Think L.A.’s minimum-wage hike that kicks in July 1 is all set? Think again.

A major fight is now brewing over whether the law passed in May should be amended to include a mandate that all employers in the city provide additional days of paid sick leave above and beyond the three days already required under state law. Predictably, business groups are expressing alarm.

This bombshell landed on March 18, in an innocuous document titled “Follow Up Policy Elements for a Citywide Minimum Wage” from Chief Administrative Officer Miguel Santana and Chief Legislative Officer Sharon Tso. The report was issued in response to a City Council directive to examine the merits of “compensated and uncompensated time off.” Local unions had pushed for a paid sick-leave mandate to be included in the original minimum-wage law, but the council voted last year to defer that provision.

The report outlines four options for an expanded paid sick-leave mandate for City Council members to ponder: a straight-up requirement for employers to provide a certain number of additional paid sick days; combining illness, vacation, and personal days into a “total compensated time off” provision as in the city’s hotel worker minimum-wage ordinance; looking at similar policies already enacted in cities such as Oakland, San Francisco, and Santa Monica; or some combination of these.

The city could also opt to just let the state law for three days of paid sick leave apply.

The report was taken up by the council’s Economic Development Committee on March 22. Business groups immediately expressed concerns, chief among them the release of the report just four days before the committee could decide to vote on which option the city should pursue.

Typical of the responses was that of the California Restaurant Association:

“This rushed process has provided the restaurant industry essentially one business day to review the recommendations and little opportunity to understand the potential impacts on our industry or discuss with our members,” Matthew Sutton, the CRA’s vice president of government affairs and public policy, wrote in testimony submitted to the committee.

Sutton went on to oppose in principle any additional paid sick leave mandate beyond the three days a year already required by state law. He said that when a worker calls in sick, another worker must be called in to fill that shift; if the sick leave is a paid benefit, that’s tantamount to paying two workers to work the same shift.

“Paid sick leave effectively increases the overall compensation package of employees,” Sutton said. Coming on top of minimum-wage increases, this could force restaurants to make deeper cuts in worker hours, he added.

After hearing concerns from other business groups such as the California Grocers Association and local groups including the Los Angeles Area Chamber of Commerce, the Central City Association, and the Valley Industry and Commerce Association, the five-member committee voted to postpone a decision on the issue until its April 12 meeting.

Gas Concerns

The impact of the massive Aliso Canyon gas leak could soon spread to major commercial natural gas customers throughout the county.

That’s because the California Public Utilities Commission is considering a regulation to limit the amount of natural gas stockpiles that major customers can purchase from suppliers besides Southern California Gas Co. Currently, such customers can keep in reserve 10 percent of the gas they purchase; SoCal Gas and San Diego Gas & Electric, both subsidiaries of San Diego-based Sempra Energy, want to limit that to 5 percent on any given day, with penalties for any stockpiling in excess of that level.

The utilities say such stockpile limits are necessary because of the prospect of a lengthy shutdown of at least part of the Aliso Canyon natural gas storage facility, by far the region’s largest.

But this isn’t sitting well with business groups representing some of these major natural gas customers. In a joint response, the California Manufacturers & Technology Association and the California League of Food Processors said this daily requirement could complicate the ability of their members to control their operations.

One major natural gas user that could be impacted if it has other suppliers besides SoCal Gas is CalPortland Co., a Glendora-based cement manufacturer with plants in Mojave and Colton; CalPortland is also a board member of the CMTA.

Ironically, the business groups say, to ensure they stay within the 5 percent stockpile limit, companies might have to burn off their excess natural gas, resulting in “totally unnecessary and undesirable greenhouse gas emissions,” possibly even triggering increased expenses under the state’s cap-and-trade system for greenhouse gas emissions.

“It’s a classic ‘damned if you do, damned if you don’t’ situation,” wrote Michael Shaw, CMTA’s vice president of government relations in CMTA’s weekly blog, Capitol Weekly.

Staff reporter Howard Fine can be reached at hfine@labusinessjournal.com or (323) 549-5225, ext. 227.

For reprint and licensing requests for this article, CLICK HERE.