03.07.2016
Santa Monica Enacts Comprehensive Wage and Hour Ordinance Raising the Minimum Wage and Implementing Paid Sick Leave

On January 26, 2016, the Santa Monica City Council joined other California cities in enacting an ordinance that implements minimum wage and paid sick leave requirements that go beyond State requirements.

The ordinance applies to employees who work two (2) or more hours in a particular week within the geographic boundaries of the City of Santa Monica.  Santa Monica Municipal Code (“SMMC”) Chapter 4.62 Section 4.62.010.

Sick Leave

The Santa Monica Paid Sick Leave law takes effect July 1, 2016.  Similar to the California paid sick leave law, Santa Monica Sick Leave accrues at a rate of one (1) hour for every 30 hours worked.  However, Santa Monica Sick Leave accrues only in hour-unit increments and not fractions of an hour.  SMCC Section 4.62.025.  Unlike California law, Santa Monica Sick Leave does not currently allow for front-loading.

Employees who work for an employer with 26 or more employees may accrue up to 72 hours of paid sick leave, and the employer must allow carryover of sick leave up to the maximum of 72 hours.  SMMC Section 4.62.025.

Employees who work for an employer with less than 26 employees may accrue up to 40 hours of paid sick leave, and the employer must allow carryover of sick leave up to the maximum of 40 hours. Keep in mind employees may accrue up to 48 hours of sick leave under California law.

Unlike California law, Santa Monica Sick Leave does not permit an employer to limit an employee’s use of sick leave in a year. (California law permits employers to limit an employee’s use of accrued paid sick days to 24 hours or three days in each year of employment, calendar year, or 12-month period.  California Labor Code Section 246(d)).  Therefore, employees may use Santa Monica Sick Leave up to the accrual limits set by the Santa Monica Sick Leave law.

An employee may use Santa Monica Sick Leave consistent with the uses allowed under California law.  Employers are not required to pay out Santa Monica Sick Leave upon termination.

Employees begin accruing Santa Monica Sick Leave after the first 90 days of employment. However, California law requires accrual from the hire date. Employers with employees in Santa Monica must comply with both laws and apply the provision that is more beneficial to the employees where the two laws conflict.

Santa Monica Sick Leave may be waived in a collective bargaining agreement only if the waiver is explicitly set forth in such agreement in clear and unambiguous terms.  SMMC Section 4.62.045.

The Santa Monica Sick Leave law does not require additional posting, or record keeping requirements.

Minimum Wage

The ordinance requires employers with 26 or more employees to pay employees at least $10.50 per hour beginning July 1, 2016. Employers with less than 26 employees get a one year delay and must pay employees at least $10.50 per hour beginning July 1, 2017.  SMMC Section 4.62.015.  The ordinance establishes a yearly increase of the minimum wage that will reach $15.00 by 2020 for employers with 26 or more employees and by 2021 for employers with less than 26 employees.  Id.  Beginning in 2022 the minimum wage will increase based on the Consumer Price Index (“CPI”).  Id.

Hotel Workers

Santa Monica’s ordinance also establishes a separate minimum wage for Hotel Workers.  Hotel Workers’ minimum wage will increase on July 1, 2016 to $13.25 per hour and again on July 1, 2017 to $15.37 per hour.  SMMC Section 4.62.015.  Beginning on July 1, 2018, the minimum wage will increase yearly based on the CPI.  Id. The ordinance defines Hotel Workers as employees whose primary place of employment is at a Santa Monica hotel.

In addition, Hotel Workers are covered by Santa Monica’s sick leave and minimum wage requirements regardless of the number of hours they work in a week in Santa Monica.  SMMC Section 4.62.030.

Other Provisions

The ordinance also addresses the use of service charges, surcharges, and benefits surcharges by employers.

The ordinance does not apply to government agencies and public entities. The ordinance also features exemptions for certain non-profits corporations, specified first-time and seasonal workers, and specified transitional employers.

For more information concerning the Santa Monica ordinance, please contact one of the authors or attorneys in the Private Labor and Employment Group.

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