California law provides for mandatory paid sick leave under the Healthy Workplaces, Healthy Families Act (the state law). You are required to comply with both the ordinance and the state law.

• Effective January 1, 2024, the state law overrides the following provisions in any local paid sick leave ordinance that is contrary to the state law:

• No requirement to pay out unused sick leave balances upon termination;
• Reinstatement of unused balances for employees rehired within a year;
• Employers’ ability to choose to advance paid sick leave prior to accrual;
• The requirement to set forth available balances on an employee’s wage statement or other writing accompanying the employee’s paycheck;
• The rate of pay at which paid sick leave must be paid;
• Requirements for notice for foreseeable and unforeseeable usage of paid sick leave;
• Timing of payment of paid sick leave when used.1

Otherwise, when the two laws differ, you must follow whichever is more generous to employees.

The ordinance establishes minimum requirements pertaining to SMSL. You may provide more generous leave than the ordinance requires.

You can find more information regarding the ordinance at the city's Minimum Wage Web page. You may also contact the Public Information Officer by phone at (310) 458-8301 or by email at minimum.wage@smgov.net. Rules and Regulations and Frequently Asked Questions (FAQs) pertaining to the city’s MWO are also available.

Employers Covered Under the Ordinance

The ordinance applies to all employers, regardless of size. The ordinance applies to for-profit and not-for-profit companies. The ordinance does not apply to Employers that are government agencies, including federal agencies, cities, counties, school districts and all other public entities.2

"Employer" is defined by the ordinance as "any person, including a corporate officer or executive, association, organization, partnership, business trust, and limited liability company or corporation, who directly or indirectly, or through an agent or any other person, including through the services of a temporary service or staffing agency or similar entity, employs or exercises control over the wages, hours or working conditions of any employee."3

Employees Entitled to the Benefit

A covered employee (employee) under the ordinance is any employee who works for at least two hours in a particular week in Santa Monica and who is entitled to minimum wage under California state law.4 Part-time, full-time and temporary employees are covered. Exempt employees under California law, such as executive, administrative and professional employees and outside salespeople, are not entitled to minimum wage under California state law, and therefore may not be covered by the definition of an “employee” in the ordinance. However, exempt employees are still covered by the state law. Employers considering not providing exempt employees with SMSL are advised to consult legal counsel.

The ordinance does not apply to employees covered by a valid collective bargaining agreement if the ordinance requirements are expressly waived in clear and unambiguous terms.5

• The state law has different rules regarding employees covered by a collective bargaining including a requirement that employees will need to be afforded certain rights under the state law. For more information on how to treat employees with collective bargaining agreements under the state law, see the HR Library’s Employees Entitled to the Benefit page.

Calculating Leave – Employer Options

The ordinance offers you two different options to provide SMSL.6 The following are the two basic approaches, which are further described below:

• Accrual of SMSL at a specific rate (the accrual method); or
• Provide a lump sum of SMSL at the beginning of each benefit year (the lump-sum method).

You may use different methods for different classifications of employees. For instance, you may use the accrual method for part-time employees and the lump-sum method for full-time employees or vice versa.

The ordinance does not change your obligation to comply with a contract, collective bargaining agreement, employment benefit plan or other agreement that provides more generous sick leave to employees than required by the ordinance.

• Paid leave in the form of vacation time, or paid leave that employees may use for either vacation or sick leave, does not satisfy SMSL requirements.7 If you utilize a single paid time off policy to provide vacation and sick leave to meet the requirements of SMSL, you should consult with legal counsel to verify the policy complies.

Accrual Method

Under the accrual method, an employee working in Santa Monica accrues one hour of SMSL for every 30 hours worked in the city, subject to any accrual cap. For more information, see “Cap on Accrual” on this page.

Although the state law permits alternate accrual methods, the only accrual option under SMSL is one hour for every 30 hours worked.8 These important conditions apply to accrual:

• Employees begin to accrue SMSL on their first day of employment.
• SMSL accrues in hour-unit increments.
• Employees accrue SMSL on all hours worked in Santa Monica, including overtime hours. To comply with both the ordinance and the state law, employees must accrue sick leave on every hour worked, regardless of location.
• Any unused, accrued SMSL must carry over to the following year of employment. However, you may cap the employee's total accrued SMSL. For more information, see “Cap on Accrual” on this page.

• The state law does not expressly prohibit fractional hour accrual in the manner SMSL does. In order to provide the most beneficial provisions of the state law and SMSL employers using the one hour for every 30 hours worked accrual method should allow for fractional accrual.

Lump-Sum Method

The lump-sum method allows you to avoid the accrual and carryover provisions by having a policy that provides sick leave in a “lump sum.”9 You grant and make available the full amount of SMSL at the time of hire and annually thereafter at the beginning of each calendar year, fiscal year or year of employment. For example, if you provide the full amount of SMSL hours on January 1, 2023, you would need to provide another full amount on January 1, 2024.

Small businesses (businesses with 25 or fewer employees in the city) must provide a lump sum of at least 40 hours of SMSL.

