The grace period is over. Effective January 1, 2018, the City of Santa Monica’s minimum cap on accrued sick leave for eligible employees will increase from 40 to 72 hours for businesses with 26 or more employees. The accrual-cap for businesses with 25 or fewer employees will increase from 32 to 40 hours.

Santa Monica’s sick leave requirements have been in effect since January 1, 2017 under the City’s Minimum Wage Ordinance (the “Santa Monica Ordinance”). Under the Santa Monica Ordinance, the first year required a 32-hour accrual cap for small businesses and a 40-hour accrual cap for large businesses with the planned increase going into effect January 1, 2018.

Like California law, the Ordinance allows employees to accrue sick leave at a rate of 1 hour for every 30 hours worked. The accrual cap under State law is 48 hours (or six days) of sick leave. During the past year, the accrual cap under State law has exceeded the accrual cap under the Santa Monica Ordinance for all businesses. Accordingly, the Santa Monica Ordinance did not impact the accrual cap for eligible employees. Now, however, the 72-hour accrual cap for large businesses will exceed the 48-hour accrual cap under State law. Small employers will still need to satisfy the State’s 48-hour accrual cap.

In general, employees may be eligible for paid sick leave under the Santa Monica Ordinance if they work two hours in a particular week in Santa Monica. This includes part-time and temporary employees. The employee need not be based in Santa Monica to be eligible. In fact, it is possible for an employee to be subject to multiple local paid sick leave requirements.

No accrual or carryover is required if the full amount of leave required by the ordinance is provided at the beginning of each year (whether calendar year, fiscal year, or year of employment). Thus, while State law permits a grant of 3 days or 24 hours, Santa Monica’s ordinance requires the grant be at least 40 hours for smaller employers and 72 hours for larger employers in 2018.

In advance of the January 1, 2018 change, businesses should determine how their employees may be impacted by this increase in sick leave. As cities continue to enact and amend varying paid sick leave ordinances with varying thresholds, California businesses will have to continue to be diligent to ensure compliance.