Hello everybody. As most AOA members know, last year the State of California enacted a so-called “Sick Leave Law” to provide paid time off for California employees. Under that legislation, all employers who employ one or more individuals that work in California for 30 days or more per year must provide those employees with paid sick leave time off.
Recently, major cities in California, such as Los Angeles, Santa Monica, San Francisco, and Oakland, as well as some smaller ones, such as Emeryville, have enacted their own, more onerous sick leave ordinances.
My discussion this month will provide a refresher on California’s law and then explain the new sick leave law just enacted by the City of Los Angeles.
California’s Sick Leave Law
As stated above, every employer with a California employee who works more than 30 days per year must be provided with paid sick leave. Those 30 days of work do not need to be continuous for the law to apply.
Such sick days will accrue at a rate of no less than 1 hour for every 30 hours worked. Therefore, an employee who works in California for only 90 hours out of the year would accrue 3 hours of paid sick leave.
In general, to determine the amount of sick leave compensation the employee is entitled to receive, simply multiply the number of hours taken off by the employee’s hourly wage. For example, if the manager typically works 4 hours per day at $10.00 per hour, the employer must still pay the $40.00 even though the manager took off that amount of time to visit with his doctor.
The employer may limit the employee’s use of paid sick days to 24 hours or 3 days in each year of employment if such a limitation is properly provided in a written resident manager agreement. That means for the first 24 hours or 3 days of sick leave time taken off by the employee, the employer (whether it is the owner of the property or the management company) must pay the wages to which the employee would otherwise be entitled up to the first 24 hours or 3 days that the individual takes off for sick leave. But with a properly drafted limitation included in the resident manager agreement, the employer need not pay for any sick leave time exceeding 24 hours or 3 days.
The California sick leave law applies to all employers regardless of the number of employees that they hire. (Of course, there has to be at least one employee.) That means that even if the employer has just one employee, the employee is entitled to paid sick days in accordance with the legislation. There is no exemption for small employers. The State Legislature carved out a few exemptions as to categories of employees who are not covered under the new legislation, but none of those exceptions applies to resident managers.
For the sake of simplicity, I recommend that the resident manager agreement be drafted to include a provision which allows the manager to use 24 hours of sick leave immediately upon commencement of employment or anytime thereafter throughout either (a) the remainder of that calendar year or (b) the first 12 months of employment, and at any time during each 12 month period thereafter. By implementing that procedure, the employer can avoid calculating complicated accruals of the sick leave, which is also allowed by law, but would be an employer’s nightmare with respect to a resident manager.
When capping the number of hours or days of sick leave, a provision should be included in the resident manager agreement which provides that unused sick leave days are not carried forward to the succeeding year. Thus, the paid sick leave time will be akin to “use it or lose it.” That means if the employee does not take off any sick leave time, or takes off less than the allowable time per year, he or she is not paid for the unused time, nor is the unused time carried forward to the next year.
Unlike vested vacation pay, an employer is not required to provide paid sick leave to an employee for unused sick days after termination, resignation, retirement or other separation from employment. However, if the separated employee is rehired by the employer within one year from the date of separation, previously accrued but unused sick days are automatically reinstated.
Sick leave time must be compensated at the employee’s hourly wage. Although generally not the case with resident managers, if the employee is paid by commission or piece rate, or otherwise has a variable hourly wage, or is a non-exempt salaried employee, then the rate of pay is calculated by dividing the employee’s total wages (not including overtime premium pay) by the employee’s total hours worked in full pay periods in the prior 90 days of employment. Payment for sick leave must be made no later than the payday for the next regular payroll period after the sick leave was taken.
Sick leave time may be taken for the diagnosis, care or treatment of an existing health condition, or for preventative care (e.g., routine check-ups), of the employee or an employee’s family member. “Family member” includes a child, spouse, registered domestic partner, parent, grandparent, grandchild, or legal guardian of the employee.
Also, bear in mind that the sick leave Act has nothing to do with “Obamacare,” which is officially known as The Affordable Care Act.
Required Written Documentation
California’s sick leave legislation mandates that each employer at the time of hiring must provide the employee with certain written information, including: The rate of pay; whether the pay is by the hour, shift, day, week, salary, piece, commission, or otherwise; rates of overtime; allowances, if any, claimed as part of the minimum wage, such as lodging allowances [Think: Resident Managers who are given free or reduced rent as a credit against the wages to which they would otherwise be entitled]; the regular paydays designated by the employer; the name of the employer even if acting under a “dba” name; the physical address of the employer’s main office or principal place of business; the employer’s telephone number; the name, address and telephone number of the employer’s Workers’ Compensation Insurance carrier; a notice that the employee may accrue and use paid sick leave; and that the employee may not be terminated or retaliated against for using or requesting sick leave.
