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  • Kasper & Frank LLP

Workplace Alert: San Diego Minimum Wage and Sick Pay Requirements to Increase

Yesterday, San Diego voters overwhelmingly passed Proposition I, which approves the City of San Diego’s Earned Sick Leave and Minimum Wage Ordinance (“Ordinance”) originally passed by the City Council on August 18, 2014. As a result of this vote, San Diego’s minimum wage will increase and employees will be entitled to greater sick pay rights than those currently provided under California law. It appears the Ordinance is effective on July 7 – the date on which the election results are certified. San Diego employers must take immediate steps to ensure compliance.

Under the Ordinance, San Diego’s minimum wage will immediately increase to $10.50 an hour. San Diego’s minimum wage will increase again to $11.50 an hour on January 1, 2017, and, beginning on January 1, 2019, the minimum wage in the City will increase annually with the cost of living. In addition to these wage requirements, San Diego employees will be entitled to greater sick pay rights, including the right to use up to five days of sick pay annually.

The Ordinance generally applies to employees who perform at least two hours of work within the geographic boundaries of San Diego in one or more calendar weeks of the year and who are entitled to receive minimum wage. This means that employees who work even periodically in San Diego will be entitled to the protections of the Ordinance for the time they work in the City.

Notably, San Diego’s minimum wage and minimum sick pay requirements will differ from those of California as a whole. Employers must therefore review and update their policies and practices to ensure compliance with both local and state law. Where applicable requirements conflict, employees will be entitled to the minimum wage and sick pay requirements more favorable to them.

The Ordinance’s Key Sick Pay Provisions

Key sick pay provisions of the Ordinance include:

  • Employers must provide employees with one hour of sick pay for every 30 hours they work in the City.

  • Sick pay begins to accrue upon hire, but employers can limit use to the 90th day of employment.

  • Employers can limit an employee’s use of sick time to 40 hours a year – greater than California’s annual limit of 24 hours. However, unlike California’s sick pay law, which allows accrual to stop at 48 hours, sick pay accrual cannot be capped.

California’s Minimum Wage Will Also Be Increasing

California’s minimum wage is also increasing, but at a different rate than San Diego’s. On April 4, Governor Brown signed a bill that will gradually increase California’s minimum wage until it reaches $15 in 2022 for employers with 26 or more employees or 2023 for employers with fewer than 26 employees. While the bill grants the Governor some authority to suspend scheduled increases under certain conditions, California’s minimum wage is currently scheduled to increase as follows:

Employers with 26 or More Employees

  • January 1, 2017: $10.50/hour

  • January 1, 2018: $11.00/hour

  • January 1, 2019: $12/hour

  • January 1, 2020: $13/hour

  • January 1, 2021: $14/hour

  • January 1, 2022: $15/hour

Employers with 25 or Fewer Employees

  • January 1, 2018: $10.50/hour

  • January 1, 2019: $11/hour

  • January 1, 2020: $12/hour

  • January 1, 2021: $13/hour

  • January 1, 2022: $14/hour

  • January 1, 2023: $15/hour

Notice, Posting and Recordkeeping Requirements

San Diego employers will be required to post bulletins and notices, which the City will be publishing. Additionally, employers must create written or electronic records documenting wages and accrual of sick pay and retain such records for three years.

Please contact Lisa Frank or Brenda Kasper for additional information on compliance with Proposition I.

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