section 246(b)(2.)) If you receive about $25,000 per month for the PRIOR 90 days, you are entitled to sick pay totaling $3,461.54.
Have your HR person or attorney or accountant help with specific calculations for your individual situation.
Once you arrive at a figure that corresponds to what your shareholder/employee is entitled to in sick pay, you must figure out how to account for that within the group, but you cannot penalize an individual for taking those sick days.
So the amount needs to be allocated across the entire group either equally (I can hear the screaming now) or on a pro-rated productivity basis (he who earns more pays more – in which case my cousin in NYC can hear the screaming…)
This across the board rating system is frankly awful. But it is the safest and most legally protected way to comply according to Mr. Goldberg. In the meantime, while we are considering working towards a legislative fix, do NOT ignore this newly enacted law.
The point of this article is to inform you and help you understand this legal change. It will affect us all. We have an amazing CSA attorney who has done his best to explain the implications of the law. Pay attention to what he and I have written about this and act on it.
I know that many of us want to maintain our current practice model. Many challenges face us and this new law does not help us better manage our practices. Now that we are aware of this law and its implications we have a template for how to deal with it.
And of course, feel free to contact me personally. I value your opinion and viewpoint on all these issues. The more I hear from individual CSA members the better I can represent you to our legislators.