Numerous penalties may be imposed on the employers who violate California’s sick leave law, including the following: A civil penalty of up to $100.00 per offense; the dollar amount of paid sick days withheld to the employee multiplied by 3, or $250.00, whichever is greater, but not exceeding $4,000.00; administrative penalties of $50.00 per day, but not exceeding $4,000.00 in the aggregate; penalties to the State of California of an amount up to $50.00 per day if the violation is prosecuted by the Labor Commissioner; attorney’s fees incurred by the Labor Commissioner or the California Attorney General if either files a civil action in court; and so on.
One redeeming feature of California’s sick leave law relative to penalties is that an employer is not to be assessed any penalty for a violation due to an isolated or unintentional payroll error or an inadvertent mistake regarding the accrual or available use of paid sick leave.
In order for proper paid sick leave to be verified and penalties to be calculated, employers must retain for at least 3 years records documenting the hours worked and paid sick days accrued and used by each employee. The employer must make such records available to the employee for inspection, upon request. Penalties may be assessed if the employer does not retain those records.
While, the statewide law establishes minimum requirements, it does not preempt or limit other applicable laws that may provide greater sick leave benefits, such as Los Angeles’ paid sick leave ordinance.
LOS ANGELES’ NEW SICK LEAVE LAW
Effective July 1, 2016, the City of Los Angeles enacted its own sick leave law which imposes additional requirements on employers of California employees, including resident managers of apartment buildings. The law covers just about all employees who perform at least 2 hours of work in any particular week within the geographic boundaries of the City of Los Angeles. To ascertain whether an apartment building is located in Los Angeles for purposes of the new sick leave law, AOA members may type in the tenement’s address at the following website: http://neighborhoodinfo.lactiy.org.
Under the City’s ordinance, an employee is entitled to take up to 48 hours of sick leave annually, based either on a calendar year or every 12 months of employment. The 48 hours increases the amount of allowable sick leave time by double, up from 24 hours under the California law.
Also, unlike California law, Los Angeles provides that unused sick leave will carry over to the following year of employment. But it may be capped with a properly drafted resident manager agreement at 72 hours of sick leave time. Here is an example. If the manager does not use the paid sick leave that is earned during the calendar year of 2017, the 48 hours is carried over to 2018. On January 1, 2018, the employer may “front load” the 48 hours and add it to the 48 hours which would be available in 2018. That will total 96 hours. However, the employer may implement a cap which reduces the time by 24 hours to a total of 72 hours for 2018.
In determining the method of providing sick leave, the employer may select from either the “front loading method” or the “accrual method.” For most owners, implementing the accrual method is too complicated so I will not discuss it here. The better approach is a front loading method. That method works as follows: The employer selects one type of anniversary date, either at the beginning of each year of employment, the calendar year of employment, or any 12 month period. The employee may then take the whole 48 hours at any time during the term selected.
If the employee does not take all or some portion of those 48 hours, then the unused hours carry over to the following period of employment. That carry over is different from the California law which provides for a “use it or lose it” type of sick leave if the resident manager agreement provides for no carry over.
Similar to California law, the City of Los Angeles’ sick leave law includes time off used for the purpose of preventive care or diagnosis, check-ups, and treatment of existing health conditions. It also covers time off taken by the employee in connection with family members, including children, parents, spouses, registered domestic partners, grandparents, grandchildren and siblings.
July 1, 2016 was the effective date of the application of the Los Angeles sick leave law for employers with 26 or more employees in the City of Los Angeles. For employers with 25 or fewer employees in the City, the effective date of the paid sick leave ordinance is deferred until July 1, 2017.
What is important to remember is virtually every resident manager working in California is now entitled to receive paid sick leave time during each year of employment.
Owners and management companies should review each of their Resident Manager Agreements to be certain that they contain legalese that is consistent with the new sick leave laws of both California and individual cities. Most agreements drafted prior to 2016 should be updated or rewritten altogether. Bear in mind, resident managers are employees, not independent contractors, and are therefore entitled to paid sick leave time.
Dale Alberstone is a prominent litigation and transactional real estate attorney who has specialized in real property law for the past 39 years. He has been appointed to periodically serve as a judge pro tem of the Los Angeles Superior Court and is a former arbitrator for the American Arbitration Association. He also testifies as an expert witness for and against other attorneys who have been accused of legal malpractice.
Mr. Alberstone has been awarded an AV rating from Martindale-Hubbell. An AV rating reflects an attorney who has reached the heights of professional excellence and is recognized for the highest levels of skill and integrity. You may Google ADale S. Alberstone@ for further background.
The foregoing article was authored in September 2016. It is intended as a general overview of the law and may not apply to the reader=s particular case. Readers are cautioned to consult an advisor of their own selection with respect to any particular situation.
Questions of a general nature are warmly invited. Address correspondence to Dale S. Alberstone, Esq., Alberstone & Alberstone, 1900 Avenue of the Stars, Suite 650, Los Angeles, California 90067. Phone: (310) 277-7300.