California’s sick leave carryover rules for 2025 say you need to let employees keep unused sick days for the next year.
The exact limits and details depend on how you handle accrual.
Knowing these rules makes it easier to stay compliant and manage your team without headaches.
Employees get to keep unused sick leave from year to year, but you can cap how much they build up and how much they use each year to keep things running smoothly. California sets minimums, but you’ve got some wiggle room to design your own policy as long as you stay within those standards.
You need a sick leave policy that works for your business and respects employees’ rights.
That means figuring out when carryover applies, how much sick time can pile up, and what records you need to keep.
Key Takeaways
- California says you have to allow sick leave carryover, but you can set reasonable limits on how much employees can save up and use each year
- You need to track accrued sick time and give employees the right paperwork
- Staying compliant means knowing the state minimums and where you have flexibility in your policy
Understanding California Sick Leave Carryover Rules 2025
California makes you let employees carry over sick time they didn’t use, but you can set a cap on how much they save up.
You’ll need to track your accrual method, keep good records, and know how these rules work with different types of paid time off.
Annual Accrual Limits and Carryover Provisions
California law says you have to give at least 24 hours or three days of paid sick leave each year.
If employees don’t use it, they can roll it over to the next year.
You can limit how much sick leave someone can build up, with a max cap of 48 hours or six days.
Key Carryover Rules:
- Employees keep unused sick leave at year’s end
- You can cap total accumulation at 48 hours
- Carryover happens automatically on your set anniversary date
- You don’t have to cash out unused sick time
You’ve got two main options here.
You can let employees carry over their hours up to the 48-hour cap, or you can just give everyone a fresh 24-hour chunk each year instead of tracking accrual.
The carryover rule ties to your company’s benefit year, which could be the calendar year or your own fiscal year.
Eligibility and Accrual Methods for Sick Leave
Employees qualify for sick leave after working 30 days.
They can start using their accrued time after 90 days on the job.
Accrual Methods You Can Use:
- One hour for every 30 hours worked
- Give the full 24-hour allotment up front
- Use another accrual schedule as long as it meets the minimums
Both part-time and full-time employees earn sick leave.
Temp and seasonal workers also qualify if they work enough days.
Anyone who works at least 30 days in California gets sick leave, even if they’re mostly based elsewhere but work here sometimes.
Quick Calculation Examples:
- 40 hours a week? That’s 1.33 hours of sick leave per week.
- 20 hours a week? You’re looking at 0.67 hours per week.
Your accrual method changes how carryover works.
If you give sick leave up front, you don’t have to worry about carryover math.
Rules for Unused Paid Time Off
Unused paid time off has its own set of rules.
You have to pay out unused vacation time when someone leaves your company.
Sick leave and vacation are totally different.
You can’t use your PTO policy to cut back required sick leave.
Important Distinctions:
- Sick leave: No payout required if someone leaves
- Vacation: You have to pay out the unused balance
- PTO banks: If they include vacation, you need to pay out what’s left when the person leaves
You can’t take away accrued sick leave as discipline.
Employees keep their sick time even if they’re on unpaid leave.
Some companies use a combined PTO policy.
If your PTO covers vacation, you have to pay out the unused hours when someone quits or gets fired.
Reporting Requirements: You don’t need to show unused sick leave balances on the W-2.
But if a local ordinance requires it, you might have to report paid sick leave used during the year.
Employer Recordkeeping and Documentation
You need to keep records of sick leave accrual and use for at least three years.
These records come in handy for audits or if employees ask for proof.
You’ll need to keep track of:
- Hours worked by each employee
- Sick leave accrued and used
- Dates employees took sick leave
- Employee acknowledgment of your sick leave policy
Make sure your payroll system tracks sick leave separately from other benefits.
Lots of employers just put sick leave balances right on pay stubs so everyone’s in the loop.
Give employees written notice of their sick leave rights.
Put this notice up in the workplace and hand it out to new hires.
Best Practices:
- Use electronic tracking if you can
- Keep backup records in case something goes wrong
- Train managers on how to keep records
- Check your records regularly to catch mistakes
Form W-2 and W-3 might include sick leave payments if your local area asks for it.
The federal government doesn’t require separate sick leave reporting.
It’s smart to audit your records once a year.
That way, you can fix any issues before they turn into bigger problems.
Compliance and Employer Responsibilities
California employers need to keep up with payroll tax accounts, workplace posters, workers’ compensation, and employee reimbursements.
These requirements go hand-in-hand with sick leave rules to keep your business safe from legal trouble.
State Employment Tax Returns and EIN Requirements
You’ll need an EIN (Employer Identification Number) from the IRS before you hire anyone.
It’s a nine-digit number that identifies your business for tax stuff.
Register your state tax account with the California Employment Development Department for unemployment and disability insurance taxes.
Sign up within 15 days after you pay $100 or more in wages during any quarter.
