COVID-19: LA City Council Approves Ordinances on Sick Leave and Retail and Delivery Workers

The Los Angeles City Council held an emergency meeting on March 27 in response to the coronavirus (COVID-19) crisis and approved several ordinances, including one pertaining to sick leave and another relating to retail and delivery workers. The council tabled two controversial proposals that would subject employers to various obligations to retain and recall employees during and after the COVID-19 threat period.

One of the approved ordinances mandates that large businesses, not subject to the emergency sick leave and extended family medical leave provisions in the Families First Coronavirus Response Act (FFCRA), provide sick leave to all of their Los Angeles-based employees. Another ordinance provides certain protections for workers at grocery, drug retail, and food delivery platforms. Both of these measures are awaiting signature by the mayor, and will only apply to those employees who work within Los Angeles city limits.

The council debated at length whether the Los Angeles sick leave ordinance should apply to smaller employers, including those with fewer than 50 employees. (Although employers with fewer than 50 employees are subject to the FFCRA emergency sick leave and extended family medical leave mandates, those small employers may apply for an exemption to the application of the FFCRA mandates.)

Sick Leave

The City Council passed an ordinance, Article 5-72HH the COVID-19 Supplemental Paid Sick Leave Ordinance (SPLSO), requiring large employers (with 500 or more employees nationwide) to provide their employees working in the city of Los Angeles with two weeks of “Supplemental Paid Sick Leave” for COVID-19-related reasons, in addition to any sick leave required under federal and/or state law. The ordinance contains an urgency clause and shall become effective immediately upon publication.

The SPSLO will require any large employer to provide eligible employees with Supplemental Paid Sick Leave for any of the following reasons, upon oral or written request:

1. A public health official or healthcare provider requires or recommends that the employee isolate or self-quarantine to prevent the spread of COVID-19
2. The employee is at least 65 years old or has a health condition such as heart disease, asthma, lung disease, diabetes, kidney disease, or weakened immune system
3. The employee needs to care for a family member who is not sick but who public health officials or healthcare providers have required or recommended isolation or self-quarantine
4. The employee needs to provide care for a family member whose senior care provider or whose school or childcare provider caring for a child under the age of 18 temporarily ceases operations in response to a public health or other public official's recommendation. (It is noteworthy that all California schools are projected to be closed throughout the remainder of the school year.)

This Supplemental Paid Sick Leave is available to all employees, whether or not full-time, calculated using an employee’s average two-week pay over the period of February 2, 2020, to March 4, 2020, as follows:

• An employee who works at least 40 hours per week, or is classified as a “full-time” employee, shall receive 80 hours of Supplemental Paid Sick Leave. The pay rate shall be calculated based on the employee’s average two-week pay over the period starting February 2, 2020 through March 4, 2020.
• An employee who works less than 40 hours a week and is not classified as “full-time” shall receive Supplemental Paid Sick Leave in an amount no greater than the employee’s average two-week pay over the period starting February 2, 2020, through March 4, 2020.
• The definition of employee is expansive and includes all workers. The burden is on the employer to establish that a worker is an independent contractor and not an employee for this purpose.
• Supplemental Paid Sick Leave is capped at a maximum of $511 per day and $5,110 in the aggregate.

Key Details and Takeaways for Employers:

• The SPSLO is specifically intended to address large employers (with 500 or more employees nationwide) that are not covered by the federal Families First Coronavirus Response Act.
• Supplemental Paid Sick Leave is available to all employees who were employed from February 2, 2020, to March 4, 2020.
• Employers are prohibited from requiring employees to provide any documentation (including a doctor’s note or note from a child’s school) to support requests for Supplemental Sick Leave.
• The SPSLO defines a covered “employee” as “any individual who performs any work within the geographic boundaries of the City [of Los Angeles] for an Employer.” The SPSLO applies to any employees who perform work inside the city boundaries, even if the employer is not located within city boundaries. Unlike the city’s minimum wage ordinance, there is no minimum threshold for hours worked within Los Angeles.
• The SPSLO allows for offsets against certain paid time off hours provided to employees for qualifying reasons on or after March 4, 2020.
• All or part of the SPSLO may be expressly waived by a collective bargaining agreement, but the agreement’s language must be “in clear and unambiguous terms.” This differs from the current federal law test for interpreting collective bargaining agreements, one fact that may form the basis of a preemption challenge.
• First responders and certain healthcare providers (as defined in the SPSLO, but relying in part on federal law) are exempt from the SPSLO. Depending on the interpretation of “health care provider” arising from recent US Department of Labor actions, the exemption might cover only physicians and nurse practitioners or it might extend more broadly.