Businesses with 26 or more employees must provide a lump sum of at least 72 hours of SMSL.

• Effective January 1, 2024, the state law requires employers who use the lump-sum method to provide at least 40 hours or five days of paid sick leave, whichever is greater. If you are a small business as defined above and have employees who work more than eight hours in a workday, their lump-sum amount may need to be higher to ensure that it is no less than the equivalent of three of the employees' workdays.

You can choose a more generous lump-sum if desired.

Cap on Accrual

If you use the accrual method, unused, accrued SMSL carries over from year to year. Unless you want to allow an employee to accrue unlimited paid sick leave, you should consider placing a cap on the maximum amount on paid sick leave that can be accrued. Any cap on accrual should be in writing and communicated to employees.

The ordinance states that unused, accrued SMSL carries over from year to year until it reaches the following maximums:10

• Small businesses (businesses with 25 or fewer employees in the city) may cap an employee's total accrual at 40 hours.
• Businesses with 26 or more employees may cap an employee's total accrual at 72 hours.

• The state law requires employers to allow employees to accrue up to 80 hours or ten days of paid sick leave, whichever is greater. Because the state law accrual cap is more generous to employees, you may no longer utilize either SMSL cap.

You may choose a more generous cap if desired.

The accrual cap is a “floating” cap, not an annual cap. Whenever an employee's accrued SMSL drops below the accrual cap due to usage, the employee begins to accrue SMSL again at the rate of one hour for every 30 hours worked.

Permissible Usage

Employees must be allowed to use SMSL for any of the following reasons11 (these reasons are the same under the state law):

• For the diagnosis, care or treatment of an employee's existing health condition, or preventive care;
• For the diagnosis, care or treatment of an existing health condition, or preventive care of an employee's covered family member, as defined below;
• Serving on a jury as required by law;
• Appearing in court to comply with a subpoena or other court order as a witness in any judicial proceeding;
• For certain, specified purposes when the employee is a victim of, or has a family member who is a victim of, a qualifying act of violence as defined under state law.; or
• For leave taken on or after January 1, 2026, when the employee is a victim or a family member of a victim, taking time off from work to attend judicial proceedings related to that crime, or any proceeding where a right of that person is an issue.
• For more information, see the HR Library's Crime or Abuse Victims' Leave page.

Agricultural employees who work outside may use paid sick time to avoid smoke, heat or flooding conditions created by a local or state emergency, including when the employee’s worksite is closed due to smoke, heat or flooding conditions.12

For purposes of SMSL, a covered family member includes:13

• A child, defined as a biological, foster or adopted child; a stepchild; or a legal ward, regardless of the age or dependency status of the child. “Child” also includes a child to whom the employee acts as a parent, even if the child is not the employee's legal child;
• A parent, defined as a biological, foster or adoptive parent; a stepparent; or a legal guardian. “Parent” also includes a person who is a biological, foster or adoptive parent, stepparent, or legal guardian of the employee's spouse or registered domestic partner; or a person who acted as the employee's parent when the employee was a minor, even if the person is not the employee's legal parent;
• A sibling;
• A grandparent;
• A grandchild;
• A spouse; or
• A registered domestic partner.

The state law allows employees to use paid sick leave to care for a “designated person,” which is not recognized by the SMSL and can be any person identified by the employee at the time the employee requests sick leave. To comply with both laws in a single policy, you must allow employees to use their sick leave for the family members identified by both laws.

For more information about a “designated person” under the state law, see Permissible Usage.

An employee can use the full amount of accrued SMSL for a covered family member.

Parameters of Santa Monica Sick Leave Use

There are important points regarding how employees may use SMSL:14

• Unlike the state law, which allows you to limit an employee's use of accrued sick leave to 40 hours or five days per year, the ordinance does not allow you to limit an employee's use of SMSL to anything less than the amount of SMSL the employee has accrued.
• An employee may begin using SMSL on the 90th day of employment. After that, the employee may use SMSL as accrued.
• SMSL must be provided upon an employee's oral or written request. Employees must provide reasonable advanced notice if the paid sick leave is planned or “as soon as practicable” if the need for leave is unforeseeable.
• Consistent with state law, you can require employees to take SMSL in an initial minimum increment of no more than two hours. To comply with state law, you should allow employees to take SMSL in an initial minimum increment of two hours on each occasion, and then as determined necessary by the employee (for example, an additional 15 minutes).
• You cannot require an employee to find a replacement worker to cover the hours during which the employee will be using SMSL.
• You cannot require medical documentation under the state law. Under the ordinance, you also cannot require an employee to provide documentation to substantiate the need for SMSL.

Paying Employees for Santa Monica Sick Leave

The ordinance does not address the rate at which you must pay employees for SMSL. However, the state law requires payment of sick leave at specified rates (as described on the HR Library's Paying the Employee for the Sick Day page). If you intend for your policy to comply with the ordinance and the state law, you must pay sick leave at the rates specified in the state law.

The state law requires you to pay employees for SMSL no later than the payday for the next regular payroll period after the SMSL was taken.

