City of Los Angeles - Mandatory Paid Sick Leave (Potholes and Pitfalls)

The City of Los Angeles has a mandatory paid sick leave (PSL) law which is part of its minimum wage ordinance and which has been in effect since July 1, 2016 for employers with 26 or more employees.  The Los Angeles PSL ordinance will begin to apply to employers with 25 or fewer employees on July 1, 2017.

From an employer perspective, one of the toughest challenges of these local PSL ordinances is that the rules can change at any time. That is precisely what happened with Los Angeles’s ordinance when the city recently revised the rules and regulations relating to this ordinance. The city also revised its answers to frequently asked questions (FAQ).

Some of these changes or clarifications are important, providing information on topics such as:

·       How to determine business size;

·       How to pay employees for sick time;

·       When an existing paid leave or paid time off policy can satisfy the requirements of the ordinance;

·       How to use the frontloading method during the first year that the law applies to an employer and in subsequent years; and

·       Whether a maximum cap on accrued hours is allowed.

The Los Angeles PSL ordinance contains different provisions than the state PSL law. Employers with businesses in a city with a local PSL ordinance need to comply with both the state and the local law. For each provision, protection or benefit, employers will need to provide whichever is more generous to the employee.  With respect to the City of Los Angeles the city laws and ordinances will almost always be more generous.

Employer means any person, as defined in the California Labor Code including a corporate officer or executive, who directly or indirectly or through an agent or any other person, including through the services of a temporary services or staffing agency or similar entity, employs or exercises control over the wages, hours or working conditions of any Employee.

Employer Requirements

•  Employer must pay hourly minimum wage and provide paid sick leave for hours worked within the geographic boundaries of the City.

•  Employer must post the Office of Wage Standards Wage Notices in a conspicuous place at any workplaces or job sites in English, Spanish, Chinese (Cantonese and Mandarin), Hindi, Vietnamese, Tagalog, Korean, Japanese, Thai, Armenian, Russian and Farsi, and any other language spoken by at least five percent (5%) of the Employees at the workplace or job site.

•  Employer must keep payroll records for four (4) years.

•  Employer must provide employees with the Employer's name, address, and telephone number in writing at the time of hire.

Paid Sick Leave 

Starting July 1, 2016, all Employers, except for Employers with 25 or fewer Employees, were required to provide paid sick leave according to the Los Angeles Minimum Wage Ordinance (MWO).  The paid sick is to be provided to all Employees who work at least two hours in a particular week in the City of Los Angeles for the same Employer for 30 days or more within a year.

Employers with 25 or fewer Employees begin providing sick leave benefits on July 1, 2017.

Entitlement 

Front-Loading.  At least 48 hours provided either at the beginning of each year of employment, calendar year, or 12 month period; 

 Or 

Accrual.  One hour of paid sick leave for every 30 hours worked.

72-Hour Cap.  Accrued unused paid sick leave shall carry over to the following year of employment and may be capped at a minimum of 72 hours; however, an Employer may choose no cap or a higher cap.

Separation from employment.  An Employer is not required to provide compensation to an Employee for accrued or unused sick days at separation from employment.

Reinstatement.  If an Employee is re-hired within one (1) year of separation from employment, previously accrued and unused paid sick leave shall be reinstated.

Usage

When: An Employee may use paid sick leave beginning on the 90th day of employment.

How:   An Employer shall provide paid sick leave upon the oral or written request of an Employee for themselves or a family member, or for any individual related by blood or affinity. 

The use of paid sick leave may be limited to 48 hours leave annually.

Administrative Fines for Violations

Each and every day that a violation exists constitutes a separate and distinct violation. Any administrative fine assessed within a three (3)-year period in any Notice of Correction and determined to be a subsequent violation of the same provision by the same Employer may be increased cumulatively by fifty (50) percent from the maximum administrative fine allowed.

Failure to post notice of the Los Angeles Minimum Wage rate and Sick Time Benefits- Municipal Code Section 188.03(A)  Fine: Up to $500

Failure to allow access to payroll records - Municipal Code Section 188.03(B).  Fine: Up to $500

Failure to maintain payroll records or to retain payroll records for four years - Municipal Code Section 188.03(B)    Fine: Up to $500

Failure to allow access for inspection of books and records or to interview employees - Municipal Code Section 188.03(C)   Fine: Up to $500

Retaliation for exercising rights under this article - Municipal Code Section 188.04 - The Penalty for retaliation is up to $1,000 per employee.        Fine: Up to $1,000

Failure to provide employer's name, address, and telephone number in writing - Municipal Code Section 188.03(A) or 188.05(B)   Fine: Up to $500

Failure to cooperate with the Division's investigation - Municipal Code Section 188.05(B). Fine: Up to $500

Failure to post Notice of Correction to employees - Municipal Code Section 188.06(D).  Fine:Up to $500

Here is a link to the city approved poster that employers in the City of Los Angeles must post in the workplace:   Los Angeles Mandatory Paid Sick Leave Poster