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The Curious Case of Employment Arbitration Agreements

Lawyer for EmployersLawyer for Employers


by Tal Burnovski Yeyni



Oh boy, what a year 2016 is shaping up to be! Employers faced some daunting changes to: Sick Leave, California Minimum Wage, the DOL final rule  re salary thresholds and now – class action waivers. We feel like doing a Liz Lemon style “12 month rap wrap up”. But unlike Avery Jessup in 30 Rock, reading some US Weeklies won’t resolve the situation. (If you don’t understand, go watch ”The Return of Avery Jessup”. It’s hilarious!) 

Class Action LawsuitMeanwhile, in the real world, we noticed a trend in California to limit the scope of employment arbitration agreements. Two years ago the California Supreme Court ruled that PAGA (Private Attorneys General Act) representative claim waivers in employment arbitration agreements are unenforceable (Iskanian v. CLS Transp. Los Angeles, LLC (2014) 59 Cal.4th 348).

And last year the legislature attempted to pass AB-465 which would have prohibited employers from requiring employees to sign arbitration agreements as a condition of employment. Governor Brown however, vetoed the bill opining, in part, that “[A] blanket ban on mandatory arbitration agreements is a far-reaching approach...”

Last week the Ninth Circuit took part in the “arbitration debate” and held that Class Action Waivers in employment arbitration agreements are unenforceable. In Morris v. Ernst & Young LLP (9th Cir. 8/22/2016) No. 13-16599 plaintiffs brought a class action against the accounting firm Ernst & Young for misclassification,  FLSA (Fair Labor Standards Act) and California labor laws violations.

The professional services firm moved to compel arbitration pursuant to the arbitration agreements signed by plaintiffs, which contained a “concerted action waiver” requiring employees to pursue legal claims against E&Y exclusively through arbitration, and arbitrate only as individuals and in “separate proceedings.”  Plaintiffs argued the class action waiver was unenforceable as it violated the National Labor Relations Act (NLRA).

Section 7 of the NLRA guarantees the right of employees to engage in concerted activities. Section 8(a)(1) of the Act makes it an unfair labor practice for an employer "to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7" of the NLRA.

The Ninth Circuit in a majority decision agreed with plaintiffs and sided with the National Labor Relations Board (NLRB) position in Horton I, 357 NLRB No. 184, which held that an employer violates the NLRA “when it requires employees covered by the Act, as a condition of their employment, to sign an agreement that precludes them from filing joint, class, or collective claims addressing their wages, hours, or other working conditions against the employer in any forum, arbitral or judicial.”

The Majority opined that a lawsuit filed in good faith by a group of employees to achieve more favorable terms or conditions of employment is “concerted activity” under Section 7 of the NLRA and reasoned that “an employer violates § 8 (...) by conditioning employment on signing a concerted action waiver.” [Emphasis added]. 

Employment ArbitrationWith this decision, the Ninth Circuit teamed up with the Seventh Circuit which recently held that a class action waiver in arbitration agreements was unenforceable as it violated employees’ rights under the NLRA. Other circuits (the Second, the Eighth and the Fifth) held to the contrary, validating class action waivers in employment arbitration agreements. Due to the circuit split, it is likely the matter will be taken up to the U.S. Supreme Court. 

It will be interesting to see how California courts would handle the matter (if at all). Notably, while the California Supreme Court prohibited PAGA waivers in employment arbitration agreements it rejected the argument that class action waivers are unlawful under the NLRA (Iskanian, supra, 59 Cal.4th at 372). “As the Fifth Circuit explained, neither the NLRA’s text nor its legislative history contains a congressional command prohibiting such waivers.” 

Thus, on its face, it appears the California Supreme Court position regarding the enforceability of class action waivers currently differs from the Ninth Circuit’s recent ruling.

To be continued . . .

Tal Burnovski Yeyni is an attorney in our Employment Practice Group

This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.


