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Primary Care Providers Win Challenge of CMS Interpretation of Enhanced Payment Law

With the help and support of the Tennessee Medical Association, 21 Tennessee physicians of underserved communities joined together and retained Bass, Berry & Sims to file suit against the Centers for Medicare & Medicaid Services to stop improper collection efforts. Our team, led by David King, was successful in halting efforts to recoup TennCare payments that were used legitimately to expand services in communities that needed them. Read more

Tennessee Medical Association & Bass, Berry & Sims

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Healthcare Private Equity Compliance Checklist

The complex and ever-changing healthcare regulatory and enforcement environment, including increased focus on the role of private equity firms in their portfolio companies, make compliance a top priority for private equity firms investing in healthcare companies. The best way to limit your exposure as a private equity firm is to avoid a compliance misstep in the first place. Additionally, an effective and robust compliance program for your portfolio healthcare company makes it much more attractive to potential buyers and helps you avoid an unexpected and costly investigation or valuation hit down the road. Download the Healthcare Private Equity Compliance Checklist to assess whether your portfolio company's compliance program is up-to-date.

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Labor Talk Blog: California Becomes Second State to Enact Paid Sick Leave Law


September 16, 2014

On September 10, 2014, California Governor Jerry Brown signed into law a bill providing most employees in California the right to earn up to three paid sick days per year. Known as the Healthy Workplaces, Healthy Families Act of 2014, the legislation takes effect July 1, 2015. California is one of only two states, with Connecticut, that mandates paid sick leave for employees.

Coverage under the Act is far reaching. There is no exemption for small employers, and both public and private employers are subject to the Act's requirements. Employees who work in California for at least 30 days in a year, calculated from the date they begin employment, must be permitted to accrue paid sick leave in accordance with the Act. And the days may be used for diagnosis, care or treatment of an existing health condition or preventive care for the employee or the employee's family member, which is defined to include, parents, children, spouses and registered domestic partners, grandparents, grandchildren and siblings. Sick leave also may be used to address certain issues related to domestic violence, sexual assault and stalking.

How does it work?

  • Employees accrue paid sick leave at a rate of at least one hour earned for every 30 hours worked.
    • Accrual begins the later of July 1, 2015 or the date of employment.
    • Exempt employees are deemed to work 40 hours per week if their normal work week is 40 hours or more.
    • Employees must be permitted to carry over unused sick days to the following year.
    • But employers may cap the total accrued at six days (48 hours) and may limit employees to the use of three days of paid sick leave in each year of employment.
    • Alternatively, employers may grant employees three days (or 24 hours) sick leave at the beginning of each year, which may permit the employer to avoid the carry-over requirement.
    • Employers whose paid time off or sick leave policies comply with the requirements of the Act are not required to provide additional paid sick leave.
    • Employees may begin using accrued sick leave on the 90th day of employment.
    • Employers may determine in what increments sick leave may be taken, but the minimum increment may not exceed two hours.
    • Employees must be compensated at their hourly wage.
    • Employees must receive written notice with their wages that sets forth the total amount of sick leave available to the employee.
    • Employees may be required to provide reasonable advance notice of a foreseeable need for leave. If a need for leave is unforeseeable, employees must provide notice as soon as practicable.
    • Employees may not be required, as a condition of leave, to find their own replacement workers.
    • Employers are not required to pay out accrued but unused sick leave upon an employee's separation of employment (whether voluntary or involuntary).

The Act exempts certain employees from coverage. Employees covered by a valid collective bargaining agreement that meets certain requirements under the Act are exempted, as well as flight deck and cabin crew personnel. But the most controversial exemption has proven to be the carve-out for home health aides whose work falls within California's statutorily-defined categories of in-home supportive services. In the wake of the inclusion of the exemption, several labor unions, such as the Service Employees International Union, pulled their support for the bill before it became law.

Retaliation or discrimination against employees who use or request to use sick leave in accordance with the Act is prohibited. The Act provides for a rebuttable presumption of unlawful retaliation if an employer denies an employee the right to use accrued sick days, discharges, threatens to discharge, demotes, suspends or in any manner discriminates against an employee within 30 days of the employee: filing a complaint with the Labor Commissioner or alleging a violation of the Act; cooperating with an investigation or prosecution of an alleged violation of the Act; or opposing a policy, practice or act that is prohibited by the Act. Violations of the Act can result in administrative fines and civil penalties, as well as attorneys' fees, costs and interest – though there is no provision for a private right of action.

Issues to Consider:

  • The statute defines coverage based on where employees work, not where they live or where their employers are located. Be aware that temporary assignments of employees to California locations for sufficient duration could result in a legal obligation to provide benefits in accordance with the Act.
  • The law does not preempt or limit local ordinances that may have additional paid sick leave requirements, such as the one enacted by San Francisco or the one proposed in San Diego. The Act functions as a floor for paid sick leave rather than a ceiling.
  • There are posting and recordkeeping requirements.

The delayed implementation date provides time for employers with employees working in California to review their leave policies and to determine whether those policies comply with the requirements of the Act. If not, employers must decide whether to redesign their leave policies to be "California-compliant" or to provide the required benefits to those employees covered under the Act.

If you would like assistance in interpreting the requirements of the Act or in evaluating and drafting leave policies, contact one of the attorneys in Bass, Berry & Sims' Labor & Employment Practice Group.

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