On June 7, 2016, voters approved “Proposition I,” which is set to raise the minimum wage in the City of San Diego and provide the opportunities for workers to earn up to 5 paid sick days (40 hours) per year.

While the official results are still being tabulated and certified, enactment of “Proposition I” will result in a minimum wage increase and changes to paid sick leave laws no later than July 7, 2016.

Background Information

The minimum wage fight in San Diego started in 2014, when the City Council passed the Earned Sick Leave and Minimum Wage Ordinance to raise the minimum wage and provide paid sick leave to employees working in the City of San Diego.

Mayor Kevin Faulconer vetoed the ordinance, only to have the veto overridden by the City Council.  Prior to enactment of the ordinance, the San Diego Small Business Coalition and San Diego Regional Chamber of Commerce organized a petition drive to delay enactment and turn the issue over to voters.

The Earned Sick Leave and Minimum Wage Ordinance appeared as “Proposition I” on the June 2016 ballot.  As of this Client Alert, 63% of voters have voted in favor Proposition I.

What does “Proposition I” do?

“Proposition I” will do two things for employees working at least two hours of work per year within the geographic borders of the City of San Diego:

  • It will raise the minimum wage for non-exempt (hourly) employees to $10.50 per hour, with an additional minimum wage increase to $11.50 on January 1, 2017.  There may be additional annual increases starting on January 1, 2019, based on the cost of living or to match scheduled minimum wage increases implemented by the federal government or the State of California.
  • It will allow employees to earn up to five days (40 hours) of paid sick leave every calendar year.

The minimum wage increase will only impact non-exempt (hourly) employees.  Exempt (salaried) individuals will not see a pay increase as a result of Proposition I; however, their salary will be impacted by recent changes in federal law and in state law, which will go into effect starting in December 2016.  Please review our prior Client Alert for more information.

The paid sick leave will impact all employees, regardless of whether they are non-exempt/exempt or part-time/full-time.

When Will “Proposition I” be in effect?

The Earned Sick Leave and Minimum Wage Ordinance was originally set to raise the minimum wage and provide paid sick leave starting on January 1, 2015, with additional minimum wage increases scheduled for January 1, 2016, and January 1, 2017.

While the minimum wage increases will not be applied retroactively, the minimum wage increase scheduled for January 1, 2016, and the paid sick leave provisions will go into effect as soon as election results are certified.  Certification occurs within 30 days – in this instance, by July 7, 2016.

Is There a Delay for Small Businesses?

No.  This impacts all employees working in the City of San Diego as soon as the results of the June 7 election are certified.

What are my next steps?

First, you will need to post notice of the new Earned Sick Leave and Minimum Wage Ordinance at your worksite, in the same location as your other wage and hour posters.  The new posting will be available from the City of San Diego by the enactment date – normally, these are free of charge.  You must post in English and in any language that is spoken by at least 5% of the employees at the job site.

Second, you will need to review your employee salaries and schedule minimum wage increases for any non-exempt (hourly) employees, to ensure they are making a minimum hourly wage of at least $10.50 per hour, no later than July 7, 2016.

Third, you will need to review your paid sick leave and make changes to reflect the new requirements:

  • The paid sick leave will be earned at a rate of 1 hour of paid sick leave for every 30 hours of work completed.  While you can limit use of paid sick leave to 40 hours per calendar year, you must continue to allow for the accrual of paid sick leave and rollover of unused, accrued sick leave to the next calendar year.  This is different from the State of California, which allows accrual to stop once 24 hours of paid sick leave are earned.
  • The paid sick leave can be provided as a lump sum of 40 hours of paid sick leave per year, with rollover of any unused, accrued sick leave to the next calendar year.  This is different from the State of California, which permitted unused, accrued sick leave to “expire” at the end of each calendar year when given as a lump sum.
  • The City of San Diego’s paid sick leave ordinance allows paid sick leave to be used for more reasons that the State of California.  Paid sick leave may be used for any of the following purposes:
    • Employee’s own illness, injury, or medical condition.
    • Employee’s absence for purposes of obtaining a professional diagnosis or treatment of employee’s own medical condition.
    • Employee’s absence for any other medical reason, such as pregnancy or obtaining a physical examination.
    • Employee providing care or assistance to a family member with the family member’s illness, injury, or medical condition, including obtaining a professional diagnosis or treatment of a medical condition.
    • Employee use of “safe time,” which is time away from work so the employee can obtain services as a result of domestic violence, sexual assault, or stalking of the employee or employee’s family member.
    • Closure of business by a public health official due to a public health emergency, or to provide care to a child if a child care provider or school is closed by a public health official due to a public health emergency.

A “family member” is a child, spouse, parent, grandparent, grandchild, sibling, stepchild, and stepparent.

  • If an employee leaves employment and is rehired by the same employer within 6 months, all accrued but unused paid sick hours must be reinstated.  This is different from the State of California, which does not require reinstatement of leave after rehire.

If you have any questions, please contact Katie Spero at katie@craftbeerattorney.com to discuss.