California Ballot 2016: Pros and Cons of Props 51-56

Litigation Los AngelesEnvironmental Litigation  

Stephen T. Holzer


Californians must decide on 17 initiatives in the November election this year, and those are just the proposed measures of state-wide concern. Never mind the many local initiatives affecting counties and neighborhoods. The state props cover a range of topics like porn, drugs, guns, and death. Then there are the more tedious but still critical initiatives regarding bonds, legislative transparency, education, etc.

That’s a lot to think about, so we thought we’d break it down with a quick ballot reference guide. You’ll find a brief description of each measure, and then a who’s for, who’s against, and why section – with reference links for more information. (If you want the full text of each prop, click on the title for each measure.)

We begin the first segment in our 2016 Election Guide series: California Propositions 51-56, below. (Click Props 57-61 or Props 62- 67 to read about the others.)

Proposition 51: California Public Education Facilities Bond Initiative 

Should the state issue $9 billion in bonds for constructing or improving public schools educating students from Kindergarten through community college? The proposed funds generated would be allocated as follows: 

  • $3 billion to build new schools
  • $3 billion to modernize existing schools
  • $2 billion to buy, build, and improve community colleges
  • $500 million for charter schools
  • $500 million for technical education facilities 

Who’s Voting Yes on Prop 51?

Proponents of Prop 51 claim the state’s schools are deteriorating to the point of becoming unhealthy and unsafe for students; and that California’s last school bond initiated 10 years ago is now out of money. They also claim a current $2 billion backlog of improvement projects for seismic renovations, other safety concerns and technology needs.

Both the California Democratic and Republican parties, the California Chamber of Commerce, numerous school districts and state elected officials have endorsed this bill.

Who’s Voting No on Prop 51?

The opposition to Prop 51 describes its organization as a coalition of supporters of California taxpayers and educators opposed to sprawl and developer abuse. Their Facebook page posts links to more opposition from The Mercury News, East Bay Times, among others. Both articles cite Governor Jerry Brown who calls the referendum a “blunderbuss effort that promotes sprawl and squanders money that would be far better spent in low-income communities.”

The opponents also cite a need for better planning by local school districts, and for developers to foot their fair shares of the costs, noting that this initiative was bankrolled by the construction industry. 

Proposition 52: California Medi-Cal Hospital Reimbursement Initiative 

In order to receive federal Medicaid funding, the states must contribute their own money. California does this partly through the Hospital Quality Assurance Fee (HQAF) assessed on both public and private hospitals since 2009 – resulting in about $3 billion in federal funds disbursed annually for Medi-Cal programs. Some of the HQAF monies however, have been diverted into California’s general fund over the years. Prop 52 aims to make it harder for the state to divert hospital fees by requiring 2/3 voter approval before doing so.

Who’s Voting Yes on Prop 52?

The Yes on 52 Campaign says the hospital fee program is set to expire in 2018. The program generates about $3 billion in federal money for Medi-Cal (about $18 billion over seven years), which primarily benefits children, seniors and working families. Citing the Legislative Analyst’s Office, Yes on 52 further claims the program will save California $1.5 billion in costs for children’s health care by 2020, and increases support to local public hospitals. The state legislature will need voter approval to dip into the program.

Support for Prop 52 include the California Children’s Hospital Association, the California Association for Nurse Practitioners, both the Los Angeles and California Chambers of Commerce and various elected officials of both the Democratic and Republican parties.

Who’s Voting No on Prop 52?

Those who oppose Proposition 52 seem to be less organized but include the Service Employees International Union-United Healthcare Workers West, according to Kaiser Health News. The post cites SEIU-UHW’s director of governmental relations:

…SEIU-UHW supports the arrangement in principle but that the legislature is the most appropriate venue for deciding how to use the money raised. Lawmakers can respond to an evolving health care system, but if Californians vote directly on the hospital proposal, their decision would be harder to undo later…

Proposition 53: No Blank Checks Initiative 

Should bond projects that cost more than $2 billion require voter approval? Government projects of that amount or more that are billed to the state’s general fund already require voter approval – but revenue bonds do not. This initiative targets state over-spending by giving voters the right to greenlight or stop big ticket projects, and prevents large projects from being broken down into smaller jobs to get around voter approval requirements.

