United States: It's Contagious: Paid Sick Leave And Minimum Wage Hikes Spread To Los Angeles And San Diego

Paid sick leave is on the rise, as we reported here, here, here, and here.  As we approach the one-year compliance anniversary for state-mandated paid sick leave, employers now face additional compliance wrinkles in the Los Angeles and San Diego markets.  Earlier this month, both Los Angeles and San Diego passed paid sick leave and minimum wage ordinances that take effect (and require compliance) as soon July 2016.

The Los Angeles Ordinance

Enacted as an urgency matter, the Los Angeles paid sick leave and minimum wage ordinance ("Los Angeles Ordinance") takes effect on July 1, 2016, and applies to all employees who work at least two hours a week within the City of Los Angeles and who are entitled to the California minimum wage.

While the Los Angeles Ordinance tracks California paid sick leave in some respects, there are several key differences that employers should be aware of.  Critically, the Los Angeles Ordinance doubles the state-mandated entitlement, allowing employees to use up to 48 hours of paid sick leave in a year.

As of July 1, 2016, and consistent with the California statute, current employees must either receive the entire 48 hours as a lump sum or begin accruing paid sick leave at the rate of one hour per every 30 hours worked.  For employees hired after July 1, 2016, a lump sum must be given or accrual must begin on the first day of employment.  Employees may begin using paid sick leave on their 90th day of employment or July 1, 2016, whichever is later.  Accrued unused paid sick leave must be carried over each year, but may be capped at 72 hours.  Employers can satisfy these requirements by having a paid leave or paid time off policy that provides at least 48 hours.

The Los Angeles Ordinance allows employees to use paid sick leave for the same reasons provided by state law: (1) the diagnosis, care, or treatment of an existing health condition of, or preventative care for, an employee or an employee's family member; or (2) seeking assistance in relation to a victim of domestic violence, sexual assault, or stalking.

However, the Los Angeles Ordinance dramatically expands the term "family member" to include, in addition to those specified in the state law, "any individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship."  Given the lack of clarity as to who qualifies as a "family equivalent" or how employers might verify the relationship, this broad definition could include virtually anyone.

While the Los Angeles Ordinance does not address advance notice for sick leave use, it does permit employers to require "reasonable documentation" for the use of paid sick leave.  But employers should still use caution in requesting any documentation for the first 24 hours of sick leave to avoid potentially running afoul of state law.

Additionally, the Los Angeles Ordinance imposes annual minimum wage increases according to the following schedule:

Date 26 or More Employees 25 or Less Employees
July 1, 2016 $10.50 $10.00 (status quo)
July 1, 2017 $12.00 $10.50
July 1, 2018 $13.25 $12.00
July 1, 2019 $14.25 $13.25
July 1, 2020 $15.00 $14.25
July 1, 2021 n/a $15.00

Beginning on July 1, 2022, the Los Angeles minimum wage will continue to increase annually according to the cost of living for the Los Angeles metropolitan area.

The San Diego Ordinance

Also this month, San Diego voters approved the Earned Sick Leave and Minimum Wage Ordinance ("San Diego Ordinance"), which will become effective immediately once election results are certified (expected to be July 7, 2016).

The San Diego Ordinance covers all employees who, in one or more weeks of the year, work at least two hours in the City of San Diego (regardless of the employer's location) and who are entitled to the California minimum wage.

Under the San Diego Ordinance, upon the effective date or at the commencement of employment (whichever is later), employees accrue one hour of paid sick leave for every thirty hours worked within the City of San Diego.  Employers may limit the use of paid sick leave to 40 hours in a year, but accrual cannot be capped and unused sick leave must be carried over year to year.    The San Diego Ordinance does not expressly allow employers to front-load paid sick leave as a lump sum each year, but it does allow employers to meet their obligations through the use of a paid vacation or paid time off policy.  Employees may begin using paid sick leave after their 90th calendar day of employment.

In addition to the reasons currently available under state law, the San Diego Ordinance also allows employees to use paid sick leave when a public health emergency causes an employee's workplace or a child's school or child care provider to close.

Notably, under the San Diego Ordinance, employers may require up to seven days' advance notice of the need for leave when foreseeable, or notice as soon as practicable when unforeseeable.  Employers may also require "reasonable documentation" for paid sick leave lasting more than three consecutive work days.

Paid sick leave need not be paid out upon separation, but must be reinstated if the employee is rehired within six months, as opposed to the state requirement of one year.  The ordinance also includes notice and posting requirements.

Finally, the San Diego Ordinance provides that minimum wage increase as follows:

Date Minimum Wage
Effective Date $10.50
January 1, 2017 $11.50

Starting January 1, 2019, the minimum wage will increase annually based on the cost of living.

Employers with employees in Los Angeles or San Diego should review their paid sick leave policies (yet again) to ensure compliance with these new ordinances.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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