On April 11, 2020, the Los Angeles Office of Wage Standards issued its Rules and Regulations Implementing the Public Order on Supplemental Paid Sick Leave Due to COVID-19 (Rules) that provide some guidance as to how the City’s emergency paid sick leave Order signed on April 7, 2020 is to be applied (see our blog post about the April 7, 2020 Order here).
The material provisions of these Rules are set forth below.
Who Is Considered an "Employee?"
An "Employee" covered by the Order is someone who has been employed with the same employer from February 3, 2020 through March 4, 2020 and is unable to work or telework for that employer.
The Rules explain that the Order covers an employee who performs any work within the City of Los Angeles, even if the employer is not located within the City of Los Angeles. For example, an employee who works for a company that is located in Riverside, Calif., and made monthly deliveries to a client located in the City of Los Angeles but is now unable to perform any work for this company, is covered by the Order.
The Rules also provide guidance for applying the Order to employees who are "telecommuting," i.e., working from home. The Order applies to employees who either:
- Normally work for companies at locations inside the City of Los Angeles, and are telecommuting from homes inside the City;
- Normally work for companies at locations outside the City, but are telecommuting from homes inside the City; or
- Normally work for companies at locations inside the City, but are telecommuting from homes outside the City.
This means that if either an employee’s (a) normal work location or (b) home from which they are working remotely, are located within the City of Los Angeles, the Order applies to that employee.
Who Is Considered an "Employer?"
While there are several exemptions, the Order applies to employers that have either:
- (i) 500 or more employees within the City of Los Angeles; or
- (ii) 2,000 or more employees within the United States.
The Rules explain that the size of an employer’s business is determined by the average number of employees employed during the previous calendar year. The practical consequence of this is that employers who have recently undergone furloughs or layoffs as a result of the COVID-19 pandemic are still required to provide supplemental paid sick leave to their employees if they had the requisite number of employees during the prior calendar year.
This requirement differs dramatically from the FFCRA, where employer size is determined on the day an employee requests a leave of absence (see one of our relevant blog posts on the FFCRA here). The number of employees includes, but is not limited to, full-time employees, part-time employees, temporary or seasonal employees, and workers supplied through a temporary employment agency.
The Rules further provide that an employee who worked in multiple locations should be counted as an employee within the City of Los Angeles if they performed any work within the City’s geographic boundaries in the previous calendar year.
Exemptions From the Order
The Order includes six exemptions; if one of the exemptions applies, the Order does not apply and supplemental paid sick leave is not required to be offered. The Rules provide a few clarifications as to how these exemptions are to be interpreted and applied:
- Emergency and Health Services Personnel – Employers who employ emergency personnel and healthcare workers are not covered by the Order. For example, a security worker or receptionist who works inside a hospital would not be eligible for supplemental paid sick leave because the hospital provides healthcare services.
- Critical Parcel Delivery – Employers of employees who provide global parcel delivery services are not covered by the Order because global parcel delivery is considered an essential emergency service necessary for health and safety reasons.
- Employers With Generous Leave Policies – The Order does not apply to employers who have a paid leave or paid time off policy that provides a minimum of 160 hours of paid leave annually. This includes, but is not limited to, paid vacation time, paid time off, and paid sick leave. Paid holidays and paid bereavement leave do not count toward the 160-hour minimum. To show that they qualify for this exemption, employers should retain documentation demonstrating that employees have access to at least 160 hours of paid leave.
- New Businesses – The Order does not apply to new businesses that: (a) started in the City or businesses that relocated from outside the City on or after September 4, 2019 through March 4, 2020; and (b) were not in business in the City in the 2018 tax year. Construction businesses and film producers do not qualify for this exemption. To show that they qualify for this exemption, businesses can show documentation including, but not limited to, lease documentation for business property in the City, Business Tax Registration Certificate documentation, or Articles of Incorporation.
- Government Agencies – The Order does not apply to employees of government agencies working within the course and scope of their public service employment. Government contractors are not included in this exemption.
- Closed Businesses and Organizations – Any business or organization that was closed or not operating for a period of 14 or more consecutive days—any time on or after March 4, 2020—due to a city official’s emergency COVID-19 order, or has already provided at least 14 days of paid or unpaid leave—including furlough days—is exempt from the Order.
Collective Bargaining Agreements
The Order provides that if a collective bargaining agreement (CBA) is in place as of April 7, 2020 that does not address sick leave related to COVID-19, the employer must comply with the Order until the CBA is amended to expressly waive the terms.
The Rules clarify that, for any time period not covered by the CBA, the employer must comply with the Order. Any employer who fails to comply will be required to make retroactive corrections, which could include making retroactive payments to affected employees.
What if Employers Have Already Provided Additional Paid Sick Leave?
If an employer has already provided paid leave since March 4, 2020 for COVID-19 related purposes, any hours will be offset against the 80-hour requirement.
The Rules provide two examples of how this is applied. In one example, a full-time employee who was exposed to a known COVID-19 case on March 15, 2020, was directed by a public health official to be tested for COVID-19, and stayed home for a week in self-quarantine until they received their negative test results, received 40 hours of paid administrative leave while they were home awaiting their test result.
These 40 hours of paid administrative leave would partially offset the employer’s obligation to provide 80 hours of supplemental paid sick leave, so the employer would only be required to provide 40 more hours of supplemental paid sick leave to that employee.
How Is Supplemental Paid Sick Leave Calculated?
The Order explains that, during supplemental paid sick leave, an employee’s rate of pay is their average two-week pay over the period of February 3, 2020 to March 4, 2020 (capped at $511 per day or $5,110 total).
The Rules provide several examples of employee pay calculations, and state that overtime premiums are not considered when calculating an employee’s average two-week pay. However, the base rate before the premium for any overtime hours should be included in the calculation.
The Rules also state that an employee can choose to use supplemental paid sick leave periodically, rather than consecutively.
Documentation From an Employee
The Order provides that employers may not require a doctor’s note or other documentation for the use of supplemental paid sick leave relating to COVID-19.
The Rules state that while an employer may require an employee to provide the reason for taking leave (e.g., childcare, quarantine, vulnerable medical condition, or caring for a family member) for recordkeeping purposes, an employer may not inquire into or require an employee to provide any further description or explanation of the illness or condition necessitating the employee’s leave.
How to Document Employees' Use of Supplemental Paid Sick Leave
According to the Rules, an employer should document their compliance with the Order, including, but not limited to, documentation of paid leave provided to employees and requests for supplemental paid sick leave. Documentation should include:
- Name of the employee requesting the leave;
- Date for which the leave is requested;
- Category or reason for the leave; and
- Whether the leave request was approved and, if not, the reason for denial.
The Order prohibits employers from terminating, discriminating against, or reducing the pay of any employee who requests or uses supplemental paid sick leave, or otherwise exercises their rights under the Order.
The Rules provide the following additional examples of prohibited retaliatory acts: reduction in hours; demotion; reassignment to a less desirable assignment, location, or schedule; and denial or reduction of other benefits.
Employer COVID-19 Resources
The facts, laws, and regulations regarding COVID-19 are developing rapidly. Since the date of publication, there may be new or additional information not referenced in this advisory. Please consult with your legal counsel for guidance.
DWT will continue to provide up-to-date insights and virtual events regarding COVID-19 concerns. Our most recent insights, as well as information about recorded and upcoming virtual events, are available at www.dwt.com/COVID-19.