Who’s Voting Yes on Prop 53?

The Stop Blank Checks’ first priority is to keep elected officials from creating new debt to pay for multi-billion dollar projects, at the cost of California taxpayers. The Pro-Proposition 53 website says California’s debt exceeds $330 billion – the third worst of all the states. It also cites the cost of California’s high-speed bullet train: nearly $10 billion was approved by voters for the project, but costs are now estimated at $68 billion, which may be paid for through revenue bonds.

Dean and Joan Cortopassi – owners of large food and agri-businesses based in Central California, are the initiative’s primary supporters.

Who’s Voting No on Prop 53?

The opposition is much bigger than the support so far. The No on Prop 53 faction claims the initiative will take away local government’s ability to issue revenue bonds to make improvements. For example, voters in Northern and Central California could theoretically vote against raising funds to improve the sewer system in Encino, if it comes with a price tag of over $2 billion. On a larger scale, can Los Angelenos wait up to two years to vote on I-405/US 101 interchange repairs after a devastating earthquake? (Presumably the federal or state governments would provide emergency funding in such a scenario.)

The opposition to Prop 53 include the Association of California Water Agencies, State Sheriff’s Association, League of California Cities, California Chamber of Commerce, California Hospital Association and others. 

Proposition 54: California Legislature Transparency Act 

If this initiative is approved, the legislature would be required to publish every bill (except some regarding emergency measures) in print and online at least 72 hours before a legislative vote; and to record public proceedings to be posted online within 24 hours of the proceedings. Members of the public may also record these public proceedings. All recordings, whether made by legislators or private persons, may be used for any legitimate purpose.

Who’s Voting Yes on Prop 54?

This one gets bipartisan support. The Yes on Prop 54 coalition cites a need to rein in special interest groups who have a history of getting 11th hour revisions made to bills benefitting themselves – without giving lawmakers an opportunity to read, or the public an opportunity to comment on those changes. The audiovisual recordings stipulations provide a record of proceedings, since most members of the public are unable to attend those proceedings and thus have no opportunity to comment.

The bill is supported by the California Chamber of Commerce, the California State Conference of the NAACP, and the state’s League of Women Voters, among others.

Who’s Voting No on Prop 54?

There is a group pushing for a no vote, for the same reason, believe it or not: to deny special interest groups. The No On Proposition 54 alliance says the bill will hinder legislators in developing bipartisan solutions; 72 hours gives special interest groups more time to launch a counter-attack, and it will be more difficult for lawmakers to take action in emergencies.

The group counts the state’s Democratic Party, Labor Federation and others among those who want to defeat the initiative. 

Proposition 55: California Children’s Education and Health Care Protection Act of 2016 

About $6 billion per year was raised when voters approved Proposition 30 back in 2012, through increased taxes imposed on those earning more than $250,000 per year, and through an increased sales tax. The money benefitted K-14 education (11 percent to community colleges; the remaining to grade, middle and high schools). Under Prop 30, the personal income tax increase will expire in 2019, and the increased sales taxes will expire the end of this year.

Prop 55 maintains the current tax rate on high-income individuals and couples for an additional 12 years. (The sales tax is not addressed in this measure and will presumably sunset on December 31st.) Additionally, the measure will allocate up to $2 billion to healthcare programs for children and their families in certain years.

Who’s Voting Yes on Prop 55?

The Yes on 55 Help Our Children Thrive website claims the reversion to a lower income tax rate on high earners will cost California schools about $4 billion per year, and that all taxpayers will benefit when the sale tax increase (0.25 percent) expires.

Yes on 55 is chiefly supported by the Association of California School Administrators, California Federation of Teachers, and the California Medical Association.

Who’s Voting No on Prop 55?

An organized opposition force doesn’t seem to exist at this time, but the California Chamber of Commerce recommended a no vote on Prop 55 last May. The Chamber doesn’t like the virtual permanency of what was supposed to be a temporary tax increase, and cites a state surplus of $3 billion, a proposed balanced budget by Governor Jerry Brown, and the volatile nature of personal income tax revenues. In short, the Cal Chamber characterizes the higher taxes as unnecessary. 

