Santa Monica, CA: Updates to Minimum Wage and Paid Sick Leave Ordinance

• The minimum wage/PSL rules only apply to non-exempt employees. Exempt employees are subject to California’s statewide requirements.
• The rules apply to someone who works from home within the city of Santa Monica. Employees who work from a home outside of Santa Monica do not qualify, even if they work for a Santa Monica-based business, unless the individual also works at least two hours in any particular week for an employer within Santa Monica.
• The rules now clarify that travel time throughout the city qualifies as working time for the purpose of calculating eligibility or accrual under specific conditions:
  • Hours worked includes time when an employee travels through and makes at least one stop in Santa Monica for business-related purposes (e.g., transporting passengers, delivering goods, or making sales or service calls).
  • Time spent just traveling through the city with no stops is not counted under the Ordinance (e.g., traveling through Santa Monica as a result of moving from point A to point B with no employment-related stops).
• Employers are now expressly permitted to frontload paid sick leave, and may switch between front-loading and accrual basis for paid sick leave no more than once per year.
• An employee’s works hours in the city of Santa Monica must be tracked for purposes accruing paid sick leave.
• Paid sick leave used in the form of vacation or that can be used for either vacation or paid sick time does not satisfy the city’s paid sick leave requirements. Employers must have a separate paid sick leave policy.

Action Items

1. Review the revised Rules and Regulations notice issued by the City of Santa Monica here.
2. Have existing policy documents and employee handbooks reviewed for compliance with the updated rules.
3. Update minimum wage rates for non-exempt employees who work in Santa Monica (including for business stops) at least 2 hours per week.
4. Track paid sick leave accrual for hours worked within Santa Monica.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

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