Executive Summary
Overview: Voters in the city of San Diego supported a ballot measure that imposes a citywide minimum wage and also requires employers to provide paid sick leave. The ordinance is now in effect while an implementing ordinance (“IO”) amending the sick leave requirements remains pending. While the IO requires a second read before it is effective, the City Council has set July 11, 2016 as the effective date for employers to comply with the ordinance’s original requirements. This communication summarizes the current ordinance and highlights changes and clarification provided by the IO.
Coverage: With limited exceptions, persons are entitled to benefits under the ordinance if they perform at least two hours of work within the geographic boundaries of the city in one or more calendar weeks of the year.
Effective Date: This ordinance passed following a referendum vote on June 7th, and was scheduled to go into effect immediately following certification of the election results. The certification process has concluded and the effective date of the ordinance is July 11, 2016.
Action Required: Review the details below and watch for additional updates in the near future. Our Sick Leave Toolkit available on FormSource in the Leave and Return to work section has been updated with additional Frequently Asked Questions regarding the current ordinance and a model sick leave policy is also available based on the current ordinance. These resources will again be updated in the coming weeks after the IO is effective and will subsequently be included in the toolkit. Until the IO is effective we recommend complying with the current ordinance in effect
Coverage
Employees are entitled to benefits under the Ordinance if they perform at least two hours of work within the geographic boundaries of the City in one or more calendar weeks of the year. Limited exceptions apply to individuals authorized to be employed for less than minimum wage if employed under a special license for handicapped individuals, persons employed under a publicly subsidized summer or short-term youth employment program, or certain student-employees or counselors of organized camps as provided under the California Labor Code.
Minimum Wage
The minimum wage in the City is increased to $10.50 an hour. The minimum wage in the City will be raised to $11.50 an hour effective January 1, 2017. Starting January 1, 2019, the minimum wage will increase by an amount corresponding to the prior year’s increase, if any, in the cost of living, as defined by the Consumer Price Index.
If the California (currently, $10 per hour) or federal (currently, $7.25 per hour) minimum wage exceeds the minimum wage set by the Ordinance, the minimum wage will be increased to the higher of the California or federal minimum wage.
Earned Sick Leave Requirements
How much earned sick leave can employees accrue?
Employers must provide covered employees with one hour of earned sick leave for every 30 hours worked by the employee within the geographic boundaries of the City. Employers may not limit the amount of earned sick leave that employees accrue.
Under the IO however, employers may cap an employee’s total earned sick leave at 80 hours.
Note that accrued but unused paid sick leave must still roll over to the next benefit year. However, under the IO, once an employee accrues 80 hours of paid sick leave accrual stops until he or she uses sick leave.
The IO also provides employers with the option of providing the 40 hours of paid sick leave to employees at the beginning of each benefit year with a benefit year is any regular and consecutive 12-month period defined by the employer. If an employer front loads the sick leave time then no carryover is required.
Employers who provide an amount of paid leave, including paid time off, vacation, or paid personal days, sufficient to meet the requirements of the Ordinance, and allow use of such paid time off under the same conditions and purposes as the Ordinance, are not required to provide additional leave.
When do employees accrue, and when can they use, earned sick leave?
Employees begin to accrue earned sick leave upon hire, and existing employees will begin accruing earned sick leave immediately. Employees are entitled to begin using earned sick leave after the 90th calendar day of employment (e.g. for current employees 90 days from the date of hire; not 90 days from July 11th).
Can employers limit the amount of earned sick leave used?
Employers may limit use of earned sick leave to 40 hours in a consecutive 12-month period (to be determined by the employer) but unused / accrued sick leave must be carried over to the next benefit year.
For what reasons can an employee use earned sick leave?
Employees may use earned sick leave for their own medical care and for the medical care of certain covered family members. Employees also may use earned sick leave for themselves and covered family members for reasons associated with domestic violence, sexual assault, or stalking, including medical care, counseling, relocation, or legal services. In addition, employees may use leave time for a public health emergency.
Can employers set restrictions on the use of earned sick leave?
When the use of earned sick leave is foreseeable, employers may require reasonable advance notice not to exceed seven days prior to the date that the earned sick leave is to be used. When the need for used of earned sick leave is not foreseeable, employers may require employees to provide notice of the need to use earned sick time as soon as practicable.
If an employee is absent for more than three consecutive work days, the employer may require reasonable documentation that earned sick leave was taken for a permissible reason. Employers must accept reasonable documentation (which does not specify the nature of the injury, illness or medical condition) signed by a licensed health care provider regarding the amount of earned sick leave required.
Do employers have to pay out unused, accrued earned sick leave upon termination?
Employers are not required to pay out earned sick leave upon termination of employment if the earned sick leave is separate and distinct from a paid time off or vacation plan. Note however If a terminated employee is rehired within six months, he or she is entitled to reinstatement of his or her accrued but unused paid sick leave if it was not paid out on termination. If an employee is rehired within one year, he or she will be entitled to his or her accrued but unused sick leave under California state law if it was not paid out on termination.
Notice and Posting Requirements
Employers must post a notice published each year by the City. The notice must be posted in a conspicuous place at any workplace or job site where any covered employee works. Both the current ordinance and the IO include individual employee notice requirements but these requirements are clarified under the IO. Every employer must provide each employee at the time of hire, or by October 1, 2016, whichever is later, written notice of the employer’s legal name and any fictitious business names, address, and telephone number and the employer’s requirements. The notice must also include information on how the employer satisfies the requirements of the ordinance, including the employer’s method of earned sick leave accrual.
Employers may provide this notice through an accessible electronic communication in lieu of a paper notice.
Both posting and employee notice materials must be offered in English and the employees’ primary language (if that language is one for which the San Diego County Registrar of Voters provides translated ballot materials and it is spoken by at least 5 percent of the employees at a particular job site.
The bulletin and notices will be published by the city and made available to employers in English, Spanish, and any other language for which the San Diego County Registrar of Voters provides translated ballot materials.
The poster is currently available on the city website here: https://www.sandiego.gov/treasurer/minimum-wage-program
The city has yet to publish a model individual employee model notice. We will notify clients when a model notice is posted.
This is a high level summary of the ordinance and the IO additional details including information regarding penalties can be accessed here: https://www.sandiego.gov/treasurer/minimum-wage-program
As always, please contact your Human Resources Business partner if you have questions.