The California Legislative Report – December 2014

DLSE Issues FAQs on Paid Sick Leave Law, and Updated Poster and Notice for Employers to Use Beginning January 1, 2015

Anticipating that there are many questions concerning California's new Paid Sick Leave law (AB 1522), the Division of Labor Standards Enforcement (DLSE) has recently issued a series of Frequently Asked Questions (FAQs) and responses regarding the new law.  These FAQs are available on the DLSE's website under the "What's New?" tab or at http://www.dir.ca.gov/dlse/Paid_Sick_Leave.htm.  Notably, the DLSE has taken the position that, even though employees do not begin to accrue and cannot take paid sick leave until after July 1, 2015, other provisions of the law, including the employer's obligation to display a poster and provide updated Wage Theft Prevention Act notices, take effect January 1, 2015.  The DLSE's position is that although the new provision governing accrual and usage (Labor Code section 246(a)) states it does not take effect until July 1, 2015, the absence of similar language in other provisions of AB 1522 means they take effect January 1, 2015 under the general effective date of new legislation. 

Accordingly, the DLSE's FAQs explicitly state that beginning January 1, 2015, employers must post in a conspicuous place at the workplace a poster regarding paid sick leave.  Fortunately, the DLSE has developed a new poster employers may use, which may be obtained on the DLSE's website at http://www.dir.ca.gov/DLSE/Publications/Paid_Sick_Days_Poster_Template_(11_2014).pdf.  The DLSE's FAQs similarly state that after January 1, 2015, employers must provide most employees with an individualized Notice to Employee (i.e., the Wage Theft Prevention Act Notice required under Labor Code section 2810.5) that includes paid sick leave information.  The DLSE has also published a revised version of the Wage Theft Prevention Act Notice, which can be obtained on the DLSE's website at http://www.dir.ca.gov/DLSE/Publications/LC_2810.5_Notice_(Revised-11_2014).pdf.

In light of the DLSE's position on these notice requirements, employers should ensure they obtain or develop these posters and Wage Theft Prevention Act Notices and begin posting and using them by no later than January 1, 2015.  Employers are also encouraged to obtain and review the DLSE's FAQs and, given how many times the DLSE updated similar items after the Wage Theft Prevention Act took effect in 2012, employers should also periodically check the DLSE's website for updated guidance.

Some California Cities Enact Their Own Minimum Wage Laws, While Others Try and Fail or Await Further Approval

California’s minimum wage is currently $9.00 per hour and will increase to $10.00 per hour on January 1, 2016. However, a new bill has recently been introduced that will, if passed, increase the minimum wage to $11.00 per hour by January 1, 2016 and $13.00 per hour by January 1, 2017.  San Francisco and Oakland recently passed laws increasing this amount for their cities, while cities like San Diego and Eureka tried but failed, for the time being.  Los Angeles is currently attempting to pass a generally applicable minimum wage increase, and successfully raised the rate for hotel workers.  Below is a synopsis.

San Francisco

San Francisco, which currently has a higher minimum wage than the rest of the State ($10.74 per hour), passed an incremental wage increase.   Here is the breakdown:

May 2015:           $12.25
July 2016:            $13.00
July 2017:            $14.00
July 2018:            $15.00

Then, on July 1st of each year, the rate will be adjusted for inflation using the Consumer Price Index. 

Oakland

Oakland also passed a minimum wage increase by ballot measure.  Beginning on March 2, 2015, all employees working at least two hours per week within the City of Oakland will now make a minimum wage of $12.25 per hour. 

The rate will be adjusted every January for inflation using the Consumer Price Index. 

Los Angeles

Los Angeles’s Mayor Eric Garcetti proposed an increase in the city’s minimum wage to $15.25 per hour by 2019, while three city councilmembers co-authored a motion that calls for a lower increase to $13.25 per hour.  The council will likely get an ordinance to the mayor’s desk by January 2015, but the exact amount is still to be determined.

While the generally applicable minimum wage hike is stalled until next year, the Los Angeles City Council did vote to raise the minimum wage for the hotel industry to $15.37 per hour.  Hotels with 300 rooms or more will have to start paying the new minimum wage by July 1, 2015, while those with 150 to fewer than 300 rooms will not pay the higher wages until 2016.  Unionized hotels are exempt, as are hotels with fewer than 150 rooms. 

