Last week, San Diego became the latest jurisdiction to catch the paid sick leave and minimum wage bug that has been spreading throughout the country in 2014.  Specifically, on Monday, July 28, 2014, the San Diego City Council gave final approval to the City of San Diego Earned Sick Leave and Minimum Wage Ordinance (the “Ordinance”). While San Diego Mayor Kevin Faulconer has indicated an intention to veto the Ordinance, it is still likely to be implemented since the City Council can override a veto with six votes, and the Ordinance passed by a vote of six to three.

Minimum Wage

As suggested by the Ordinance’s name, San Diego’s minimum wage is set to undergo significant changes, increasing incrementally to $11.50 by 2017.  The Ordinance will raise the local minimum wage to $9.75 per hour on January 1, 2015, then to $10.50 per hour on January 1, 2016, and finally reaching the $11.50 mark a year later.  It also provides that beginning on January 1, 2019, and each subsequent year thereafter, the city’s minimum wage will be indexed to inflation.

Currently, San Diego’s minimum wage is connected to the California state minimum, which, as we previously reported, was raised last month from $8 to $9 per hour.

Paid Sick Leave

The paid sick leave portion of the Ordinance requires employers, regardless of the number of employees, to provide one hour of paid sick leave for every 30 hours of paid work performed in San Diego, up to a maximum of 40 hours (5 calendar days) of sick leave in a year. Notably, employers that maintain a paid leave policy equal to or more generous than the Ordinance’s requirements need not offer additional leave to employees, provided that time off can be used under the same conditions.  The Ordinance makes San Diego the second city in California to have passed a paid sick leave law, following the lead of San Francisco, which has mandated paid sick leave since February 5, 2007.

If Mayor Faulconer and the City Council hold true to form, San Diego employees will begin accruing paid sick time on April 1, 2015, or the commencement of their employment, whichever is later.  Employees are then entitled to start using their earned sick leave 90 days after they begin their employment or on July 1, 2015, whichever is later.  Employees will also be able to carry over up to 40 hours of accrued, but unused paid sick time to the next year.  However, employers are not required to provide an employee with more than 40 sick leave hours in any single year, thereby preventing employees from “stockpiling” sick leave hours from one year to the next.

The Ordinance creates a private right of action for individuals claiming harm under the earned sick leave law.  Claimants are entitled to all legal and equitable relief, including, but not limited to, the payment of back wages, damages for an employer’s denial of the use of accrued earned sick leave, reinstatement of employment or other injunctive relief, and reasonable attorney’s fees and costs.  Furthermore, employers could face various civil penalties—capped at $2,000—for violating the Ordinance’s provisions.

For more details on San Diego’s mandatory paid sick leave law, including a) the circumstances employees can use the paid sick leave, b) employer rights and limitations under the law, c) notice and posting requirements, and d) record retention requirements, please see our previous Management Alert.