San Diego's Expansion of Minimum Wage and Paid Sick Leave

Allen Matkins

Recently, San Diego voters approved Proposition I, which requires San Diego employers to provide higher minimum wages and five days of paid sick leave to employees working in the city. The new requirements are set to take effect as soon as the election results are certified, which could be as early as July 2016. According to City Attorney Jan Goldsmith the Ordinance will not be retroactive.

Proposition I, otherwise known as the City of San Diego Earned Sick Leave and Minimum Wage Ordinance, No. O-20390, was approved by the San Diego City Council in August 2014 and was introduced on the June 7, 2016, ballot as the result of a referendum petition that qualified the measure for the ballot, and a City Council vote to place it on the ballot. It passed with 63% of San Diego voters voting in its favor. 

Minimum Wage Increases

Under the Earned Sick Leave and Minimum Wage Ordinance, the minimum wage will increase gradually over the next few years as follows:

Current Minimum Wage $10.00
Ordinance Effective Date
January 1, 2017 $11.50
January 1, 2019
Increase with the cost of living annually 
based on the prior year's Consumer Price Index 
for Urban Wage Earners and Clerical Workers. 

Who is Covered

The Ordinance applies specifically to employers and employees in the geographic boundaries of the City of San Diego. 

Definition of Employer

The Ordinance defines "employer" as a person or persons, including associations, organizations, partnerships, business trusts, limited liability companies, or corporations, who exercise control over the wages, hours, or working conditions of any employee, engaged an employee, or permit an employee to work. 

Definition of Employee

The Ordinance defines "employees" as (1) "any person who, in one or more calendar weeks of the year, performs at least two hours of work within the geographical boundaries of the City of San Diego for an employer;" and (2) "who qualifies for the payment of minimum wage under State of California minimum wage law." The definition excludes independent workers, individuals who have been issued a special license by the State to be employed for less than minimum wage, certain youth employees in publicly subsidized summer or short-term employment programs, and certain counselors at organized outdoor camps. 

Expansion of Paid Sick Leave

Under the Ordinance, employees would receive one hour of paid, earned sick leave for every thirty hours worked, at the same hourly rate or other measure of compensation that the employee earns. The main requirements include:

  • Employees begin to accrue sick leave on commencement of employment, or the Ordinances effective date, whichever is later. 
  • Employees are entitled to begin using sick leave 90 days after the commencement of employment, or the Ordinances effective date, whichever is later. 
  • Employers are authorized to limit the use of earned leave to 40 hours in a twelve-month period.
  • Employers cannot cap the accrual of sick leave and unused time must be carried over. 
  • Upon an employee's separation, employers are not required to pay unused leave, but the employer must maintain it for six months if the employee returns.
  • Leave can be used if an employee is physically or mentally unable to work due to illness, injury, or a medical condition, including pregnancy; for "Safe Time" (time away necessary to handle certain matters of domestic violence, sexual assault, or stalking, when the employee or a designated family member is a victim); for medical appointments; and to care for family members (a child, spouse, parent, grandparent, grandchild, sibling or the child or parent of a spouse) with an illness, injury, or medical condition.

Notification and Record Keeping Requirements

San Diego employers are required to post bulletins and notices regarding the new minimum wage and sick leave laws. Below is a summary of the key requirements.

  • Employers are required to post bulletins announcing the minimum wage for the upcoming year and its effective date. 
  • Employers are also required to post notices in the workplace informing employees of the current minimum wage, the employee's rights to minimum wage and earned sick leave, information about the accrual and use of earned sick leave, the right to be free from retaliation, and the right to file a complaint with the enforcement office or a court of competent jurisdiction. 
  • The notices and bulletins must be posted in a conspicuous place in the workplace or job site in English, Spanish, Chinese, Vietnamese, and Tagalog, and any language spoken by at least five percent of the employees at the workplace or job site.
  • Employers are also required to maintain written or electronic records documenting their employees' wages earned and the accrual and use of earned sick leave. Employers are required to retain these records for a period of at least three years.

Remedies and Civil Penalties 

An employer who violates the provisions of the Ordinance may be subject to legal action or civil penalties, as follows: 

  • An employee may bring a legal or equitable action for harm caused by violation of the Ordinance. An employee is entitled to relief, including, but not limited to, withheld back wages, liquidated damages equal to double withheld back wages, damages for denial of use of accrued sick leave, reinstatement, and reasonable attorney's fees and costs.
  • An employer who violates the provisions of the Ordinance is subject to a civil penalty for each violation up to, but not to exceed, $1,000 per violation. 
  • An employer who fails to comply with the notice and posting requirements is subject to a civil penalty of $100 for each employee who was not given appropriate notice, up to a maximum of $2,000. 
  • An employee is not required to submit a complaint to the designated enforcement office in order to bring a private cause of action against his or her employer. 

The City of San Diego has yet to issue posters that comply with the new Ordinance, but it is anticipated that they will be available in the coming months. 

Employers with questions regarding compliance should contact their employment counsel. Read the full text of the Ordinance.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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