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Setting up Sick Leave - California (Payroll)
Setting up Sick Leave - California (Payroll)

A guide to setting up sick leave for California Payroll

Updated over a week ago

How To Set Up California Paid Sick Leave Policy For Payroll

California employers are required to provide a sick leave policy that allows at least 24 hours or three days of paid sick time each year to their workers. Paid Sick Leave in California

In order to be compliant with California Sick Leave law, not only do you have to have the policy set up correctly in the system, the balance must also show on every pay statement. This guide will show you how to:

  • Understand the Leave rules

    • California Sick Leave law allows for 1 hour of sick leave to accrue for every 30 hours worked. Which provides an accrual ratio of .033 hours of sick leave earned for every hour worked up to a 24 hour maximum accrual requirement each year.

    • For more about California Sick Leave, please see this FAQ Site.

  • Configure New Earning Code to specify on Paystub

  • Configure Rule in Compliance

  • Assign to Staff

  • View pay statement for verification

Configure New Earning Code to specify on Paystub

Select Payroll Settings from top ribbon

Click Earning Rates→ New→ Complete the fields and click CREATE at the bottom

Configure Rule in Compliance

This process may also be repeated for other leave types but this example is specific to California Sick Leave.

Login to your account.

From the top ribbon, navigate to and click on the Compliance link under the TIME & SCHEDULES section.

Once there, find the Time Off Types and click Manage

Find the New time off type button in the top right corner and click to open

From here follow the menu along the way and complete each section as shown below.

  • Name the Time Off Type

  • Add the Export Name (select your newly created earning code)

  • If your organization is located in only California, or the jurisdiction you happen to be setting up for, you should select all staff.

  • Otherwise, for organizations that have staff in multiple states and or jurisdictions, you can use payroll tags to assign this leave type. In this example, the “Categorised staff” would be based on a California payroll tag.

Set each of these for the appropriate mark.

Here you will set up the accrual rate, as mentioned above for California, it is .033 as of this article.

  • It is suggested to leave the slider in the off position to prevent additional accrual to occur when using this leave.

Select the Advanced Settings that are right for your organization. Hovering over the blue question marks will give more insight into the function of each setting.

Save your work by ticking the green “Create Time Off type” before exiting.

To ensure you have set up your Time Off Types, look for the one you just created on the menu.

With your leave type set up, you will want to revisit the top bar ribbon and select “Payroll Settings” under the Payroll tag the top.

Configure in Payroll

When you open Payroll Settings, you will need to access two separate areas of the Payroll Configuration menu. Time Off Types and Staff.

First, select Time Off Types (click the View button)

Click NEW

Here you will need to:

  • Name the Time Off Type (this must be the exact same as the name you set up in the prior step in compliance)

  • Select the Payroll account (wage category)

  • Tick Accrues leave

  • Click Create

Verify correct set up.

Assign to Staff

From here, you will need to assign this Time Off Type to each employee in the Payroll Profile one time. Navigate back to the Payroll Settings button on the top ribbon and click View under Staff.

Find the applicable employee and click their name. Which opens the Config > Staff menu

Find Leave Balances and click ADD to the employee record

Select the proper type and add any opening balance. (You will only need to do this once for each employee).

View Pay Statement for verification

Finally, after you have imported your payroll data, you will want to verify accruals are calculated by checking the employee pay statement.

In the sample below, the total hours worked are 69.6667. This amount is multiplied by the accrual rate of .033 for Hours Accrued amount of 2.299.

Congratulations! You have successfully set up your organization’s California Sick Leave Policy.

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