Executive Summary: On June 7, 2016, San Diego voters voted in favor of a proposed two-fold Ordinance, which will increase the City's minimum wage rate and allow employees working within the San Diego city limits to earn one hour of paid sick leave for every 30 hours worked.

The Ordinance will take effect immediately upon approval by the City Council, which will likely occur by mid-July.

Effect on Minimum Wage

When the Ordinance takes effect, employees working within the City will be entitled to be paid a minimum wage of $10.50 an hour.  On January 1, 2017, the minimum wage rate will increase to $11.50 an hour.  Beginning January 1, 2019, the minimum wage rate will increase annually to an amount that corresponds to the prior year's increase – if any – in the cost of living.  

The Ordinance will apply to any employee who works at least two hours within the City of San Diego in "one or more calendar weeks of the year" and who would normally be entitled to minimum wage under California minimum wage laws. The Ordinance provides for a few limited exceptions to the definition of employee, and specifically states that "employee" does not include any person who is employed as an independent contractor under the California Labor Code.    

Earned Sick Leave Terms

Once the Ordinance goes into effect, employers must also provide employees with one hour of sick leave for every 30 hours worked by the employee within the boundaries of the City.  Earned sick leave must be compensated at the same hourly rate or other measure of compensation as the employee earns from his or her employment at the time the employee uses the earned sick leave.  Employers have the option to cap theuse of sick leave at 40 hours in a benefit year or 12-month period.  However, employers must allow employees to continue to accrue earned sick leave, and any unused sick leave must be carried over to the following benefit year.  

The Ordinance specifically highlights different reasons for which the earned sick leave may be used, including for the employee's own medical condition or for a covered family member's medical condition.  In addition, employees may use earned sick leave if a public health emergency causes an employee's workplace or a child's school or child care provider to close. For an absence of more than three consecutive work days, an employer may require reasonable documentation that the use of earned sick leave was for a reason permitted under the Ordinance.

Employers will be required to post a notice in the workplace informing employees of the current minimum wage and of their rights to the minimum wage and earned sick leave, including information about accrual and use of sick leave, the right to be free from retaliation, and the right to file a complaint with the City Enforcement Office or court of competent jurisdiction.  The Ordinance requires the City to publish and provide a template notice suitable for use by employers.