Last year many California employers were forced to adapt their traditional 90-day probationary periods to comport with a state-specific requirement imposing a maximum eligibility waiting period for benefits of 60 days. This created a confusing list of choices for California employers who often like to provide benefits as a “prize” for passing a probationary period. I blogged about this issue last year.
The good news is that Senate Bill 1034 becomes effective January 1, 2015 and repeals the 60-day waiting period limit previously imposed on certain health insurance plans in California. Now employers can go back to the 90-day probationary period with benefits as a reward to employees who “pass” probation. This comes just in time for the year-end employee handbook updates.
That said, terminations during a probationary period can lead to litigation. Therefore, it is still important to hire carefully, to evaluate new hires promptly, to document ineffective performance or misconduct even for employees in the first 90 days, and to terminate quickly when justified.