Proposition 56: California Healthcare, Research and Prevention Tobacco Tax Act of 2016 

This is a proposal to raise cigarette taxes by $2.00 per pack to fund healthcare, tobacco use prevention, tobacco-related medical research and law enforcement. Other tobacco products and nicotine e-cigarettes will be similarly taxed. The current tax on tobacco is $0.87 per pack – the lowest in the nation.

Who’s Voting Yes on Prop 56?

The Yes on 56 organization says the tax will reduce youth smoking, help fight cancer, and only target tobacco and nicotine users. Citing studies, they claim 90 percent of smokers start using tobacco as teenagers, and that flavored e-cigarettes are targeting that age group. Additionally, Yes on 56 says every ten percent increase on cigarette costs has a direct correlation to reduced teen smoking – a seven percent drop.

Yes on 56 is endorsed by the American Cancer Society’s Cancer Action Network, the American Heart Association, the American Lung Association, as well as various other health, dental and business groups.

Who’s Voting No on Prop 56?

A few websites by tobacco and vaping, or e-cigarette concerns are showing opposition to this measure, and a Sacramento Bee article reports a $17 million effort to defeat Prop 56. An organization called Not Blowing Smoke has taken to social media, particularly Instagram, to make their points, including: 

  • Government and pharmaceuticals will lose money when smoking rates decline;
  • The bill is full of loopholes – revenues could be used to fund other projects not related to tobacco use;
  • Over 9 million smokers in the U.S. have traded in their cigarettes for less harmful vape products – but a nearly 70 percent tax increase could hinder those transitions. 

A seemingly more organized effort to defeat the tobacco tax encourages voters to “follow the money” – claiming it’s the health insurance companies and special interest groups will benefit financially. The Stop the Special Interest Tax Grab is fronted by Phillip Morris, R.J. Reynolds and a “coalition of taxpayers, educators, healthcare professionals, law enforcement, labor and small businesses.”

Check back with us: we’ll tackle initiatives to regulate felony parole, bilingual education, campaign finance, pornography and prescription drugs – Props 57-61 next.

Stephen T. Holzer is the Chair of our Environmental Practice Group and a business litigation attorney. 


This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.


Game Changer? Succession Planning Targeted by IRS

by Michael Hackman and Kira S. Masteller

Tax Attorney EncinoCertified Tax Law Specialist Trusts & Estate Planning

The Department of the Treasury wants to place limitations on valuation discounts that are currently commonly used to reduce asset values in family-owned and closely-held businesses, in an effort to increase tax revenue. The Treasury released proposed new regulations to that effect last week. If approved, the Regulations would revise Internal Revenue Code Section 2704.

Under current rules, through estate planning, individuals can transfer significant assets to the next generation at discounted values – primarily by transferring fractional interests in real property and businesses. Generally, family relationships are disregarded when determining the fair market value of an asset at the time of transfer.

The fractional interests – let’s say 10 percent limited partner interests in a Family Limited Partnership (FLP) with a net value of $4 million are transferred to each of four children – the interests are characterized as having lack of control and lack of marketability. Such characterizations have allowed appraisers to justify significant, so called minority discounts regarding the fair market value of the  minority interest in a business.

For example, if the FLP interest is appraised at a 25 percent discount, each of these gifts with an underlying value of $400,000 would be valued for estate or gift tax purposes at $300,000.

If the Treasury Department’s proposals are enacted, and this could happen by year end, key trust and estate planning tax-saving vehicles will be less effective, or curtailed altogether. The new Regulations could also affect the terms of an entity’s operating or partnership agreement. 

There is no doubt that if these regulations go into effect, they will be vigorously challenged by estate planning attorneys. While these challenges will be based on a variety of technical arguments, there is no assurance that they will prevent the IRS from taking the proposed action. 

