My husband just recently started a job in California, he has several employees that will come in for 30 min or an hour and then leave to go home sick when clearly they are not sick. His HR person told him that by California law since they came in to work and THEN went home sick they can't be charged their sick time. The company has to pay them regular pay. This seems insane and opens a huge door for employees to abuse this and it has come to this that the employees think they are untouchable when it comes to this area.

I have tried researching the labor laws and can't find this anywhere. Can anyone shed some light on this?

That would be because there are no laws that state this. If an employee is exempt and does not have leave time available, they must still be paid for the entire day. However, leave may be charged.

My question to him is why is he letting them go home if they aren't sick? If one of my direct reports came up to me and asked to go home after working a half hour and said they were sick and they didn't at al appear to be so, I'd tell them no. Me thinks they are pushing to see how much they can get away with now that there is a new manager.

CA has a reporting time law, but that only applies when the employer is the one sending the employees home. Not the case here. The Exempt Salaried exception has been mentioned, and that is federal law applicable everywhere.

Past that, I agree with the other answer. You could perhaps tell the employee to not return to work without a doctor's excuse.

http://www.dir.ca.gov/dlse/FAQ_ReportingTimePay.htm

Just to understand this better. If an exempt employee is out of sick time, personal time, and vacation, we can't dock them? or is this only for sick time?

You may dock leave but not pay unless the time falls under FMLA. If and only if the time oiff qualifies as FMLA may you dock an exempt employee's pay.