On November 7, 2006, San Francisco voters approved Proposition F, a new employee benefits law that mandates that employers provide paid sick leave to all employees who work in San Francisco County. The so-called Sick Leave Ordinance takes effect on February 5, 2007, and includes a number of startling requirements that will force virtually all employers with San Francisco-based employees to adjust their personnel policies.

Required leave

Under the Sick Leave Ordinance, all employees who work within the geographic boundaries of the City and County of San Francisco are entitled accrue paid sick leave on an hours worked basis. Employers must provide one hour of paid sick leave for every 30 hours worked. For example, an employee who works 40 hours per week, with two weeks of vacation and 10 holidays, will be entitled to approximately 63 hours of paid sick leave each year. Employees only accrue sick leave up to a maximum cap specified in the ordinance. Once the cap is reached, employees must use some of their accrued sick leave before they may accrue additional leave time. For businesses with ten or more employees, the required sick leave is capped at 72 hours. For small employers (fewer than ten employees), employees may accrue up to 40 hours of sick time.

The ordinance defines employee as “any person who is employed,” including temporary and parttime workers, regardless of where their employers are based. However, because the ordinance includes a 90-day waiting period for employees hired after February 5, 2007, temporary workers who are hired after that date and who are employed for less than 90 days are effectively excluded from the ordinance’s coverage. The broad definition also arguably covers employees exempt from overtime and minimum wage laws, for which employers typically do not track the number of hours worked. With respect to these employees, application of the ordinance will prove particularly difficult.

Employees must be allowed to carry over their unused sick leave from year to year. However, unlike paid vacation, employers are not required to cash out unused sick leave upon termination of employment.

Permitted uses of sick time

Employees may use paid sick leave in a number of ways. First, sick time may be used for an employee’s own illness, injury, medical care, treatment, or diagnosis, including medical appointments. Employers also may require employees to take paid sick leave for absences due to the employees’ own serious medical condition or illness, rather than just counting the absence as unpaid family and medical leave.

Second, employees may use paid sick leave to care for a sick child, spouse, parent, domestic partner, child of a domestic partner, sibling, grandparent, or grandchild (including steprelationships). As with California’s existing “kin-care” law, a domestic partner includes a partner registered “under any state or local law.”

Finally, the law provides a wholly new type of permissible use for sick leave benefits: employees who do not have a spouse or domestic partner may designate another person for whom the employee may provide care while using paid sick leave. Employees must make this designation within 10 workdays after having worked for 30 hours, but employees must be given a 10-workday window in which to change their designation or make a new designation on an annual basis. The law does not specify whether this yearly designation must occur one year after an employee’s initial designation or whether employers may offer an annual open designation period for all employees.

The Sick Leave Ordinance allows employers to request “reasonable notification” in advance of the use of sick time, but does not define what type of notice employers may require. The ordinance also does not permit employers to prohibit employees from taking leave if they do not provide reasonable notice.

Employers may take “reasonable measures” to verify that an employee’s use of sick time is lawful, but again, the ordinance does not define what measures are reasonable (e.g., requiring medical documentation).

Record-keeping, notice and enforcement

The new law requires employers to retain records of employee sick leave accrual and usage for a period of four years. If an employer fails to keep appropriate records and there is a dispute over accrual or usage, the employer will be presumed to be non-compliant absent clear and convincing evidence to the contrary.

Employers also must post a notice of the new leave rights in English, Spanish, and Chinese, as well as any other language spoken by more than five percent of the employer’s San Francisco workforce. The posting must be put in a conspicuous place and must be updated on December 1 if there was a change in languages spoken by the workforce during the year.

Employers may not retaliate against employees who take paid sick leave. Astoundingly, the termination of an employee within 90 days after the employee has used paid sick time raises a rebuttable presumption of retaliation, subjecting employers to discipline. Additionally, employers may not count paid sick leave in determining whether an employee should be disciplined or discharged for excessive absences.

The ordinance also provides a number of administrative and civil enforcement mechanisms. The San Francisco Office of Labor Standards Enforcement may investigate possible violations and order appropriate relief. If the agency determines that a violation has occurred, it also may order reinstatement, back pay, the payment of sick leave, the payment of a penalty, or any other remedy deemed appropriate.

Employees, other injured persons or the City Attorney also may bring a civil action for noncompliance. The “other injured persons” provision creates a right of action in favor of an employee’s ailing family member or other care recipient for whom the employee would have provided care if paid sick leave had been provided. A prevailing employee may be entitled to reinstatement, back pay, payment of sick leave, liquidated damages, injunctive relief, and attorneys’ fees and costs.

Recommended action

Employers with workers in San Francisco should review their personnel policies to determine whether they need revision in light of with the new law. Employers also must have reliable procedures in place for recording sick leave accrual and usage, and such systems must be able to track the hours worked by exempt employees, whose hours typically are not recorded. Employers may comply with the ordinance by providing “paid time off” or PTO benefits to employees. However, employers should confirm that their PTO policies provide—at a minimum— the number of sick leave hours required under the new law.