If you pay household workers, use Schedule H with your Form 1040 to report employment taxes.
You’ll also need to make quarterly 1040-ES payments if you owe at least $1,000.
State employment tax returns are due every quarter, by the last day of the month after the quarter ends.
Miss the deadline and you’re looking at a $59 penalty per late return.
Keep payroll records for at least four years.
This means wage statements, time records, and tax withholding info.
Required Employment Posters and Legal Notices
California law says you have to hang up specific employment posters where employees can see them.
These cover wage laws, safety, and discrimination policies.
Posters need to be in English and any language spoken by at least 10% of your workers.
For remote employees, give them digital access.
Some required posters:
- Minimum wage info
- Paid sick leave rights
- Workers’ comp coverage
- Safety rules
- Anti-discrimination policies
Update posters right away if laws change.
The state gives free updates through the Department of Industrial Relations website.
Hang posters in break rooms, near time clocks, or anywhere employees gather.
Every location needs its own full set.
Workers’ Compensation Insurance and Tax Forms
Workers’ comp insurance is required for all California employers, even if you only have one employee.
Get coverage before your first hire starts.
Your insurance company gives you the required workers’ comp poster.
It needs your insurer’s name and policy number.
Independent contractors usually don’t need coverage.
But if you misclassify employees as contractors, you could face big penalties and have to pay back premiums.
Who needs coverage:
- All employees, including part-time and temps
- Business owners (it’s optional, but probably a good idea)
- Family members on payroll
Report workplace injuries to your insurer within 24 hours.
For serious injuries, file Form 5020 with the state too.
Health Reimbursement Arrangements and Mileage Reimbursement
Individual Coverage Health Reimbursement Arrangements (ICHRAs) let you pay employees back for their individual health insurance premiums.
You set the monthly allowance based on their job class and family size.
Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs) are for businesses with fewer than 50 employees.
The 2025 limits are $6,150 for individuals and $12,450 for families.
You can’t offer both group health insurance and HRAs to the same group of employees. SHOP (Small Business Health Options Program) is another way to get group coverage.
Mileage reimbursement uses the IRS standard rate, which is 70 cents per mile for 2025.
You can pay less, but if you go over, the extra becomes taxable income.
Track business mileage with dates, where you went, and why.
Employees should turn in mileage reports every month to get paid back on time.
Frequently Asked Questions
California’s sick leave laws spell out how you carry over unused time and what happens to it when someone leaves.
The state sets limits on how much sick leave you can roll over and when employers have to pay for unused days.
What are the carryover provisions for sick leave in California as of 2025?
You can carry over up to 48 hours of unused sick leave from one year to the next in California.
This happens automatically unless your employer gives you a more generous policy.
Employers can limit how much sick leave you use in a year to 24 hours.
Even if you roll over hours, they can keep that annual usage limit.
If your company offers unlimited sick leave, the carryover rules don’t apply.
Are California employees compensated for unused sick days upon termination?
You don’t get paid for unused sick leave if you quit or get fired in California.
Sick leave doesn’t work like vacation time, which does have to be paid out.
Employers don’t have to cash out sick hours, no matter why you’re leaving.
The only way you’d get paid for unused sick time is if your company’s written policy says so, and that’s pretty rare.
What limitations exist on an employer’s ability to refuse a sick day request?
Employers can’t deny sick leave for approved reasons under California law.
These include your own illness, caring for family, or domestic violence situations.
You should give reasonable notice if you can.
In an emergency, you can ask for sick leave last minute.
Employers can’t ask for detailed medical info.
They can only ask if the absence qualifies for sick leave.
Retaliation isn’t allowed.
Employers can’t fire, demote, or punish you for using your sick time.
How does California distinguish between paid time off (PTO) and sick leave in 2025?
PTO combines vacation, personal time, and sick leave into one bucket.
Sick leave is a separate benefit just for health-related absences.
If your employer uses PTO, they still have to meet California’s sick leave minimums.
You must get at least 24 hours a year to use for sick time.
PTO gets paid out when you leave your job, but sick leave doesn’t—unless it’s part of a PTO system.
Your employer should make it clear whether you get separate sick leave or a combined PTO policy.
The rules aren’t the same for each.
What updates to employment laws in California for 2025 affect sick leave policies?
California’s main sick leave law stays the same for 2025.
You still earn one hour of sick leave for every 30 hours worked.
Some cities and counties have their own sick leave laws, which might give more hours or let employees earn sick time faster.
Check your local rules to see if they require more than the state minimum.
How many days of sick leave are employees entitled to in California in the current year?
In California, you earn at least 24 hours of sick leave each year.
For most people, that’s about three full work days.
Some employers just give you all 24 hours at the start of the year.
Others let you earn one hour for every 30 hours you work.
A lot of companies actually offer more than the state minimum.
You can usually find the details in your employee handbook.
Part-time workers earn sick leave at the same rate as full-time workers.
It all depends on how many hours you end up working.