The Los Angeles City Council has passed a paid sick leave ordinance, which is slated to go into effect July 1, 2016 in conjunction with the previously passed minimum wage ordinance. The sick leave ordinance will require employers in the City of Los Angeles to provide paid sick leave benefits that exceed the benefits already mandated by California state law.
Under the previously passed Los Angeles Minimum Wage Ordinance minimum wage rate hikes are set to increase at different intervals depending on the numbers of covered employees. Covered employees are those who perform at least two hours of work within the geographic boundaries of the City of Los Angeles within a particular week. For employers with 26 of more employees, the minimum wage rate will increase to $10.50 per hour beginning July 1, 2016. For employers with 25 or fewer employees, the minimum wage rate will not increase to $10.50 until July 1, 2017. Thereafter, the ordinance sets forth the following schedules for minimum wage increases:
For employers with 26 or more employees:
July 1, 2017: $12.00 per hour
July 1, 2018: $13.25 per hour
July 1, 2019: $14.25 per hour
July 1, 2020: $15.00 per hour
For employers with 25 or fewer employees:
July 1, 2018: $12.00 per hour
July 1, 2019: $13.25 per hour
July 1, 2020: $14.25 per hour
July 1, 2021: $15.00 per hour
Starting July 1, 2022, the minimum wage rate will increase every July 1st as determined by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) in the Los Angeles metropolitan area. These adjusted minimum wage rates will be released on the preceding February 1st.
In addition to raising the local minimum wage, the paid sick leave ordinance imposes more burdensome paid sick leave requirements on Los Angeles employers. The new paid sick time statute, as an amendment to the minimum wage ordinance, covers all employees who perform at least two hours of work within the geographic boundaries of the City of Los Angeles within a particular week. However, covered employees must be employed by the same employer for at least 30 days in order to be entitled to such benefits.
The new paid sick leave ordinance requires that employees be allowed to use 48 hours of paid sick leave per year and covered employees can begin using paid sick leave on July 1, 2016 or on the 90th day of employment.
There are two methods in which employers may account for the accrual of the requisite 48 hours. First, an employee can be provided with the full 48 hours of paid sick leave at the beginning of year, which could be on a calendar year, the employee’s anniversary, or other 12-month period. Alternatively as a second method, an employee could accrue one hour of paid sick leave for every 30 hours worked. However, these accruals are not without limit and an employer may establish a cap of maximum accrual hours at 72. Furthermore, no additional time off is required if the employer has a paid time off policy which permits up to 48 hours of leave annually for the purposes caring for him or herself as the employee, an employee’s family member or anyone of “close association similar to that of a family member.” Upon termination, employers are not required to pay the employee for paid sick leave hours that have been accrued, but unused. However, if a terminated employee is re-hired within one year, that employee is entitled to receive the accrued, but unused paid sick leave time.
While the requirements for utilizing such leave are to be for same purposes as that under the existing California Paid Sick Leave laws, the City of Los Angeles ordinance has expanded the definition of a family member to include, “any individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.” Additionally, this ordinance does not specify that employers may require two-hour increments for utilizing paid sick leave. While employers may require reasonable documentation from an employee utilizing paid sick leave, employers should remain cognizant and compliant with state laws when requiring such documentation.