At 9:15 p.m. on April 7, 2020, Los Angeles Mayor Eric Garcetti issued an emergency order that immediately required certain employers to provide supplemental paid sick leave (SPSL) during the COVID-19 public health emergency, superseding the ordinance passed by the Los Angeles City Council. Four days later, on April 11, the Los Angeles Office of Wage Standards issued rules implementing the order. Below we highlight how the regulations clarify the order and/or address some issues the order did not cover.

Calculating Business Size: The order applies to employers with either 500 or more employees in Los Angeles or with 2,000 or more employees in the United States. The rules indicate that the previous calendar year's average employee numbers determine business size, which include full- and part-time employees, temporary and seasonal employees, and staffing-company-supplied employees. The rules also note that, if a company meets the 2,000 or more U.S. employee standard, the order applies to its Los Angeles employees (e.g., if 20 of 3,000 U.S. employees work in Los Angeles, the order applies to the L.A. employees only).

Exemptions: The order potentially exempts from coverage numerous employers. The rules confirm these exemptions are for employers, not employees, e.g., the law does not cover hospital receptionists because they are employees of an employer providing health care services.

The rules address which paid time off benefits qualify for purposes of the exemption for employers that annually provide at least 160 paid leave hours. Covered benefits include paid vacation time, compensated time off (or CTO), and paid sick leave, but would not include benefits such as paid holidays and paid bereavement leave.

Under the order, businesses are exempt and do not have to provide SPSL if they: (1) were closed or not operating for a period of 14 or more days after March 4, 2020, due to a city official’s emergency order because of the COVID-19 pandemic; or (2) provided at least 14 days of leave.

Covered Employees: The rules remind employers of recent changes to California law on classifying employees and independent contractors, noting that there is a rebuttable presumption that workers are employees and that they will follow California law on the issue.

Significantly, the order applies to non-Los Angeles-based employees who perform services in Los Angeles. The rules use as an example, an employee making monthly deliveries in Los Angeles, but who is unable now to do so or perform other work for the company. The rules do not, however, provide guidance as to whether a single prior delivery to Los Angeles would be sufficient to make the worker a covered employee. As discussed in our prior article, the order covers employees who perform any work in L.A.'s geographic boundaries for a covered, non-exempted employer if employed with the same employer from February 3, 2020 through March 4, 2020.

The rules also discuss whether and how the order applies to telecommuting employees. If an employee normally works outside Los Angeles, but is telecommuting inside Los Angeles, the law applies, as it does to employees who normally work inside Los Angeles but are telecommuting from outside Los Angeles. However, if an employee both normally works, and is telecommuting from, outside Los Angeles, the order does not apply.

Amount of SPSL for Non-Full-Time Employees:  Under the order, employees who work fewer than 40 hours per week and are not classified by the employer as full-time receive an amount of SPSL no greater than the employee’s average two-week pay over the period of February 3, 2020 through March 4, 2020. The rules provide that employers determine the SPSL amount by adding the number of hours worked in four consecutive weeks during this period, and dividing that total by 2.

Intermittent Use: According to the rules, employees can choose to use SPSL “periodically” until, overall, they use whatever amount of SPSL the order requires employers to provide. The rules do not provide the employer with discretion.

Verifying SPSL Use: Although the order does not allow employers to require employees to provide a doctor's note or other documentation to support an SPSL absence, they can require employees to verbally or in writing provide the reason for taking leave, e.g., child care, quarantine, vulnerable medical condition, caring for a family member. Employers cannot inquire into or require employees to describe or explain the illness or condition necessitating leave. The rules explain that an employer's policy should not be so difficult that it deters employees from legitimately using SPSL.

SPSL Pay Rate: The order did not address the rate of pay when employees use SPSL; instead, it simply refers to the employee's average rate of pay. The rules clarify that, to calculate the pay rate, employers use the employee's average two-week pay between February 3 and March 4, 2020. Additionally, the rules clarify that employers may exclude overtime premium pay from the calculation, but otherwise include the pay they receive when working overtime hours. For example, if an employee normally earns $15.00 per hour and works overtime, employers include the $15.00 but exclude any amount of additional pay (i.e., the overtime premium) the employee receives for working overtime (which can vary in California).

Recordkeeping: Under the rules, employers must keep documentation demonstrating their compliance, e.g., documentation showing they provide SPSL, and employee requests for SPSL, which should include the employee's name, date(s) the employee requests leave, the leave category, and whether the employer approves or denies a request and, if the latter, the reason for the denial. Additionally, the rules direct employers to keep documentation that substantiates any claimed exemption.

Retaliation: In addition to the numerous anti-retaliation protections the law provides, the rules note that additional forms of retaliation include, but are not limited to, reducing hours, demotions, less desirable reassignments, work locations or schedules, and denying or reducing other benefits.

Next Steps

With the rules, employers have more information concerning how the order operates. Although collectively the order and rules do not address all potential questions employers may have, they should help employers better craft or revise compliant policies, practices and procedures, which employers should consider implementing with the assistance of knowledgeable employment counsel.