As we previously reported (
https://conta.cc/3e5Or5A
), Los Angeles Mayor Eric Garcetti issued a Public Order mandating that certain large employers provide up to 80 hours of "supplemental paid sick leave" ("SPSL") to employees within the City of Los Angeles who are unable to work for specified COVID-19-related reasons. The City's Office of Wage Standards ("OWS") just recently issued rules and regulations to clarify a number of unanswered questions regarding the SPSL Public Order.
We summarize the additional details set out in the OWS Rules and Regulations in the following Q & A:
Employers Covered by the Order:
Q:
What are the rules for counting employees to determine whether an employer has 500 or more employees in the City of Los Angeles or 2000 or more employees nationwide?
A:
The number of employees, for purposes of the Order, is the
average
number of employees employed during 2019, including full-time employees, part-time employees, temporary or seasonal employees and employees supplied through a temporary employment agency.
Q:
Should an employee be counted if he or she works both at locations inside the City of Los Angeles and locations outside of the City?
A:
Yes. An employee should be counted as an employee within the City of Los Angeles if he or she performed any work within the City of Los Angeles in 2019.
Employees Covered by the Order:
Q:
Does the Order cover workers who are independent contractors?
A:
No, it only covers employees working within the City of Los Angeles who were employed by the same employer from February 3, 2020 through March 4, 2020.
However,
any worker will be presumed to be an employee, and the employer will have the burden of proving that a worker is a bona fide independent contractor and not an employee
. Merely, labeling a worker as an independent contractor will not suffice to meet that burden.
Q:
Does the Order apply to employers located outside the City of Los Angeles that have employees performing work within the City?
A:
Yes. The Regulations provide the following example:
- "Example 1: An Employee works for a company that is located in Riverside, CA since June 2019. The Employee makes monthly deliveries to a client located in the City of Los Angeles but is now unable to do so or perform other work for this company. The Employee would be covered by the SPSL Public Order."
Q:
Does the Order apply to an employee who normally works for an employer at a location
outside
the City of Los Angeles but is
telecommuting
from his or her home inside the City?
A:
Yes. Such employees are considered to be working within the City of Los Angeles and are entitled to paid sick leave if they are unable to work for qualifying COVID-19 related reasons. The Regulations provide the following examples:
- "Example 2: An Employee who normally works for a company at a location outside the City, but is telecommuting from a home inside the City, would be covered by the SPSL Public Order.
- "Example 3: An Employee who normally works for a company at a location outside the City and is telecommuting from a home outside the City, would not be covered by the SPSL Public Order."
Q:
Does the Order apply to an employee who normally works for an employer at a location within the City of Los Angeles but is now teleworking from his or her home outside of the City?
A:
Yes. Such employees are considered to be working within the City of Los Angeles and are entitled to paid sick leave if they are unable to work for qualifying COVID-19 related reasons. The Regulations provide the following example:
- "Example 4: An Employee who normally works for a company at a location inside the City, but is telecommuting from a home outside the City, would be covered by the SPSL Public Order."
Exemptions:
Q:
Does the exemption from the Order for employers of Emergency and Health Services Personnel apply even if the employer has other employees who are not Emergency or Health Services workers?
A.
Yes. The exemption applies to an employer with any number of Emergency or Health Services Personnel. The Regulations give the example of a security guard or receptionist working in a hospital. Such employees are not entitled to supplemental paid sick leave under the Order, notwithstanding the fact that they are not healthcare workers themselves, because the hospital is providing healthcare services.
Q:
In determining whether an employer qualifies for the exemption for employers with "generous leave" policies that provide 160 hours or more of paid leave per year, what types of paid leave are counted as part as part of the 160-hour threshold?
A:
Paid vacation time, compensatory time off ("CTO") and paid sick leave may be counted toward the 160 hours, but paid holidays and bereavement leave cannot be counted.
Q:
What if some of an employer's employees receive 160 hours or more of paid leave annually but other employees do not?
A:
Any employees who are not eligible for at least 160 hours of paid time off annually are entitled to paid sick leave under the Order. The Regulations give the example of a company that provides new employees with 80 hours of paid sick leave and 40 hours of vacation annually, and provides employees who have worked for the company five years or more with 80 hours of paid sick leave and 80 hours of vacation annually. The employer is required to provide supplemental paid sick leave to the new employees under the Order, but is exempt from providing supplemental paid sick leave to the employees who have worked for the employer five years or more.
Q:
For purposes of the Closed Business exemption for businesses that closed or ceased operations for 14 or more days due the City's COVID-19 emergency order, do the 14 days that the company was closed have to be consecutive days?
