Employment Law Alert: City of Los Angeles Publishes Regulations Clarifying Sick Leave Requirements

The City of Los Angeles recently published Rules and Regulations Implementing the Minimum Wage Ordinance – the Ordinance providing paid sick leave to employees working in the City of Los Angeles. Below are some of the important points from the Regulations.

Compliance Deadline

Although we have seen some commentators suggest that employers with 25 or fewer employees must comply with the Ordinance this year, consistent with our prior Employment Law Alert, the Regulations confirm that small employers must provide sick time benefits beginning on July 1, 2017. The compliance deadline for employers with 26 or more employees was July 1, 2016.

“Front-Loading Method”

The Ordinance permits employers to provide “front-loaded” sick time of at least 48 hours at the start of each leave year (the beginning of each year of employment, calendar year, or 12-month period). For employers using the calendar year method, the Regulations provide that during calendar year 2016, an employer can provide 24 hours for the period covering July 1, 2016 to December 31, 2016, before providing the full 48 hours on January 1, 2017.

For an employer using the calendar year “front-loaded” method under California’s paid sick leave law, that employer will presumably have provided 24 (or more) hours of sick leave on January 1, 2016. That employer should then have provided an additional 24 (at least) hours of sick leave on July 1, 2016 in order to comply with the Los Angeles Ordinance.

Carry Over of Paid Sick Time

The Regulations state that whether an employer adopts the accrual method or the “front-loaded” method, an employee is entitled to carry over unused sick time to the following year of employment. While we believe the Regulations conflict with the Ordinance on this point and that it does not make sense to require carry over of “front-loaded” sick leave, given the language in the Regulations, we recommend that employers carry over unused “front-loaded” sick leave. Employers can still cap sick leave banks at 72 hours.

Definition of Employee

As we wrote in our prior Employment Law Alert, covered employees are those who are non-exempt from California minimum wage requirements who work at least two hours in a week within the City of Los Angeles, among other requirements. The Rules clarify that the two hours of work apply to an employee who travels through and makes even one stop in the City of Los Angeles as a requirement of the employee’s work (e.g., to transport passengers or patients, make pickups, deliveries, sales, or service calls). In this scenario, the employee is covered by the Ordinance for all hours worked in the City of Los Angeles, including travel time within the City when it would typically occur during paid work time.

Conversely, an employee who merely travels through the City with no employment related stops would not be covered by the Ordinance.

The Regulations also clarify that an employee who telecommutes from a home in the City is covered by the Ordinance.