Los Angeles, California: The City of Los Angeles Revises Its Paid Sick Leave Rules Currently in Effect

• For purposes of determining who the rules apply to, employer size is only determined by those individuals who perform at least two hours of work within the geographic boundaries of the City, in addition to the existing requirement that such individuals qualify as employees entitled to the state minimum wage.
• An employer is permitted to use different methods of paid sick leave (i.e., front-loading or accrual) for different classifications of employees (e.g., part-time vs. full-time employees).
• An employer may pay out accrued and unused paid sick leave hours in excess of the 72-hour cap at the end of a year, but is not required to do so.
• For the 2017 calendar year only, employers with 25 or fewer employees using the front-loading method can prorate the required annual allotment of sick leave hours to 24 hours for July 1 through December 31, 2017. On January 1, 2018, such employers are required to provide the full 48 hour allotment.
• The original ordinance allows a minimum cap for paid sick leave accrual banks at 72 hours, regardless of whether the front-loading or accrual method is used. The rules provide examples to clarify this provision, including how to cap paid sick leave under the accrual method.
• For employers who provide paid time off that is equal to 48 hours or more, no additional time is required to be provided. The rules now clarify that such qualified paid time off may consist of vacation, sick, personal paid time or PTO, floating holidays, holidays, or personal days.
• Employers must calculate the rate of pay for used sick leave by either (1) calculating in the same manner as the regular rate of pay for the workweek in which the employee used paid sick leave (regardless if overtime was worked), or (2) dividing total wages (not including overtime) by the total hours worked in the full pay periods of the prior 90 days of employment.

Action Items

1. Review the revised Rules and Regulations here and here.
2. Have applicable paid sick leave policies reviewed for compliance.