A:
Yes. To qualify for this exemption, the employer must be closed or not operating for at least 14 consecutive days after March 4, 2020 due to the City's emergency order.
Q:
For purposes of the Closed Business exemption, must the 14 days of leave provided to employees be paid leave?
A:
No. The 14 days of leave may be paid or unpaid and may include days that an employee is furloughed.
Requiring Information/Documentation from Employees Requesting Leave:
Q:
Can an employer require an employee requesting leave to provide a description or explanation of the illness or condition necessitating the leave.
A:
Generally, no. An employer cannot require an employee to identify or provide details or documentation regarding the illness or condition necessitating the leave and can inquire only to the extent necessary to identify and make a record of which of the qualifying reason for leave is the basis of the employee's request –
i.e.,
"child care", "quarantine", "vulnerable medical condition" or "caring for a family member". The inquiry should not be so intrusive that it deters an employee from taking legitimate supplemental paid sick leave.
Amount of, and Pay Rate for, Supplemental Paid Sick Leave:
Q:
How is the pay for supplemental paid sick leave calculated for full-time employees?
A:
An eligible employee who either works at least 40 hours per week
or
is otherwise classified by the employer as a full-time employee must be provided with up to 80 hours of supplemental paid sick leave for qualifying reasons. Thus, if the employer classifies any employee who works over 30 hours per week as a full-time employee, the employee is entitled to up to 80 hours of paid sick leave. The rate of pay for full-time employees is calculated from the employee's average two-week pay between February 3, 2020 and March 4. 2020. For example, if a full-time employee earned $1,600 during the first two-week period in that time frame, with average pay of $20/hour, and then earned $1,760 during the second two-week period, averaging $22/hour, supplemental paid sick leave would be paid at $21/hour.
Q:
How is the pay for supplemental paid sick leave calculated for part-time employees?
A:
For an eligible employee who works less than 40 hours per week
and
is not classified by the employer as a full-time employee, the amount of paid sick leave hours that must be provided is determined by adding the number of hours worked between February 3, 2020 and March 4, 2020 and dividing the total hours for that period by 2. As with full-time employees, the rate of pay for part-time employees is calculated from the employee's average two-week pay between February 3, 2020 and March 4. 2020. For example, if an employee who works 20 hours per week earned $800 during the first two-week period in that time frame, averaging $20/hour, and then earned $880 during the second two-week period, averaging $22/hour, supplemental paid sick leave would be paid at $21/hour.
Q:
Do overtime premiums have to factored into the pay rate calculation?
A:
No. Only the employee's base pay rate before overtime is included in the calculation of the pay rate for supplemental paid sick leave.
Q:
Can an employee use his or her entitlement to supplemental paid leave intermittently?
A
: In answer to this question, the OWS states as follows: "[i]f an employee chooses not to use the supplemental paid sick leave time consecutively, but instead would like to use it periodically, this
may
be allowed until the supplemental paid sick leave limit is met." (Emphasis added.) Notably, although the Regulation does not specifically mandate that an employer "must" allow an employee to use supplemental paid sick leave intermittently, the language appears to allow employees to use the leave as needed, rather than take it all at once or lose the balance of the time off for future use.
Recordkeeping Requirements:
Q:
What records should be kept regarding supplemental paid sick leave?
A:
Although Regulations do not mandate any recordkeeping requirements (because there are no such requirements mandated in the Mayor's Order), they recommend that employers "should" retain documentation of compliance with the Order and, indeed maintaining such records is vital to ensuring that the employer can effectively defend itself against lawsuits which are specifically authorized by the Order.
Specifically, the Regulations recommend maintaining documentation of the name of each employee who requests leave, the date leave is requested, the reason stated for the requested leave, whether or not the request was granted and, if not, the reason it was denied. An employer relying on any of the exemptions, should also maintain all documentation showing that it meets the requirements for exemption – such as documents showing when the employer began operating in the City of Los Angeles (for the new business exemption) or documentation of leave policies providing at least 160 hours of paid leave annually.
Further Regulations:
Q:
Will additional Rules and Regulations under the supplemental paid sick leave Order be issued by the OWS?
A:
Yes, probably. The OWS anticipates issuing additional rules and encourages employers to check its website at
https://wagesla.lacity.org
regularly for the latest updates.
If you have any questions about the matters discussed in this issue of Compliance Matters, please call your firm contact at 818-508-3700 or visit us online at
www.brgslaw.com
.
Sincerely,
Richard S. Rosenberg
Katherine A. Hren
Philip Reznik
Ballard Rosenberg Golper & Savitt, LLP