There also is no way to predict how these regulations might affect discount appraisals. The key to obtaining a significant discount is to obtain a proper appraisal that has an additional discount analysis. Appraisers may be less willing to confirm aggressive discount appraisals in light of the proposed regulations. 

In any case, family business and property owners who intend sometime to give or leave their business or property to family members should strongly consider taking advantage of the presently available discounts before the new roadblocks are placed in their way.


Michael Hackman is a Certified Specialist in Tax Law, and Chair of our Tax and Trusts & Estate Planning Practice Groups. Kira S. Masteller is a Shareholder in our Trust & Estate Planning Practice Group. 

This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.


Pokemon Go Away: Monsters Creating Nuisance Problems

Business LitigationReal Estate Litigation Attorney


by Nicholas Kanter


This game has been all the rage since July. Engadget reports over 100 million downloads of Pokemon Go, racking up $10 million each day in revenue for game makers Niantic, The Pokemon Company and Nintendo. It’s a beast. And pretty profitable, despite the legal questions that keep popping up in, for example:

  1. Employment

  2. Pokemon Go Nuisance Law
  3. Family Law

  4. Privacy

  5. Personal Injury

Most players will attempt a bit of care when hunting monsters, and won’t usually play at work, abandon their children or cross streets blindly to net an Augmented Reality (or AR, a real-world environment that has been digitally augmented or enhanced) creature. We hope.

However, there’s a growing legal concern surrounding this game even for people who haven’t downloaded Pokemon Go yet – that of nuisance issues.

The game works using a cell phone’s camera, GPS and gyroscope technology. Game developers programmed “Pokestops” and “Pokemon gyms” into geographical locations – a player who downloaded the app will be able to detect these locations and then be lured into attempting to capture AR monsters and monster-catching weaponry by swiping at their mobile screens at these Pokestops, or take on other players at the gyms.

A homeowner in New Jersey recently filed a class action lawsuit in California against the game’s developers. In the lawsuit, Jeffrey Marder claims Pokemon Go developers

  1. Programmed many of the stops and gyms on or near private property;  

  2. These stops and gyms were created without the property owner’s permission; and that

  3. Trespassers are inhibiting the owners’ enjoyment and use of their properties, constituting nuisances.

Marder cites several other property owners facing nuisance problems because of the game, including a Massachusetts homeowner who tweeted his experiences of living at an unauthorized Pokemon gym. Three days after the games release, Boon Sheridan counted over 30 people approaching his property on foot, not to mention a marked increase in vehicular traffic – all in the name of the game.

The actual number of members of the class action is as yet unknown. But what are the chances of Marder succeeding?

Monsters in the Yard: Pokemon Go Spawning Nightmares for Homeowners, Businesses

Property owners may bring common law trespassing suits against individuals who set foot on private property without permission, or they may file public nuisance claims similar to Marder’s suit above. 

Another example of a public nuisance claim would be the City of Irwindale’s lawsuit (now dropped) against the makers of Sriracha hot sauce, Huy Fong Foods Inc. The city claimed the sauce’s odor irritated residents’ eyes, noses and throats. One Irwindale family claimed a need to move a birthday party indoors because of fumes –affecting that family’s enjoyment and use of property.

In any case, private and commercial property owners have the right to protect their holdings, and their enjoyment of such holdings.

For business owners and governments that own or manage properties, whether they be coffee shops or landmarks like the Washington D.C. Holocaust Museum, there is a duty to keep environments safe for visitors. Businesses and tourist sites may be covered by a commercial general liability policy – but that doesn’t mean property owners or managers should turn a blind eye to potentially escalating problems caused by AR games like Pokemon Go.

Homeowners can always pursue individual trespassers, but that could become costly and time-consuming when so many encroach on a property. And neighbors close to a Pokestop or gym may have their own beefs because of increased vehicular and foot traffic.

Whether a private or commercial property owner, there are some alternatives to suing the game makers or Pokemon Go players: 

  1. Submit a Pokemon Go request form. The form can be used whether you want to add a stop or gym to a property, or remove one. No word yet on how effective this method may be, but if things do come to a litigation phase, proof of a request, or repeated requests, may help your case.

