Los Angeles Expands Sick Pay Obligations Beyond Current State Law Requirements
Action Item: On June 2, 2016, Mayor Garcetti signed Los Angeles’ new Minimum Wage Ordinance (“the Los Angeles Ordinance”), which effectively affords employees who work in the City of Los Angeles twice the amount of paid sick leave that is currently provided under California state law.
Beginning July 1, 2016, Los Angeles employers, regardless of size, must provide sick leave benefits that are double the current sick leave requirements. Also beginning on July 1, 2016, Los Angeles employers with 26 or more employees must pay a minimum wage of $10.50 per hour. For small businesses with 25 or fewer employees, this minimum wage increase does not go into effect until July 1, 2017.
The Los Angeles Ordinance essentially mirrors the requirements of California’s state sick leave law (The Healthy Workplace, Healthy Families Act of 2014); however, there are a few notable differences. California’s Healthy Workplace, Healthy Families Act of 2014 mandates that employers provide a minimum of 24 hours of paid sick leave per year. The Los Angeles Ordinance increases that requirement to 48 hours per year. Under California state law, employees may accrue up to 48 hours of paid sick leave, and, with few exceptions, the Los Angeles Ordinance caps total accrual at72 hours.
Additional differences include:
- Employees subject to the Los Angeles Ordinance may take leave for themselves, a family member, and now, “any individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.” The Los Angeles Ordinance does not define “affinity,” but it is clearly more expansive than California’s Healthy Workplace, Healthy Families Act of 2014.
- Unlike The Healthy Workplace, Healthy Families Act, the Los Angeles Ordinance authorizes employers to require their employees to provide “reasonable documentation” of an absence from work for which paid sick leave is or will be used.
Existing PTO Policies and Accrual of Paid Time Off
- Under state law, an employer may satisfy its paid sick leave obligations through its existing PTO policy so long as the PTO policy provides at least 24 hours of paid leave by the 120th calendar day of employment.
- The Los Angeles Ordinance is silent on this issue, and only provides that the employer may maintain its existing PTO policy if it offers at least 48 hours of paid time off per year. To clarify the “accrual” of paid time off, it is likely that Los Angeles will adopt administrative guidelines which authorize an employer to utilize a PTO accrual method that meets the minimum requirements of the Los Angeles Ordinance—(1) providing the entire 48 hours to an employee at the beginning of each year of employment, calendar year, or 12-month period; or (2) by providing an employee one hour of sick leave per every 30 hours worked.
Of note, an employer who violates the Los Angeles Ordinance may be held liable for restitution, penalties, fines, and other legal or equitable damages.
Employers who have employees in the City of Los Angeles should review their paid sick leave policies to ensure they are meeting the newly mandated thresholds.
2016 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reprint. Notice: The purpose of this update is to identify select developments that may be of interest to readers. The information contained herein is abridged and summarized from various sources, the accuracy and completeness of which cannot be assured. This update should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel.