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On February 25, 2016, the City of Santa Monica’s Ordinance Number 2509 (“Ordinance”) became effective, though the majority of its provisions are set to go into effect on July 1, 2016. The Ordinance provides for sweeping changes to Santa Monica’s minimum wage and sick leave requirements.
On February 25, 2016, the City of Santa Monica’s Ordinance Number 2509 (“Ordinance”) became effective, though the majority of its provisions are set to go into effect on July 1, 2016. The Ordinance provides for sweeping changes to Santa Monica’s minimum wage and sick leave requirements.
On February 25, 2016, the City of Santa Monica’s Ordinance Number 2509 (“Ordinance”) became effective, though the majority of its provisions are set to go into effect on July 1, 2016. The Ordinance provides for sweeping changes to Santa Monica’s minimum wage and sick leave requirements.
On February 25, 2016, the City of Santa Monicas Ordinance Number 2509 (Ordinance) became effective, though the majority of its provisions are set to go into effect on July 1, 2016. The Ordinance provides for sweeping changes to Santa Monicas minimum wage and sick leave requirements. While similar legislation has been adopted by several Northern California municipalities, Santa Monica is the first Southern California municipality to adopt its own sick leave legislation in excess of Californias paid sick leave (California Healthy Workplace, Health Families Act of 2014 became effective in July 2015). In addition, the Ordinance will raise the minimum wage to $15.00 for many Santa Monica employers by 2020. This Ordinance increases minimum wage rates at a faster rate than the recently approved changes to the statewide minimum wage, which raises the California minimum wage to $15.00 by 2022. Santa Monicas City Council authorized a working group to review and recommend amendments in response to specific concerns related to the Ordinance. Recommendations for proposed amendments were issued by the group at the end of March and will be considered by the City Council on April 26, 2016. We will let you know if the City Council adopts any changes to the terms of the Ordinance. In the meantime, for more information about the working groups Item Report, visit here: http://www.smgov.net/departments/HED/Econ omic_Development/Minimum_Wage_Proposa l.aspx
New Minimum Wage Rates for Private
Sector and Hotel Employers The Ordinance defines employee as any person who performs at least two hours of work within the boundaries of Santa Monica in a particular week and qualifies as an employee under the Labor Code and wage orders. Employers with 26 or more employees shall pay no less than the following hourly wage rates:
$10.50 per hour by July 1, 2016;
$12.00 per hour by July 1, 2017; $13.25 per hour by July 1, 2018; $14.25 per hour by July 1, 2019; and $15.00 per hour by July 1, 2020.
These changes mirror the City of Los
Angeles Minimum Wage Ordinance. More information can be found at https://bca.lacity.org/site/pdf/lwo/Los%20Ang eles%20Minimum%20FAQ.pdf Employers with 25 or fewer employees have an additional year to satisfy the minimum wage requirements. Specifically, smaller employers must pay Santa Monica employees the hourly wage of $10.50 by July 1, 2017, $12.00 by July 1, 2018, $13.25 by July 1, 2019, $14.25 by July 1, 2020, and $15.00 by July 1, 2021. The Ordinance singles out hotel employees for special wage treatment. A hotel employee is defined as any individual whose primary place of employment is a hotel or has contracted with a hotel employer, but does not include managerial, supervisory or confidential hotel employees. Under the Ordinance, hotel employees shall be paid no
Santa Monica Adopts New Minimum Wage and
Sick Leave Law less than $13.25 by July 1, 2016 and $15.37 by July 1, 2017. Employees who qualify as learners in accordance with California law and wage orders, are to earn not less than 85% of the minimum wage rounded to the nearest nickel during their first 480 hours or six months of employment, whichever is sooner; thereafter, learners are to be paid the Ordinances applicable minimum wage. The Ordinance further provides that on July 1, 2022 for private sector employees and July 1, 2018 for hotel workers, and annually thereafter, the minimum wage will increase based on the Consumer Price Index for Urban Wage Earners and Clerical Workers for the Los Angeles metropolitan area. Santa Monica will announce adjusted rates each January 1st, with increases taking effect on July 1st of each year. The Ordinance also includes posting requirements informing employees of the current minimum wage rate and rights under the Ordinance, along with notices in any other language spoken by at least five percent of the workforce. Service Charges and Surcharges The Ordinance requires employers in Santa Monica to distribute all Service Charges in their entirety to employees who perform services for customers from whom the service charges are collected, with the exception of supervisory and managerial employees. Service Charges are to be paid equitably and according to the services that are or appear to be related to the description of the amounts given to the employer by the customers. Service Charges are defined as charges
customers might reasonably believe are for
services or are otherwise paid or payable directly to employees, including charges designated on receipts, invoices, or billing statements under the term service charge, table charge, porterage charge, automatic gratuity charge, or similar language. Specific rules for banquet and catered meetings also apply. Employers with lawful tip-pooling practices in place prior to the Ordinance may continue such practices. The Ordinance explicitly allows for employers to impose Surcharges in addition to or instead of a Service Charge so long as the employer provides a title or description of the Surcharge that customers might easily and reasonably deduce what the Surcharge is for, and indicate that such amounts do not represent a Service Charge, gratuity or tip for employees. The Ordinance provides that Surcharges are those charges designated on receipts such as health surcharge, health benefits, benefits, facility rental, or similar language. Paid Sick Leave and Deviations from Californias Paid Sick Leave Law Consistent with California state law, Santa Monica employees must accrue at least one hour of paid sick leave for every 30 hours worked, including overtime. Sick time is only to accrue in hour increments. The Ordinances cap differs from the state law cap as follows:
Employers with 26 or more employees
must permit employees to accrue a maximum of 72 hours of sick leave that can be carried over from year to year; and
Santa Monica Adopts New Minimum Wage and
Sick Leave Law
Employers with 25 or fewer
employees must permit employees to accrue a maximum of 40 hours of sick leave that can be carried over from year to year.
Note that state law permits employers to cap
usage of paid sick leave at 24 hours per year, while the Ordinance does not provide for any similar cap on usage. Also, the Ordinance does not explicitly allow for front-loading of paid sick leave like state law does, but frontloading is likely permissible if it provides for more generous sick leave than the hourly accrual method. Consistent with state law, the Ordinance also provides that an employee is eligible to use accrued paid sick leave after the first 90 days of employment or consistent with the employers policies, whichever is sooner. Employers may require an employee to give reasonable notification of an absence for which paid sick leave is or will be used consistent with state law. Paid sick leave provided for under the Ordinance may be used for reasons consistent with Californias paid sick leave law (i.e., diagnosis, care or treatment of an existing health condition of, or preventative care for, an employee or the employees family member). Lastly, consistent with state law, the Ordinance does not provide for payment of sick time at termination unless the benefit is part of a paid time off plan. Exemptions and Employee Protections The minimum wage and sick leave provisions of the Ordinance may be waived in a bona fide collective bargaining agreement, but only if
the waiver is explicitly set forth in the
agreement in clear and unambiguous terms. The Ordinance specifically exempts from coverage of government agencies, including federal and state agencies, cities, counties, school districts and other public entities. In addition, non-profit corporations with 26 or more employees may qualify for a deferral of the minimum wage rate (to mirror the schedule for minim wage rates for employers with 25 or fewer employees) if the non-profit satisfies one of the defined exceptions. The Ordinance also has significant antidiscrimination, harassment and retaliation provisions. Notably, taking adverse action against a person within 180 days of an individuals exercising rights under the Ordinance raises a rebuttable presumption that the adverse action was taken in retaliation for the exercise of such rights. Compliance Assistance For more information assistance, please contact: Jeff Dinkin (805) 730-6820 (949) 725-4098 (424) 214-7016 jdinkin@sycr.com
or
compliance
Nicole Zajack (424) 214-7017 nzajack@sycr.com
In addition, notice will soon be going out
about Stradlings presentation in May on this and other important new employment law developments. Stradlings Labor and Employment team will discuss the new regulations in depth and answer your questions during this presentation. In the meantime, please contact your Stradling attorney for more information.