In January of 2016, the Santa Monica City Council adopted a wide-reaching ordinance that will raise the city’s minimum wage and impose paid sick leave requirements that exceed the state’s paid sick leave statute. The ordinance also establishes an even higher minimum wage for hotel workers. The city established a minimum wage working group to make further recommendations on the ordinance. Absent working group consensus on specific changes, the ordinance will take effect on July 1, 2016.

Minimum wage. Beginning on July 1, 2016, all employers that employ 26 or more employees will be required to pay a minimum wage of $10.50 per hour to all employees who work at least 2 hours per week within the city’s geographic bounds. The minimum wage will then increase as follows:

• $12.00 per hour on July 1, 2017,
• $13.50 per hour on July 1, 2018;
• $14.25 per hour on July 1, 2019; and
• $15.00 per hour on July 1, 2020

The law gives employers with 25 or fewer employees a one-year lag period and will note require them to pay the $10.50 minimum wage rate beginning on July 1, 2017.

Beginning July 1, 2022, the Consumer Price Index determines the minimum wage increase.

Paid sick leave. Employers must provide employees with 1 hour of paid sick leave for every 30 hours worked, up to a maximum of 72 hours for employers with 26 or more employees, and a maximum of 40 hours for employers with 25 or fewer employees. Employees may use their accrued leave beginning 90 days after starting employment, and employers need not pay out sick leave at separation.

The ordinance also includes notice and posting requirements and a three-year record retention requirement.  Employers will be required to directly pay employees any service charges and surcharges. The ordinance prohibits employers from retaliating against employees who exercise their rights under the ordinance. The ordinance also includes provisions specifically aimed at hotel-employers. In addition, the ordinance includes a collective bargaining opt-out provision. These and other details on the ordinance can be found on our recent article, “Santa Monica Adopts Minimum Wage and Sick Leave Ordinance for Hotel Workers.”