Grocery, Drug Retail, and Food Delivery Workers

The City Council also voted to approve the Grocery, Drug Retail, and Food Delivery Worker Protection Ordinance (Article 3-7MM). It applies to grocery retail stores, drug retail stores, and food delivery platforms operating within the city of Los Angeles. Food delivery platform workers are presumptively considered employees under this ordinance. The ordinance requires these employers to provide their employees with the following:

• Schedule changes: Employers shall approve an employee’s request to change a work schedule (1) to provide daycare for the employee’s own child, (2) to care for a sick member of the employee’s immediate family or household, or (3) if the employee feels ill, exhibits a symptom of COVID-19 as identified by the CDC, or suspects having been exposed to COVID-19
• Additional hours: before hiring a new employee or using a contract/temp/staffing agency to perform work, an employer shall first offer the work to current employees if (A) the current employee is qualified to do the work as reasonably determined by the employer, and (B) the additional work hours would not result in the payment of a premium rate under CA Labor Code Section 510

Under the ordinance, retaliation is prohibited. Employers may not discharge, reduce compensation, reduce work hours, or otherwise discriminate against any employee for opposing any practice proscribed by this article or for seeking to enforce their rights under this article.

An employer claiming a violation of this article may bring an action in the Superior Court of the State of California and may be awarded

• reinstatement;
• back pay;
• other legal or equitable relief as the court may deem appropriate;
• attorney fees and costs, if the employee is the prevailing party

A waiver of these rights shall be deemed contrary to public policy and unenforceable.

Employees’ Right of Recall and Workforce Retention (Tabled)

Facing heavy opposition from business groups, two controversial measures relating to employment recall and retention were tabled without opposition. The first would effectively give employees seniority rights in being recalled by their employer. The second would essentially cause new employers having purchased or assumed the business of a prior defunct employer to be required to hire the predecessor’s workforce. However, as these measures relate to how businesses may rehire workers whenever the COVID-19 crisis subsides, they will likely come back to the council’s consideration. Both present some pre-emption issues as drafted currently.

Right of Recall

The first of the tabled measures was titled COVID-19 Right of Recall (Article 4-72J-B), and would have required employers to offer to any laid-off worker any position that becomes available after the effective date of the ordinance, relating to layoffs retroactively to March 4, 2020. If it had passed, the ordinance would have

• stipulated that a covered layoff would be one that resulted from a “lack of business, a reduction in work force or other economic, non-disciplinary reason”;
• created a rebuttable presumption that any termination occurring on or after March 4, 2020, was due to a non-disciplinary reason, shifting the burden to employers to defend layoffs;
• required employers to rehire on the basis of seniority, i.e., the worker that had the greatest length of service with that employer, and be for the same or “similar” position, or a position for which the employee “could be trained”;
• applied only to employers with revenues that exceeded $5 million.

Additionally, the measure would have allowed a laid-off worker to bring an action against an employer for an alleged violation of the ordinance, with hiring and reinstatement rights, actual damages, and punitive damages.

Various councilmembers expressed concern about the lack of definition in the proposed ordinance, including the provisions on training, seniority, retroactivity, and the burden on employers to disprove a claim when an employee had been terminated for disciplinary reasons after March 4, 2020. Objections were also expressed to the punitive damages provision

The other tabled measure was the Worker Retention Ordinance (Article 4-72J-B), relating to businesses that go through a change in ownership. It would have required successor employers to retain previous employees for a minimum of 90 days and to give priority to laid-off employees on a “preferred” employee list for six months from which to hire. Both this and the recall ordinances would not have applied to managers and supervisors.

Coronavirus COVID-19 Task Force

For our clients, we have formed a multidisciplinary Coronavirus COVID-19 Task Force to help guide you through the broad scope of legal issues brought on by this public health challenge. We also have launched a resource page to help keep you on top of developments as they unfold. If you would like to receive a daily digest of all new updates to the page, please subscribe now to receive our COVID-19 alerts.

Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Century City
Harry I. Johnson, III

Los Angeles
Jacqueline C. Aguilera
Joseph Duffy
Kathryn T. McGuigan
Sheryl K. Horwitz

Orange County
Carrie A. Gonell
Daryl S. Landy