On July 11, employees throughout the City of San Diego began accruing paid sick leave due to San Diego’s recently-approved Earned Sick Leave and Minimum Wage Ordinance. In addition to raising the City’s minimum wage to $10.50 per hour (and requiring annual increases after that), the Ordinance allows employees working 30 or more hours per week within City boundaries to begin accruing paid sick leave immediately. Although the Ordinance’s basic terms are well known, many likely are not as aware of Amendments to the Ordinance that may go into effect in the near future.
The Ordinance applies to a broad range of employers and defines “employee” as one who performs at least two hours of work within the geographic boundaries of the City for at least one calendar week of the year, and who qualifies for the payment of minimum wage, excluding independent contractors. Beginning immediately, employees will accrue one hour of paid sick leave for every 30 hours worked (or for every 40 hours worked if the employee is overtime-exempt under California law). If an employee takes a sick day, employers must compensate employees at the same rate as the employees would otherwise earn. In other words, employers cannot pay an employee less on days when the employee uses paid sick leave. Employers may request documentation of the employee’s reason for being out sick, but only if the employee takes three or more consecutive days of leave.
The Ordinance’s terms are highly favorable to employees, who may use up to 40 hours of their accrued paid sick leave every 12 months and carry unused sick leave over from one year to the next. One of the amendments to the Ordinance addresses the potential repercussions of unlimited sick leave accrual by capping total earned sick leave at 80 hours, but the amendments will require further evaluation by the City Council in August before taking effect. Fortunately, employers do not have to pay the employee for paid sick leave upon termination.
The burden the Ordinance places on employers goes beyond absorbing the additional costs of paid sick leave. Employers will need to provide notices (to be provided by the City) to employees regarding the Ordinance and post notices in the workplace to further notify employees of their new rights and the increase in the minimum wage. The Amendments currently under consideration clarify that the City would provide standard notices for employers to use.
Employers who violate the Ordinance can face up to $10,000 in civil penalties (if they have not previous violated the Ordinance) and would have to pay the reasonable attorneys' fees incurred by employees who prevail in actions to enforce the Ordinance.
At this time, businesses need to proactively evaluate how they will comply with the Ordinance. For example, employers should determine an appropriate method for tracking their employees’ earned and used paid sick leave, even for terminated employees, and be prepared to provide such records to their employees on a regular basis. It would also be prudent to ensure that unpaid interns or volunteers used in one’s business do not qualify as “employees” under the Ordinance (or any other laws).
If you have any questions with how your business can update its policies and procedures to comply with the Earned Sick Leave and Minimum Wage Ordinance, please contact LGC.