  2. Post signage. No trespassing signs may deter many players, and liability may be greater for a trespasser that ignores an explicit warning.

  3. Enlist help from local governments. Increased traffic of any kind can congest roads and hinder access for emergency and utility services. Convincing city officials to help could carry more leverage.


Nicholas Kanter is a Real Estate and Business Litigation attorney. 

This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.


Employers' Guide to Los Angeles' Sick Leave & Minimum Wage Ordinance

Employment Defense

by Tal Burnovski Yeyni



Most Los Angeles employers know the City Council implemented a new sick leave ordinance for employees working within the City of L.A. on June 2016.

However, as the Sick Time Benefits section was added to an existing Minimum Wage Ordinance, there has been some confusion over definitions and compliance dates.

Last week the City published revised FAQs and updated Regulations which shed some light over unanswered questions. Here is what we know about the City of Los Angeles Sick Leave Ordinance as of now: 

  • “Employee”: Section 187.04(A) of the Ordinance states that “every employee ... is entitled to paid sick leave”. The FAQs clarify that an Employee is: 

1. “any individual who performs at least two hours of work in a particular week within the geographic boundaries of the City of Los Angeles”; and

2. “... entitled to payment of a minimum wage from any Employer under the California minimum wage law...”

Accordingly, exempt employees are excluded from the definition of Employee under the Minimum Wage and Sick Leave Ordinance and not entitled to sick leave benefits under the Ordinance. Note, however, that exempt employees working within the City of Los Angeles are entitled to sick leave benefits under the California Healthy Workplace Healthy Family Act of 2014. Employees outside the City of Los Angeles might also be covered under another local ordinance (e.g., San Diego, Santa Monica, San Francisco, etc.) 

  • Los Angeles Sick Pay“Particular Week”: The Regulations explain that Particular Week “means any seven (7) consecutive days, starting with the same calendar day each week. “Week” for the purpose of the [Ordinance] ... shall be a fixed and regularly occurring period of seven (7) consecutive 24-hour periods which is equivalent to a period of 168 hours.

  • “30 Days Requirement”: To be eligible for sick leave under the Ordinance, an Employee [as defined above -- i.e., works two (2) hours within the City and entitled to minimum wage] must work within the City for the same Employer for 30 days or more within a year from the start of employment.

  • Employees Working in L.A. Sporadically:  As explained above, to be eligible for paid sick leave under L.A. Ordinance, an individual must meet the definition of Employee and work within the City of the same employer for 30 days or more within a year from the start of employment. But what happens when an Employee works in-and-out of the City?

    The Regulations offer the following explanation: “If an Employee continuously works for an Employer with only sporadic work time within the geographical boundaries of Los Angeles, ‘commencement of employment’ means the initial start date by the Employee for the Employer. The ‘year’ or 12 month period begins [on] the first ‘day’ the Employee works in the City. If the Employee has not worked a total of 30 days within that 12 month period, the Employee does not qualify for Sick Time Benefits".

    Accordingly, to determine whether Employers have to start complying with the Ordinance, Employers must track employees’ work within the City. Note that even as little as 10 minutes of work within the City is considered a work day. Once an Employee has 30 days of work for an Employer within the City, the Employee is eligible for sick leave benefits.

  • Compliance Date Based on Employer’s Size:  Section 187.04(A) of the Ordinance states that “Every employee who, on or after July 1, 2016, works it the City ... is entitled to paid sick leave.

    This was interpreted to mean that all Employers, regardless of size, must start complying with the Sick Leave Ordinance as of July 1, 2016. Wrong. The FAQs state there is a deferral schedule based on the size of the employer: “Paid sick leave applies on July 1, 2016 for Employers with 26 or more Employees, including Non-Profit Corporations with or without the minimum wage rate deferral. Paid sick leave applies on July 1, 2017 for Employers with 25 or fewer Employees.

  • Determining Size: The size of an Employer’s business shall be determined by the average number of Employees employed during the previous calendar year rounded up to the next whole number of Employees.  The Office of Wage Standards (OWS) recommends small businesses to complete the MW-2 Small Business Deferral Eligibility Worksheet, which can assist Employers in determining eligibility.

