If you have a single employee who works for two hours or more in a week in the city of West Hollywood, California, get ready for significant changes that take effect on July 1, 2022, that will impact your West Hollywood employees. This ordinance applies to employees who work remotely from their homes or locations in West Hollywood, even if their employer is outside of West Hollywood. However, it does not include those that traverse West Hollywood without stopping.

Of greater significance than the new minimum wage for West Hollywood employees that exceeds that of California (discussed further below), is West Hollywood’s mandate that employees be provided with up to 96 hours of paid leave per year and up to an additional 80 hours of unpaid leave. Because this ordinance is untested, employers should discuss how this new leave fits into other paid and unpaid leave requirements such as Paid Sick Leave, FMLA, CFRA, disability leave, and COVID Supplemental Paid Sick Leave and should also review the Minimum Wage Ordinance Administrative Regulations that were published recently. Moreover, the paid leave accrues to a cap of 192 hours, and once an employee hits the cap, they are to receive a cash payment every month for accrued paid time off during that month. In other words, employees who cannot add more paid leave to the paid leave bank will receive a check equivalent to approximately 7.4 hours. Employers may not require employees to cash out the paid time off but may allow employees to do so.

Paid time off may be used for paid sick leave, vacation or personal necessity, and an employer may not “unreasonably” deny an employee’s request to use the paid time off. Unpaid time off does not accrue beyond 80 hours, and like paid time off, an employer may not “unreasonably” deny an employee’s request to use it. Unpaid time off may be used as sick leave after an employee has exhausted paid time off for either the employee or his or her immediate family member’s illness as defined by the CFRA.

Employers should discuss with counsel minimum increments for use of leave and notice requirements so that the employer is not left shorthanded or facing a claim that leave was unreasonably denied.

Both paid time off and unpaid time off are to accrue weekly for full-time employees and proportionally to full-time work for employees working less than 40 hours in any week for the employees’ work in West Hollywood starting July 1, 2022.

The ordinance asserts that only Collective Bargaining Agreements that expressly and unambiguously waive the ordinance will be exempt. Moreover, the ordinance provides a private right of action for employees to prosecute violations, including a $100/day penalty/day of violation of the ordinance, attorneys’ fees, and if the violation is intentional, the potential recovery trebles.

Employers with employees who work in West Hollywood should be prepared to increase minimum wages every six months until July 1, 2023, and annually thereafter under the Non-Seasonally Adjusted, All Items Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI) which may increase by at least 1% and a maximum of 4%. The ordinance provides for the following minimum wage rates:

Not only must employers be ready for these changes, but employers should ensure that they have plans for accurate paystub reporting in place to provide the information to their West Hollywood employees.