With the arrival of 2017, many employers are recognizing the difficulties in navigating the complex set of paid leave laws in Southern California.  For regular readers of the blog, this may seem like a repeat, but this post is five items employers need to remember about paid sick leave laws in Southern California.

1. The law – either state or local –  that provides the most generous benefits to the employees must be followed by the employer.

California’s paid sick leave law applies to all employers and provides employees with 24 hour or 3 days of paid sick leave.  As set forth below, many local cities and counties have implemented their own paid sick leave requirements.  Employers must comply with the law that provides the most benefits to employees.

2. Southern California cities and counties that have implemented paid sick leave laws

State/City Minimum Wage Paid Sick Leave
California $10/hr January 1, 2016; $10.50 January 1, 2017 for employers with 26 or more employees Current: 3 days or 24 hours
Los Angeles – City July 1, 2016: $10.50/hr; July 1, 2017 $12; July 1, 2018 $13.25; July 1, 2019 $14.25; July 1, 2020 $15.00 * July 1, 2016: 48 hours*
Los Angeles – County Same as LA City No specific requirement – CA law applies
San Diego July 2016: $10.50; January 1, 2017 $11.50; January 1, 2019 indexed to inflation 5 paid sick days (effective July 11, 2016)
Santa Monica $10.50 July 1, 2016; July 1, 2017 $12.00; July 1, 2018 $13.25; July 1, 2019 $14.25; July 1, 2020 $15.00* January 1, 2017: 32 hours for small businesses, 40 hours for large businesses; January 1, 2018: 40 hours for small business, 72 hours for large businesses*
Malibu $10.50 July 1, 2016* No specific requirement – CA law applies
Pasadena $10.50 July 1, 2016* No specific requirement – CA law applies
* Employers with 25 or fewer employees the implementation is delayed one year.

3. How to determine which law applies to your business operating in the County of Los Angeles

There is a lot of confusion about what law applies to businesses operating in Los Angeles County.  The County of Los Angeles’ ordinance only applies to unincorporated cities within the county.  Here is a list of the incorporated cities in the County of Los Angeles. If the employer is located in an incorporated city, the employer must comply with the incorporated city’s paid sick leave requirements, and if the city does not have any requirements, California’s paid sick leave law would apply.

4. Understand the difference between use cap and accrual caps

Under California state law, employers may apply an accrual cap at 48 hours or 6 days per year.  The employees must be allowed to accrue up to this amount and carry it over from year to year.

The accrual cap is different from the annual use cap.  The annual use cap allows employers to limit the amount of paid sick leave used by the employee within one year.  Under California state law, employers can also impose an annual use cap of 24 hours or 3 days (whichever is greater) each year.

Employers need to pay careful attention about the differences in the state and local laws that apply to their companies in this regard.  For example, under Santa Monica’s paid sick leave ordinance, the accrual cap is 40 hours for large employers in 2017.  However, because accrual cap is less than what is permitted under California law, employers must follow California’s more generous requirements of allowing accrual of up to 48 hours or 6 days per year) and 72 hours in 2018.

5. Can employers change accrual methods after one has been implemented?

Yes, there is nothing that prohibits employers from changing accrual methods (i.e., up-front grant or the accrual method).  However, as employers are already required to provide non-exempt employees with an individualized Notice to Employee as required under Labor Code section 2810.5 that sets forth the employer’s accrual method, employers should consult an employment attorney about how to provide advanced notice to employees prior to changing the policy and how to treat already accrued and unused paid sick leave under the old policy.