June 28, 2016

Compliance Matters

SM Newsletter

THE SAN DIEGO CITY EARNED SICK TIME AND MINIMUM WAGE ORDINANCE

San Diego jumped on the paid sick leave bandwagon, joining the ranks of Los Angeles, San Francisco, Oakland, Emeryville, and Santa Monica when voters approved the San Diego Earned Sick Leave and Minimum Wage Ordinance ("SD Ordinance") on June 7, 2016. The Ordinance will take effect as soon as the San Diego City Council approves the election results-estimated to occur by mid-July. Employers must be ready to immediately comply with the new law as of its effective date.

Paid Sick Leave

The paid sick leave portion of the Ordinance is similar to the California Healthy Workplace, Healthy Families Act ("HWHFA") with a few key differences. Employers in the City of San Diego will be required to provide paid sick leave in compliance with both laws.

Employees who perform at least two hours of work in one or more calendar weeks within the City of San Diego are entitled to paid sick leave. Employees must accrue one hour of paid sick leave for every 30 hours worked and the earned sick leave must be available for use after the employee's first 90 days of employment. San Diego paid sick leave may be used for permissible medical purposes, to care for a family member, for instances of domestic violence, and during certain public health emergencies.

Key differences between the SD Ordinance and the HWHFA are as follows:

Definition of family member: The SD Ordinance includes step-siblings in the definition of family member whereas state law does not.
"Front loading" sick leave policies: The SD Ordinance does not permit an employer to comply with the Ordinance by front loading sick leave days at the beginning of the year, whereas state law does.
Accrual cap: The SD Ordinance does not allow a cap on accrual or carry over hours but does permit an employer to limit an employee's use of paid sick leave at 40 hours per year, compared to state law which allows a cap on accrual and carry over to be set at 48 hours per year and permits an employer to limit an employee's use to 24 hours per year.
Uses of sick leave: In addition to permissible uses of sick leave under state law, the SD Ordinance adds that sick leave may be used when there is a closure of work or school due to a public health emergency.
Rate of pay: The SD Ordinance requires paid sick leave to be paid at the "same hourly rate or other measure of compensation" as the employee earns at the time leave is taken, whereas state law requires paid sick leave to be paid to non-exempt employees at either (i) their regular rate of pay, or (ii) a 90 day average and to be paid to exempt employees at the same rate as other forms of paid leave.
Documentation: The SD Ordinance permits employers to require "reasonable documentation" for an absence of more than three consecutive work days.
Collective bargaining agreement exemption: The SD Ordinance does not have a CBA exemption, whereas state law excludes from the definition of a "covered employee" those employees covered by a CBA, so long as the CBA meets certain conditions.
Notice to employees: In addition to posting requirements, the SD Ordinance requires that employers provide notice of the law to all employees at their time of hire.
Retention of earned leave upon transfer: Under the SD Ordinance, if an employee is transferred to a separate division, entity, or location in San Diego, the employee's previously earned but unused paid sick leave must be retained by the employee.
Reinstatement of earned leave upon rehire: Under the SD Ordinance, if an employee is separated but is rehired by the same employer within six months, all previously accrued but unused paid sick leave must be reinstated (no accrual cap). However, state law requires reinstatement if the employee is rehired within one year of separation (capped at 48 hours).

Minimum Wage

Effective January 1, 2016, the California state minimum wage was increased to $10.00 per hour. The SD Ordinance goes beyond what state law requires at this time. When the SD Ordinance goes into effect, San Diego's minimum wage will increase to $10.50 per hour for work performed within the City of San Diego. Subsequent minimum wage increases for San Diego and California are as follows:

Date San Diego California

January 1, 2017 $11.50/hour $11.00/hour

January 1, 2018 $11.50/hour $12.00/hour

January 1, 2019 TBD $13.00/hour

January 1, 2020 TBD $14.00/hour

January 1, 2021 TBD $15.00/hour

Compliance with the new SD Ordinance, as well as California's HWHFA, is extremely difficult to navigate. If you need assistance or if you have any questions about the contents of this article, please contact any member of the Firm. We can be reached at (818) 508-3700 or visit us online at www.brgslaw.com.

Sincerely,
Richard S. Rosenberg
Katherine A. Hren
Nicole K. Haynes

Ballard Rosenberg Golper & Savitt, LLP