Eureka and San Diego

This past year, Eureka and San Diego both tried but failed to pass minimum wage increases.  While Eureka’s proposed wage hike failed by a landslide, the story was different in San Diego.  After the San Diego City Council unilaterally passed a wage increase via ordinance, opponents blocked it by submitting enough signatures to mandate the council either rescind their ordinance or allow the San Diego population to vote on it.  The Council then voted unanimously to put the minimum wage ordinance on the June 2016 primary election ballot.  As of now, the new rate (if approved by the voters) will be $11.50 per hour.

San Francisco Passes Retail Worker “Bill of Rights”

San Francisco passed an ordinance requiring certain retail businesses within the city to make changes that will limit their discretion when it comes to scheduling flexibility and hiring, among other things.  The ordinance pertains to “formula retail” businesses (chain stores), with 20 or more locations worldwide that employ 20 or more employees within San Francisco.  An employer is considered a “formula retail” business if it maintains two or more of the following features:  (1) a standardized array of merchandise; (2) a standardized façade; (3) a standardized décor and color scheme; (4) uniform apparel; (5) standardized signage; or (6) a trademark or service mark.  This includes businesses such as commonly known retail stores and restaurants. 

The ordinance requires covered businesses to offer extra hours to part-time employees before hiring new employees.  Further, it calls on retail stores to post employees’ schedules at least 14 days in advance, to furnish extra pay for changing a schedule last minute, and to allow the part-time employees the same access to requests for time off and particular work schedules as it allows for full-time employees.  Finally, it requires covered businesses to retain employees for 90 days upon the sale or transfer of a retail establishment, and it makes it unlawful for a covered employer to retaliate against an employee for exercising his or her rights under the ordinance.

The ordinance becomes operative 180 days after the mayor signs the bill.  It is anticipated that he will do so soon.  For all of the details, the full text of the ordinance can be found here:  https://sfgov.legistar.com/View.ashx?M=F&ID=3380423&GUID=D71793C5-7D28-46F0-839E-40D4D31C7A62  

City of Oakland Passes Paid Sick Leave Measure

Oakland passed its own sick leave law, which is, in most respects, broader than California’s generally applicable paid sick leave law.  Under Oakland’s new law, eligible employees may accrue up to nine days of paid sick leave at the rate of one hour of paid leave for every 30 hours worked. Unused paid sick leave carries over from year to year, but is subject to the accrual cap.  However, unused time does not need to be paid out at time of separation from employment.

Employees are eligible to accrue paid sick leave if they work at least two hours per week in the City of Oakland. Unlike the generally applicable California paid sick leave law, there is no basis under Oakland’s new law to grant paid sick leave at the beginning of each calendar year.  Further, employers who already make available sufficient paid time off to their employees do not need to provide additional time off.

Accrual and eligibility for current employees begins immediately on the March 2, 2015. Employees hired after March 2 begin accruing paid sick leave upon hire, but they are not eligible to use any accrued time until they reach 90 days of employment.

The sick leave can be used for an employee’s own illness or medical diagnosis or treatment, and also to care for the employee’s child, parent, legal guardian or ward, sibling, grandparent, grandchild, and spouse or registered domestic partner or other designated person who is ill, injured, or requires medical diagnosis or treatment. The familial relationship extends not only to biological relationships, but also relationships resulting from adoption, step-relationships, and foster care relationships.

An employer may require an employee to provide reasonable advance notice of the need to use paid sick leave.  And an employer may take only reasonable measures to verify or document that an employee’s use of paid sick leave is lawful, and may not require an employee to incur expenses in excess of five dollars to show his or her eligibility for such paid leave.

As with the generally applicable California law, Oakland’s measure includes an anti-retaliation clause and there is a notice requirement.  The notice requirement calls for written notification to each current employee and each new employee.  It must be posted prominently in an area accessed by all employees. 

For more details, the language of the measure can be found here:  http://www.acgov.org/rov/elections/20141104/documents/MeasureFF-V3.pdf