Employee Separation and Reinstatement

Unlike accrued, unused vacation or paid time off (PTO) — which is treated like wages — SMSL does not need to be paid out to the employee upon separation of employment (i.e., there is no requirement to “cash out” SMSL at termination, resignation retirement, or other separation from employment).15

Unlike the state law, the ordinance does not address reinstatement of SMSL when you rehire employees after a period of separation. To comply with both laws, you must reinstate any previously accrued, unused SMSL that was not paid out at separation if an employee is rehired within one year. Upon rehire, the employee must be allowed to use the reinstated SMSL and begin accruing additional SMSL.

Posting, Notice and Recordkeeping Requirements

The ordinance contains posting, notice and recordkeeping requirements. You will need to pay close attention to these obligations.

Posting and Notice

The ordinance requires you to post a notice, developed by the city, to inform employees of their rights. The notice must be posted in a conspicuous place at any workplace or job site where employees work. You must post this notice in English, Spanish and any other language spoken by at least 5 percent of the employees at the workplace or job site.16

The current Santa Monica Minimum Wage Ordinance Notice, in several languages, is part of CalChamber's Santa Monica Labor Law Poster.

• Santa Monica Labor Law Poster

The state law also requires you to display a Healthy Workplaces/Healthy Families Act of 2014 Paid Sick Leave notice, which is part of CalChamber's California and Federal Labor Law Posters.

• California and Federal Labor Law Posters

You must display both notices.

New Employees

You must provide employees, at the time of hire, your company's name, address and telephone number in writing.17

State law also requires you to provide the Wage and Employment Notice to Employees (Labor Code section 2810.5) at the time of hire to all nonexempt employees that includes this information and meets the obligation under the MWO.18 For more information, see the HR Library's New Employee Orientation page.

Payday Notice

Unlike the state law, the ordinance does not have a payday notice requirement. To comply with both laws, you must provide an employee with an itemized wage statement or other written document accompanying the employee's wages that notifies the employee of the amount of accrued SMSL available each pay period.

Recordkeeping

You also are required to retain payroll records of each employee for a period of three years.19

Enforcement

The ordinance is enforced by the Los Angeles County Department of Business and Consumer Affairs (Department) on behalf of the city.

The city can prosecute violations of the ordinance either as a misdemeanor or an infraction. Misdemeanor violations of the ordinance are punishable by up to six months in jail or a fine ranging from $150 to $500. Infractions are punishable by a fine ranging from $100 to $250. The applicable punishment is for each day the violation occurred.20

In addition, the city can issue an administrative citation for violations of the ordinance. Fines are set by city council.21

An aggrieved employee, entities acting on behalf of aggrieved employees or the public, or the city, may file a lawsuit for any violation of the ordinance.22

Remedies for violation of the ordinance include: back pay with interest; penalties of $100 to each employee for each day that the violation occurred; reimbursement of the city's costs of enforcement; and attorneys' fees and costs.23

Retaliation

The ordinance protects employees against retaliation for exercising any rights under the ordinance.24 For example, employees have the right to use SMSL, file formal complaints and inform other employees of their rights.

If an employer takes adverse action against an employee within 90 days after the employee asserted rights protected by the ordinance, it will be presumed this action was unlawful retaliation. The employer will have to offer evidence to rebut this presumption. The 90-day window is significantly longer than the 30-day window permitted under the state law.

Adverse action includes reducing the hours, wage or benefits, demoting, suspending, discharging, or discriminating against an employee for exercising rights protected by the ordinance.

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1. Lab. Code sec 246(r)

2. Santa Monica Mun. Code sec. 4.62.030

3. Santa Monica Mun. Code sec. 4.62.010

4. Santa Monica Mun. Code sec. 4.62.010

5. Santa Monica Mun. Code sec. 4.62.045

6. Santa Monica Mun. Code sec. 4.62.025

7. City of Santa Monica Minimum Wage Rules and Regulations (January 2018), Rule 6

8. Santa Monica Mun. Code sec. 4.62.025

9. Santa Monica Mun. Code sec. 4.62.025

10. Santa Monica Mun. Code sec. 4.62.025

11. Santa Monica Mun. Code sec. 4.62.025

12. Lab. Code sec. 246.5

13. Santa Monica Mun. Code sec. 4.62.025

14. Santa Monica Mun. Code sec. 4.62.025

15. Santa Monica Mun. Code sec. 4.62.025

16. Santa Monica Mun. Code sec. 4.62.015

17. Santa Monica Mun. Code sec. 4.62.015(f)

18. Lab. Code sec. 2810.5

19. Santa Monica Mun. Code sec.4.62.015(g)

20. Santa Monica Mun. Code sec. 4.62.100(a)

21. Santa Monica Mun. Code secs. 4.62.100(b), 1.09

22. Santa Monica Mun. Code sec. 4.62.110(a)

23. Santa Monica Mun. Code sec. 4.62.110(b)

23. Santa Monica Mun. Code sec. 4.62.070