United States: Emeryville, California Adopts Rules Implementing Its Minimum Wage, Paid Sick Leave, And Hospitality Service Charge Ordinance

A little over two years after Emeryville, California's Minimum Wage, Paid Sick Leave, and Other Employment Standards Ordinance took effect on July 2, 2015, the City Manager adopted implementing regulations. In many respects, the regulations codify positions the City historically took in its frequently asked questions (FAQ). For example, all hospitality service charge-related regulations were previously included in the FAQ. However, some regulations clarify or expand the ordinance's requirements.

Business Size Calculation:  Requirements under the ordinance's minimum wage and paid sick leave provisions differ, depending on whether an employer has 56 or more, or 55 or fewer, employees. The regulations state that employers must calculate business size on a quarterly basis. Previously, quarterly calculations were only noted when the workforce fluctuated from week-to-week or month-to-month.

Working with Staffing Agencies: The regulations state an employer's size determines the applicable minimum wage and paid sick leave accrual cap for employees supplied by a staffing agency. This means that while the staffing agency will be providing sick leave to employees – the amount they have to provide will be dictated by the size of the employer at which the temporary employee is placed.  They also require employers to obtain written confirmation from the agency that employees will receive benefits provided by the law. Finally, and significantly, the regulations provide that an employer and an agency are jointly and severally responsible for complying with the law.

Minimum Wage Cannot Decrease: The ordinance requires the minimum wage rate to be annually increased based on changes to the consumer price index (CPI). The regulations clarify that, if a CPI decrease occurs, the minimum wage rate will remain the same as the prior year and will not decrease.

Accrual Rate for Exempt Employees: While the ordinance is silent concerning how exempt employees accrue sick leave, the new regulations follow the common standard: overtime-exempt employees accrue leave based on a 40-hour workweek or their regular workweek hours (if fewer hours). Note, however, that there appears to be some inconsistency between the ordinance and regulations as under the ordinance, to be a covered employee, an employee must be entitled to payment of the state minimum wage. Exempt employees like bona fide executive, administrative, or professional employees, and outside salespeople are not subject to the minimum wage requirements.  Even if the ordinance does not apply to exempt employees, the California paid sick leave law does cover such employees.

Safe Time: The ordinance is silent concerning whether sick leave can be used for safe time purposes (which is expressly permitted under the state paid sick leave law). Nevertheless, he new regulations incorporate the position the city took in its FAQ, i.e., employees who are victims of domestic violence can use sick leave for the following reasons: 1) Receiving medical attention and psychological counseling; 2) Obtaining social services; 3) Relocating; 4) Seeking legal assistance; and 5) Otherwise taking action to protect themselves from further domestic violence.

Written Sick Leave Policy Requirements: The regulations require that, if employers implement the following policies, they must be in writing:

  • Reasonable notice for absences (if implemented, employers must establish a reasonable procedure for employees to communicate absences);
  • Employee verification and/or documentation that leave use was lawful, which must comply with federal and state law confidentiality and privacy protections;
  • A minimum use policy (cannot exceed two hours);
  • Using leave outside Emeryville.

Onboarding Documentation: In addition to the ordinance's requirement that at the time of hiring employees receive written notice of their rights under the law, along with the employer's name, address, and telephone number, the rules provide that, if an employer uses the city-created form for designating a person for whom employees can use leave (if they have no spouse or domestic partner), the form must be provided at the same time.

Minimum Wage Posting Requirements: The city-created notice, which contains the minimum wage rate, must be prominently displayed at workplaces. The rules require employers to provide notice about each new minimum wage by June 15 (new rates take effect on July 1).

Business Size Recordkeeping: The ordinance requires employers to keep a record of employees' names, hours worked, pay rate, sick leave accrual and use, and service charge collection and distribution for at least three years. Within the business size regulations is a new requirement that employers keep a spreadsheet, database, or similar record indicating hire and termination dates for each employee.

Prohibited Waivers: The law's requirements may be waived in a collective bargaining agreement (CBA). The rules clarify that, outside the CBA context, employees cannot waive their rights under the ordinance.

Enforcement: Finally, the regulations clarify how the ordinance can be privately or administrative enforced. They cover investigations, administrative orders, and appeals.

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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Authors
Sebastian Chilco
 
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