    An Employer should not submit MW-2 to the OWS, but instead retain it with supporting documents in the Employer’s records. Supporting documents may include, but are not limited to: Payroll records; Timesheets and/or attendance records; Quarterly Contribution Return and Report of Wage (DE9 and DE9Cs); Report of New Employees (DE 34).

  • Hours per Year: An eligible Employee is entitled to take up to 48 hours of paid sick leave annually. However, as with California Law, an Employee may use sick leave on or after 90 days of the first day of employment or July 1, 2016, whichever is later.

  • Calculating Methods:
    Front Loading Method: An Employer who chooses to provide sick leave based on the front-loading method must select one type of anniversary, either at the beginning of each year of employment, calendar year, or 12-month period. At each anniversary date, an Employer shall provide all 48 hours to an Employee.

    An Employer who uses the front-load method on a calendar year basis (January through January) may on July 1, 2016 (and only for the calendar year of 2016) provide 24 hours of sick leave for the period covering July 1, 2016 to December 31, 2016. On January 1, 2017, the Employer must front-load the full 48 hours.

    Accrual Method: An Employer who chooses to provide sick leave based on the accrual method must provide the Employee one (1) hour of sick leave per every thirty (30) hours worked. An Employee’s hours worked within L.A. must be tracked. The Regulations provide the following example for accrual: “a full-time Employee working a 40-hour work week within City boundaries (160-hours a month) will accrue 5.33 hours which must be available for use no later than 90 days after the first day of employment.

    Employers may select either the front-loading method or accrual method and may switch between the front-loading method or the accrual method only on an annual basis.

  • 72 Hour Cap: Unused sick leave, either accrued or front-loaded, must be carried over to the following year, but the Employer may cap carry-over (and accrual) at 72 hours. This is where the L.A. city ordinance substantially differs from California law, which does not require carry-over when sick leave time is front-loaded.

  • Permissible Uses: The Sick Leave Ordinance allows employees to take paid sick leave for all permissible uses under the Healthy Workplace Healthy Family Act of 2014, and to care for “any individual related by blood or affinity whose close association with the Employee is the equivalent of a family relationship.” However, it is unclear what an “individual related by blood or affinity” means.

  • Doctor’s Note: While California Law is silent on whether Employers can require Employees to provide documentation, the FAQs state that documentation is allowed only after an Employee has used more than three (3) consecutive days of sick leave. A demand to provide description or explanation of the illness or condition necessitating the Employee’s leave is prohibited.

  • Geographic Boundaries:  The FAQs also refer to a new map which could help determine if a specific address/workplace, is within the City of L.A. ( “If an address is located within the boundaries of the City of Los Angeles and is correctly entered, then the search will locate the address on the map with detailed address information.” 

The FAQs and Regulations also contain helpful and important information concerning the Minimum Wage section of the Ordinance.

For example, the Regulations state any changes in the number of Employees shall not impact the Employer’s status as a small business for purposes of the Minimum Wage deferral schedule. If an Employer’s average number of Employees from the previous calendar year was twenty five (25) or fewer, it shall pay based on the deferral schedule regardless of the changes in number of Employees for duration of the minimum wage schedule.

There is also valuable information concerning tracking of Employees’ time for work performed within the City and recommendations concerning required documentation regarding Employees’ hours.  

Employers can also visit for additional information, relevant notices,  posters and helpful charts.

Changes to Federal Employment Postings

Last week the U.S. Department of Labor announced changes to two mandatory posters, which go into effect immediately. As of August 1, 2016, employers must post the revised versions of the Federal Minimum Wage notice and the Employee Polygraph Protection Act notice. You can find revised notices here and here.

If you have questions concerning compliance with the Minimum Wage and Sick Leave Ordinance or other local ordinances and California Laws, contact employment defense counsel as soon as possible.


Tal Burnovski Yeyni is an attorney in our Employment Practice Group

This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

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