Safe Harbor Payments & Look-Back Sick Pay Calculations

If you are using the Look-Back method for sick pay hourly rate calculations and entered a new Wage Code for the Safe Harbor payments, you should double-check the setting for “Include in Regular Rate of Pay Calculations” on the Wage Type setup.

If the box is checked the software will include Safe Harbor wages into the look-back rate calculation, thus increasing the average hourly rate for any employees that request sick pay within 90 days of receiving a Safe Harbor payment.

The “Include in Regular Rate of Pay Calculation” setting should be unchecked:

If you’re not sure what method you are using for sick pay calculations, there’s no harm in changing the setting any way.

 

Billing growers for sick pay

The new Sick Pay Leave Act for California adds a new overhead cost that farm labor contractors will need to pass on to growers.  In general, there are three approaches that we have talked to our customers about using:

1. Estimate sick pay that will be paid out and increase your commission percentage rate to cover these costs.
2. Bill growers for sick pay accrued by employees when the sick pay is earned.
3. Bill growers for sick pay paid to employees when the sick pay is taken.

All of these approaches have their pros and cons.  If at all possible, it is best to settle on one method for billing for sick pay for all of your growers.  This article will discuss the various methods and planned features to support them.

Sick Pay Hourly Rate Calculation Update

An amendment to the California Paid Sick Leave law provides an alternative option for calculating the sick pay hourly rate for variable pay rate employees. Employers may now use the employees weekly “regular rate of pay.” This weighted average calculation takes the total wages paid to the employee divided by the hours worked, to calculate the employees average hourly rate. This rate is then applied to the sick pay hours taken.

Either this method or the 90 day average rate method may be used.  A longer period may be desired in operations that have a short harvest season and therefor some weeks the employees hourly rate may be drastically higher than other weeks in the 90 day window.  Operations that pay bonuses or commissions on certain weeks may also prefer a longer average calculation method.  However, one method should be established and documented for employees.

Update for new sick pay features available

An update is now available for The Farmer’s Office and The Labor Contractor’s Office that includes the initial set of new features for handling the new sick pay law for California that goes into effect July 1.  Use the Check for Updates option on the menu to download the update.

Click here for a PDF with instructions on using the new features.

To support the new features, a number of updates must be made to several of the payroll database tables, including the employee table and the payroll check files. These update may take some time to complete.  We recommend that you plan to install the update after normal operating hours and start the new version of the program on your server so that these database updates can be completed as quickly as possible without disrupting your normal operations.

 

Sick Pay Leave Act Program Enhancements, Revised

This is an update to the previous article about the new California Sick Pay Leave Act and the implementation in Datatech Payroll software. We have some updates in the programming options and best practices to meet the requirements of the legislation.

Our disclaimer regarding the information in this article, manuals, help files and software:

•  Nothing should be interpreted as or relied on as legal advice.
•  Consult a qualified attorney about any matter of legal significance to you.

We also strongly recommend the following resources to help with your sick pay implementation:

•  http://www.dir.ca.gov/dlse/Paid_Sick_Leave.htm (Frequently Asked Questions)
•  California Chamber of Commerce for webinar, employee handbooks, help developing a written sick pay policy