June 15, 2016
Compliance Matters
SM                                                                                                 Newsletter

CITY OF LOS ANGELES AMENDS LIVING WAGE ORDINANCE TO ADD NEW PAID SICK LEAVE BENEFITS

    
      
The City of Los Angeles Minimum Wage Ordinance ("Ordinance") was recently amended to include mandatory paid sick leave benefits. The paid sick leave is similar to the California Healthy Workplace, Healthy Families Act (HWHFA), but contains a number of differences and provides a significantly greater sick leave benefit to employees. Additionally, for some employers, compliance begins on July 1, 2016. The following FAQ highlights the key provisions of the Ordinance.

Q: What Employers are covered under the new law

A: All employers within the City of Los Angeles are covered under the new law. Additionally, employers located outside the City of Los Angeles also may be covered if they have employees performing work in the City of Los Angeles and the employee "[i]n a particular week performs at least two hours of work within the geographical boundaries of the City for an Employer." Employers with 26 or more employees must comply with the new paid sick leave requirement by July 1, 2016. The Ordinance is ambiguous as to whether Employers with 25 or fewer employees must comply by July 1, 2016, or whether compliance is delayed until July 1, 2017, when the new minimum wage rates take effect for smaller employers. Our office is currently seeking clarification from the City Bureau of Contract Administration as to the effective date for smaller employers.

Q: Are Any Employees Exempt from the New Law

A: No. Unlike the HWHFA, which provides exemptions for employees covered by certain collective bargaining agreements, certain providers of in-home supportive services and certain individuals employed by an air carrier as a flight deck or cabin crew member, the Ordinance does not contain any similar or additional exemptions from the paid sick leave requirement.

Q: Who is Eligible for Paid Sick Leave?

A: The new law provides that any employee who works for 30 or more days within a year is eligible to receive paid sick leave, which is the same as the HWHFA. Full-time, part-time, temporary and on-call employees are eligible to receive paid sick leave. An employee is defined as an individual who "[i]n a particular week performs at least two hours of work within the geographical boundaries of the City for an Employer."

Q: What Benefits are Granted Under the New Law

A: An employee must accrue paid sick days at the rate of one hour per every 30 hours worked, beginning at the commencement of employment or July 1, 2016, whichever is later. Alternatively, the employer may provide the entire 48 hours to an employee on July 1, 2016 and thereafter at the beginning of each 12-month period ("front load"). The Ordinance does not permit any other alternative accrual method, as does the HWHFA.

Q: When Can the Employee Begin to Use Accrued Sick Pay?

A: Accrual begins on the first day of employment, but the employer can prohibit the employee from using any earned paid sick leave until the 90th day of employment, just as permitted under the HWHFA.

Q: Does Paid Sick Leave Carry Over from Year to Year?

A: Yes. Under the new leave provision, paid sick leave must carry over from year to year, but an employer may limit the employee's total accrual of paid sick leave to 72 hours (i.e., 9 days) per year. In contrast, the HWHFA permits employers to cap the total accrual of paid sick leave at 48 hours.  Additionally, unlike the HWHFA, paid sick leave must carry over even if the employer elects to use the front-load method described above. Therefore, an employer may not have a use-it or lose-it paid sick leave policy, nor "cash-out" paid sick leave each year.

Q: Can the Employer Limit How Many Days Are Used Each Year?

A: Yes. An employer may limit an employee's use of paid sick days to 48 hours in each 12-month period.  In contrast, the HWHFA permits employers to limit usage to 24 hours in each 12-month period.

Q: Is the Employer Required to Pay Out Unused Sick Leave Upon Separation of Employment?

A: No.  However, the Ordinance is identical to the HWHFA in that if the employee is rehired within one year from the date of separation, previously unused and accrued sick days must be reinstated.

Q: What is the Employer Already Has a Paid Time Off or Paid Sick Leave Policy?

A: An employer is not required to provide additional paid sick days under the Ordinance if the employer "has a paid leave or paid time off policy or provides payment for compensated time off, that is equal to or no less than 48 hours."

Q: For What Reasons May An Employee Use Paid Sick Leave?

A: Upon an oral or written request of an employee, an employee may use paid sick days for all of the reasons permitted by the HWHFA. However, in addition to permitting the leave to be used for "family members" as defined by the HWHFA, the Ordinance also permits paid sick leave to be used for "any individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship."

Q: May an Employer Ask for Documentation that Sick Pay Was for Used for a Permitted Purpose?

A: Yes. The Ordinance states that an employer may require an employee to provide reasonable documentation of an absence from work for which paid sick leave is or will be used. However, recall that under the HWHFA, there is no express provision in the law that permits employers to require documentation that sick time has been used for a covered purpose. As such, under the HWHFA, an employer should not request documentation unless documentation can be required for another purpose, such as leave under the California Family Rights Act ("CFRA"), Pregnancy Disability Leave ("PDL"), Family Medical Leave Act ("FMLA") or similar leave laws.

Q: May an Employer Set a Minimum Increment of Sick Leave that Can Be Used?

A: The Ordinance does not mandate any minimum increment of sick leave that can be used. However, the HWHFA states that an employer may set a reasonable minimum increment, not to exceed two hours, for the use of paid sick leave.

Q: Are there any Anti-Retaliation Provisions?

A: Yes. The Ordinance states that "[n]o Employer shall discharge, reduce in compensation or otherwise discriminate against any Employee for opposing any practice proscribed by this article, for requesting to use paid sick leave or actually using paid sick leave, for participating in proceedings related to this article, for seeking to enforce his or her rights under this article by any lawful means, or for otherwise asserting rights under this article."

Compliance with the Ordinance, as well as California's HWHFA, is extremely difficult to navigate. If you need assistance or if you have any questions about the contents of this article, please contact any member of the Firm. We can be reached at (818) 508-3700 or visit us online at  www.brgslaw.com.
 
Sincerely,
Richard Rosenberg
Katherine Hren
Ballard Rosenberg Golper & Savitt, LLP



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