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City of Los Angeles Enacts Paid Sick Leave Law Providing Twice the Annual Sick Leave Required by California’s State Law

January 23, 2017

The City of Los Angeles has passed two laws (Ordinance Nos. 184319 and 184320) (the “LA Sick Leave Ordinance”), effective July 1, 2016, which provide eligible employees working in the City of Los Angeles for any employer, regardless of size, with the right to accrue and use up to 48 hours of paid sick leave per year. This sick leave accrual is twice the amount of paid sick leave provided by the California Healthy Workplaces, Healthy Families Act of 2014 (“California law”).

The new law will be administered by the Office of Wage Standards (“OWS”) of the Bureau of Contract Administration, which has issued rules and posted notices and “Frequently Asked Questions” (FAQs) on its website, http://wagesla.lacity.org.

1. Eligibility

To be eligible under the LA Sick Leave Ordinance, employees must be covered by California’s minimum wage laws and work at least two hours a week within the City of Los Angeles for the same employer for 30 or more days within 12 months from the commencement of employment. The law does not apply to employees working outside of the City of Los Angeles in other parts of the County of Los Angeles, such as Century City, San Pedro, Hollywood, and Studio City. However, according to OWS, employers who are not located in the City of Los Angeles must provide sick leave to eligible employees who perform work within the City of Los Angeles.

2. Accrual, Use and Carry-over

Employees begin to accrue paid sick leave on their date of hire (or on July 1, 2016 for current employees) at the rate of one hour of paid sick time for every 30 hours worked within the City of Los Angeles, but new employees cannot use sick time until their 90th day of employment. Employers may choose to grant 48 hours of paid sick leave in a lump sum at the beginning of each calendar year.

Unused sick time must be carried over to the next year, regardless of whether the employer uses the accrual method or provides all 48 hours in a lump sum at the beginning of the year. Employers may implement an accrual cap of 72 hours, but employees are only entitled to take 48 hours of paid sick leave per year. An employee is allowed to accrue more sick time (72 hours) than he or she is allowed to use in one year (48 hours) so that, if an employer uses an accrual method, an employee can use the carried over sick time from the prior year at the beginning of the next year, before he or she has accrued hours for that year.

3. Minimum Increment

Although the Ordinance does not include a provision allowing employers to set a minimum increment of time to be used for sick leave, the rules issued by the OWS provide that employers may set a “reasonable” minimum increment, not to exceed two hours.

4. No Payment Upon Termination

As with the California law, employers are not required to pay employees for accrued, unused sick leave upon termination of employment. However, if an employer chooses to provide sick leave by including the sick leave within its regular Paid Time Off (PTO), the employer will have to pay employees upon termination for all accrued, unused time under the PTO policy.

If an employee is rehired by the same employer within 12 months of the employee’s termination, the employee’s previously accrued sick time must be reinstated.

5. Notices

Employers must post a notice issued by the OWS (and available on the OWS website) about the new law in the workplace in English and any other language spoken by at least 5% of the employees at the workplace or job site. Employers may be assessed a fine of up to $500 for failing to post the required notice.

6. Penalties and Private Right of Action

The OWS may assess penalties of up to $50 per day per violation and administrative fines of up to $500 per day per violation payable to the City of Los Angeles, with double penalties for later violations. The OWS may also order that an employee be reinstated. The law includes a private right of action for employees to file suits in court and employers may also be subject to a misdemeanor prosecution by the City Attorney.

7. Comparison to California Healthy Workplaces, Healthy Families Act

In addition to providing more paid leave than the California law, other differences include:

Under the LA Sick Leave Ordinance, any adverse action taken against an employee within 90 days after the employee has exercised his or her rights under the law creates a rebuttable presumption that the adverse action is retaliatory, compared with the 30-day window in the California law.

The LA Sick Leave Ordinance incorporates the California law’s definition of family member but also includes “any individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.”

Employers may require employees to provide “reasonable documentation” when paid sick leave is used. According to the OWS, such documentation can be required “only after an Employee has used more than 3 consecutive days of sick leave.” In addition, “[r]easonable documentation is also dependent on the situation; the Employer’s policy should never be so difficult that it deters an Employee from taking a legitimate paid sick day.”

Unlike the California law, the LA Sick Leave Ordinance does not exclude employees covered by collective bargaining agreements and specifically states that employees cannot waive their right to sick leave under the new law.

The OWS rules state that the OWS may, after review, allow an employer to retain a leave policy that provides employees with combined paid and/or unpaid leave totaling at least 48 hours per year, even if the policy does not meet the accrual rate and eligibility requirements of the LA Sick Leave Ordinance, if the employer provides other benefits such as paid holidays or health benefits.

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Please do not hesitate to contact any of our attorneys if you have any questions regarding the Los Angeles Sick Leave Ordinance.