Commencing January 2017, employers in San Diego may be subject to three separate paid sick leave laws: (1) the City of San Diego Paid Sick Leave and Minimum Wage Ordinance effective July 2016; (2) Executive Order 13706 which is applicable to federal contractors and takes effect January 2017; and (3) California’s Healthy Workplaces, Healthy Families Act. These three laws are summarized below.
Executive Order 13706:
President Obama signed Executive Order 13706 on September 7, 2015, which applies to covered federal contracts entered into on or after January 1, 2017. Under the Executive Order, employees of federal contractors can accrue 1 hour of paid sick time for every 30 hours worked, up to 56 hours (7 days) in a year. Employees will be permitted to use as much sick time as they have accrued, and may carry over accrued unused sick time from year to year while working for the same federal contractor. Contractors will not be required to pay employees for any unused paid sick time when employees leave their jobs, however employees will be entitled to get their unused sick time back if they return to work within a year of leaving. Pursuant to the Executive Order, a contractor’s existing paid time off policy could fulfill its obligations under the Executive Order so long as the policy provides employees with at least the same rights and benefits, including at least 56 hours (7 days) of paid sick time per year. The Executive Order will not supersede any state or local paid sick time laws requiring greater paid sick time.1
The San Diego Paid Sick Leave and Minimum Wage Ordinance:
On July 11, 2016, a new paid sick leave and minimum wage ordinance approved by San Diego voters came into effect. Under the new ordinance, employees within the City of San Diego are eligible for 1 hour of paid sick time for every 30 hours worked. Employees can earn up to 80 hours of paid sick time per year, however employers may cap the amount of paid sick time an employee may use at 40 hours (5 days) per year. Any unused accrued sick time must be carried forward to the following benefit year. An employer can satisfy the carry-over provisions of the ordinance if it provides employees with at least 40 hours (5 days) of paid sick time at the beginning of each benefit year.
Additionally, under San Diego’s new ordinance, all employees who perform at least two hours of work in the City of San Diego per year are entitled to a minimum wage of $10.50 for work performed inside the City’s geographic boundaries. The City of San Diego minimum wage will increase according to the following schedule:
California’s Healthy Workplaces, Healthy Families Act:
California employers who are not subject to Executive Order 13706 or the City of San Diego’s paid sick leave ordinance are still required to provide employees with at least three days of paid sick time under California’s Healthy Workplaces, Healthy Families Act of 2014. Effective January 1, 2015, the Act mandates that all employees who have worked in California for the same employer for 30 or more days are entitled to 1 hour of sick time for every thirty hours worked. Under the Act, employers may cap the amount of paid sick time a worker earns at 48 hours (6 days) per year, and may further cap the amount of sick time an employee can actually use at 24 hours (3 days) per year. Employees are permitted to carry forward accrued unused sick time if their leave is earned on an accrual basis. However, employers are not required to carry forward accrued sick time if the employer provides the full amount of paid sick time (24 hours or 3 days), at the beginning of each benefit year. Employers should confirm whether the cities or counties in which they have employees impose stricter local laws. In addition to the City of San Diego, other cities in California including San Francisco, Oakland, Emeryville, Santa Monica, Los Angeles, and Berkley have enacted paid sick time laws broader than the Healthy Workplaces, Healthy Families Act.
Please contact Chad T. Wishchuk, Esq., or Kathleen A. Donahue, Esq., of Finch, Thornton & Baird, LLP, or call us at (858) 737-3100 if you have any questions.1
All Executive Orders signed by President Obama, including Executive Order 13706, may be subject to repeal once President-Elect Trump takes office.
DISCLAIMER: This new law advisory is a publication of Finch, Thornton & Baird, LLP, for the purpose of providing information relating to recent legal developments. It is not intended, nor should it be used, as a substitute for specific legal advice, and it does not create an attorney-client relationship.
| Effective Date | Minimum Wage Rate |
|---|---|
| July 11, 2016 | $10.50 |
| January 1, 2017 | $11.50 |
| January 1, 2019 and each following year | Increase tied to Consumer Price Index (CPI) |
