June 2022: Reminder: West Hollywood’s Minimum Wage Increases and New Paid and Unpaid Leave Requirements Go into Effect

Update Applicable to:
All employers in the city of West Hollywood, California.

What happened?
On November 23, 2021, we notified you that the city council of West Hollywood passed Ordinance No. 21-1168 which implemented an increase in the minimum wage and new leave requirements for employees in the city. This is a reminder for that update.

What are the details?
Effective July 1, 2022, the minimum wage in the city of West Hollywood will increase and new leave requirements will go into effect for all employees within the city.

	1/1/2022	7/1/2022	1/1/2023	7/1/2023
Hotel Employers	$17.64	$18.35*	No change	$18.77*
Employers with 50 employees or more	$15.50	$16.50	$17.50	$18.77*
Employers with less than 50 employees	$15.00	$16.00	$17.00	$18.77*

Paid Leave
For paid leave, the ordinance requires a hybrid leave that both full- and part-time employees are provided paid time off for sick leave, vacation, or personal necessity. Employees must be eligible to use accrued paid time off after the first six months of employment or consistent with company policies, whichever is sooner.

Full-time employees, defined as working at least 40 hours a week or as defined by the employer, shall be provided 96 compensated hours.  Full-time employees shall accrue at least 96 compensated time off hours per year. A part-time employee, defined as an employee who works less than 40 hours per week, shall accrue compensated time off in increments proportional to that accrued by someone who works 40 hours in a week.

Unpaid Leave
For unpaid leave, the new ordinance requires employers to permit full-time employees to take at least 90 additional hours per year of uncompensated time to be used for sick leave for the illness of the employee or a member of the employee’s immediate family, when the employee has exhausted their compensated time off for the year.

Hardship Waiver and Notice
Employers can seek one-year waivers for the minimum wage requirements, as well as the paid leave portion for financial hardship. If employers do seek financial hardship, they will need to notify the applicable employees of the hardship.

Calculation of Employees
In calculating the number of employees, for the purposes of determining the size of a business, the following factors shall be considered:

1. Every employee regardless of whether they are a full-time, part-time, or temporary employee shall be counted as one employee.
2. Every individual made available to work through the services of temporary services, staffing agency, or similar entity shall be counted as one employee.
3. For employers with multiple locations, the total number of employees shall be calculated based on the total number of all employees employed by the employer in the United States.
4. Franchises are separate entities (individual employers) for the purposes of calculating the business size. The total number of employees shall be calculated based on the total number of all employees employed by the individual franchise owner in the United States. If the employer owns more than one of the same franchise (i.e. McDonald’s locations), the total number of employees shall be based on the total number of employees within all of those franchise locations that are owned by the employer, not the total number of employees of the corporate franchisor.

For existing employers, the number of employees shall be calculated based on the average number of employees employed per quarter during the most recent calendar year to account for any fluctuations of employees throughout the year. Employers should use IRS Form 941 as a reference to determine quarterly employee counts.

For new employers, an initial determination of size is based upon the actual number of hires at the time of the business’s opening. After the business has opened, the employee count shall be determined by the average number of employees per week who worked for compensation in the first 90 days.

These provisions became operative on January 1, 2022, for “hotel employers” and “hotel workers,” whereas, for other entities, July 1, 2022, will be the start date.

For more information, please see the links below:

Ordinance No. 21-1168

Administrative Regulations

Vensure Legal Update (11/23/2022)

Vensure Legal Update (5/24/2022)

Article

What do employers need to do?
Employers should review the links provided above and make adjustments to their minimum wage and leave policies to be in compliance with the law before it goes into effect.