Employers doing business in California have long known to expect the state legislature to impose higher employee protections and benefits than Congress. Well, more and more local governments – among them California’s most populous cities – are looking to up the ante over the state-mandated protections.
Specifically, local governments are increasing minimum wage rates and paid sick leave benefits for employees working within city or county limits. A number of these protections kicked in on July 1, 2016, so now is a perfect time to double-check your wage and sick leave benefits if you have employees in California.
Minimum Wage Update
Effective January 1, 2016, minimum wage across California increased from $9.00 per hour to $10.00. However, a number of local governments have increased the minimum wage even further. As you likely know, whenever a local minimum wage conflicts with the state minimum wage, the employer must follow the stricter standard – in other words, the employer must follow the wage standard most beneficial to the employee.
Below is a chart outlining the local minimum wages that are higher than the state minimum wage, many of which go into effect on July 1, 2016:
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City
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Local Minimum Wage Rates (recent changes noted in bold)
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El Cerrito
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$11.60/hour (effective July 1, 2016)
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Emeryville
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$13.00/hour (55 or fewer employees); $14.82/hour (56 or more employees) (effective July 1, 2016)
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Los Angeles
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$10.50/hour (26 or more employees); Requirement for smaller employers delayed until 2017 (effective July 1, 2016)
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Los Angeles County
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$10.50/hour (26 or more employees); Requirement for smaller employers delayed until 2017 (effective July 1, 2016)
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Mountain View
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$11.00/hour
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Oakland
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$12.25/hour
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Palo Alto
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$11.00/hour
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Pasadena
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$10.50/hour (26 or more employees); Requirement for smaller employers delayed until 2017 (effective July 1, 2016)
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Richmond
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$11.52/hour
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San Diego
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$10.50/hour (effective on or around July 7, 2016 — approximate date that election results are certified)
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San Francisco
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$13.00/hour (effective July 1, 2016)
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San Jose
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$10.50/hour (26 or more employees); Requirement for smaller employers delayed until 2017 (effective July 1, 2016)
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Santa Clara
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$11.00/hour
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Santa Monica
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$10.50/hour (26 or more employees); Requirement for smaller employers delayed until 2017
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Sunnyvale
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$11.00/hour (effective July 1, 2016)
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Paid Sick Leave Update
In addition to the minimum wage increases effective on July 1, the cities of Emeryville, Los Angeles, and San Diego increased the paid sick leave benefits for their employees effective this date. These cities join Oakland and San Francisco (and Long Beach, to a small extent) in providing paid sick leave benefits above and beyond that which is required under state law.
For example, under the new Los Angeles law, employers must allow employees to use twice the amount of leave than required by California law – 48 hours of paid sick leave. Moreover, an employee can carry over 72 hours of paid sick leave from year to year, regardless of whether an employer provides sick leave under the “lump grant” method (providing the full 48 hours at the beginning of each year of employment, calendar year, or 12-month period) or the accrual method (having sick leave accrue at the rate of one hour of sick leave per every thirty 30 hours worked). This represents a significant difference from the state paid sick leave law, which does not carry over any unused leave hours for employers using the “lump grant” method.
Below is a chart that highlights the key provisions of each local paid sick leave law. Keep in mind that not every detail or scenario is covered by this chart – make sure to contact your employment counsel for advice regarding specific scenarios:
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City
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Local Paid Sick Leave Rules (recent changes noted in bold)
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Emeryville
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Maximum of 48 hours accruable for employees of small businesses (55 or fewer employees within Emeryville city limits) and 72 hours for employees of large businesses (56 or more within Emeryville city limits). No cap on amount of hours used by employee.
Definition of covered “family members” for use to cover a family member’s health care needs is expanded to include a designated individual (if employee has no spouse or registered domestic partner) for whom an employee can use Paid Sick Leave to provide care. In addition, the employee may use Paid Sick Leave to provide care for a guide dog, signal dog, or service dog of the employee, employee’s family member, or the person designated by the employee.
(effective July 1, 2016)
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Long Beach
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Applies only to certain hotel workers within the city. Accrual capped at five days per year (greater than the state minimum of three days/24 hours). Accrual rate is “5/12 of a day of compensated time for each full month in a calendar year” that the hotel worker is employed.
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Los Angeles
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Employees may use up to 48 hours of paid sick leave in each year of employment, calendar year or 12-month period. Up to 72 hours must carry over from year to year. Definition of covered “family members” for use to cover a family member’s health care needs is expanded to include “any individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.”
All employees (defined as all individuals who perform two or more hours per week within the geographic boundaries of the City) are covered by the law.
(effective July 1, 2016)
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Oakland
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Annual accrual capped at 40 hours for employees of “small businesses” and 72 hours for all other employees. Small business is defined as an employer who has fewer than 10 “workers” (including workers that are full-time, part-time, temporary, and staffed through a staffing agency). If an employee uses leave and falls below the cap – even during the same year – the employee starts accruing paid sick leave again. Definition of covered “family members” for use to cover a family member’s health care needs is expanded to include a designated individual (if employee has no spouse or registered domestic partner) for whom an employee can use hours to provide care.
All employees (defined as all individuals who perform two or more hours per week within the geographic boundaries of the City) are covered by the law.
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San Diego
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Employers may limit use of sick leave to 40 hours in a 12-month period and can set a reasonable minimum increment for using sick leave, not to exceed two hours. No cap is set on the amount of earned sick leave that employees can accrue in one year. Unused sick leave must be carried over at year-end regardless of amount unused.
All employers with at least one eligible employee are covered.
(effective on or around July 7, 2016 — approximate date that election results are certified)
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San Francisco
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Annual accrual capped at 40 hours for employees of employers with 10 or fewer workers (including full-time, part-time, or temporary) and 72 hours for all other employees. Unused sick leave must be carried over at year-end regardless of amount unused.
Definition of covered “family members” for use to cover a family member’s health care needs is expanded to include a designated individual (if employee has no spouse or registered domestic partner) for whom an employee can use Paid Sick Leave to provide care.
All employees who perform work in the City are covered, regardless of the number of hours worked.
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Although this convenient chart is a handy snapshot as of July 1, 2016, cities in California continue to pass new local ordinances and amend existing ones that affect both minimum wage and paid sick leave law. For example, Santa Monica has enacted a minimum wage and paid sick leave law that will be effective on January 1, 2017. Check with your local city government on whether a local minimum wage ordinance might apply to your workforce, and check back to this space at the end of 2016 for these and under updates.
