Benefit News

New Paid Leave and Minimum Wage Laws for Several California Cities

June 28, 2016

Los Angeles, San Diego, and Santa Monica join the chorus of other states and municipalities around the country in recently enacting paid sick leave and minimum wage laws. San Francisco's paid sick leave law was also amended. In addition, the City of Pasadena recently enacted a minimum wage law that goes into effect on July 1, 2016, that will raise its minimum wage to $10.50 per hour. (However, employers with 25 or fewer employees have an extra year to comply.)

These developments follow on the heels of California's statewide paid sick leave law, the "Healthy Workplaces, Healthy Families Act of 2014", that went into effect last year, and increases to the state's minimum wage rate that became effective January 1, 2016. Employers must comply with both laws and will now be required to accrue and provide paid sick time for most of their employees who work in these cities that may be in excess of State law requirements, which are intended to provide only minimum standards for paid sick leave.

California is not alone- several other states and the District of Columbia have paid sick leave laws in place, including Connecticut (2012), Massachusetts (2015), Oregon (2016), and Vermont (eff. January 1, 2017). In addition, over 20 municipalities throughout the country have their own paid sick leave and/or minimum wage ordinances in effect, the first being San Francisco (2007). Others include the California cities of Emeryville (2015), Oakland (2015) and Long Beach (2012) (applies to hotel workers only); Seattle (2012); New York (2014); Philadelphia (2015); Portland, OR (2016); and most recently Minneapolis and Chicago (both eff. July 1, 2017).

A summary of the key provisions in the Los Angeles, San Diego, and Santa Monica ordinances, as well as the amended San Francisco ordinance follows.

Summary of Recently Passed and Amended Paid Sick Leave and Minimum Wage Laws

Los Angeles

On June 1, 2016, the Los Angeles City Council passed Ordinance 184320, amending the City's minimum wage ordinance that was passed in 2015 to include the requirement for most employers to provide paid sick leave for employees who work within the Los Angeles city limits.

Los Angeles: Amended Paid Sick Leave Policy
Effective Date
  • 7/1/16 (Employers with at least 26 employees)
  • 7/1/17 (Employers with less than 26 employees)
Eligible Employees
  • Employees who perform at least 2 hours of work per week within the city
    AND
  • Who work at least 30 days or more within a year from commencement of employment
    AND
  • Are entitled to minimum wage under state law
Accrual Rate
  • 1 hour per 30 hours worked, beginning the later of July 1, 2016, or first day of employment, up to 48 hours
    OR
  • 48 hours at beginning of each year of employment, calendar year, or 12-month period
Usage
  • After 90 days of employment (or July 1, 2016, if later)
  • At least 48 hours per year of employment, calendar year, or 12-month period
Carryover
  • Unlimited but could be capped at 72 hours or more
  • No required cash payout at termination
  • Reinstatement rights upon rehire within 1 year of separation
Minimum Wage (7/1/16)
  • $10.50/hour (Employers with at least 26 employees)
  • $10.00/hour (Employers with less than 26 employees)

The complete ordinance is available at http://clkrep.lacity.org/onlinedocs/2014/14-1371_ORD_184320_6-2-16.pdf.

San Diego

On June 7, 2016, San Diego voters approved a local minimum wage and paid sick leave ordinance (Ordinance O-20390). Initially passed by the San Diego City Council in 2015, the effective date of the Ordinance had been stayed pending voter approval.

San Diego: Amended Paid Sick Leave Policy
Effective Date
  • 10 days after ballot results are confirmed (est. late July)
Eligible Employees
  • Employees who perform at least 2 hours of work per week within the city
    AND
  • Are entitled to minimum wage under state law
Accrual Rate
  • 1 hour per 30 hours worked, beginning on the first day of employment (or effective date of law, if later)
  • Accrual is in 1-hour unit increments, no accrual for fractional hours
  • Unlimited, no front-loading option
Usage
  • Begin after 90 days of employment (or effective date of law, if later)
  • Use as accrued up to 5 days (40 hours) minimum allowed
Carryover
  • Unlimited carryover must be permitted
  • No required cash payout at termination
  • Reinstatement rights upon rehire within 6 months of separation
Minimum Wage (7/1/16)
  • $10.50/hour

The San Diego ordinance is available at http://docs.sandiego.gov/council_reso_ordinance/rao2014/O-20390.pdf.

San Francisco

Also on June 7, 2016, San Francisco voters approved Proposition E, amending the city's Paid Sick Leave Ordinance (PSLO) to be more compatible with California's paid state leave law. Proposition E amends the PSLO to parallel certain provisions in the state law providing broader protections for employees, including:

  • Accrual of paid sick leave beginning on the first day of employment (versus after 90 days under the original PSLO);

  • Reinstatement of unused sick leave upon rehire within one year of termination with the same employer;
  • The option to front-load (advance) up to 24 hours (3 days) of paid sick leave at the beginning of the year; and
  • The use of sick leave for purposes consistent with state law, including use for legal or other purposes when the employee is a victim of domestic violence, stalking, or sexual assault; as well as to care for a biological, adoptive or foster parent, step-parent, or guardian of an employee's spouse or domestic partner.

San Francisco: Amended Paid Sick Leave Policy
Effective Date
  • 2/5/07, as amended, 1/1/17
Eligible Employees
  • Employees who perform services within the city
  • Includes full-time, part-time, temporary employees
Accrual Rate
  • Until 1/1/17, 1 hour per 30 hours worked, beginning after 90 days of employment
  • After 1/1/17, 1 hour per 30 hours worked, beginning first day of employment
  • Up to 72 hours (40 hours for employers with 10 or fewer employees)
  • Front-loading options up to 24 hours (3 days) permitted at beginning of each year of employment, calendar year, or 12-month period
Usage
  • Begin after 90 days of employment
  • Up to accrual amount each year of employment, calendar year, or fiscal year
Carryover
  • Unlimited
  • No required cash payout at termination
  • Reinstatement rights upon rehire within 1 year of separation
Minimum Wage (7/1/16)
  • $13.00/hour for hotel workers

San Francisco's Proposition E and amended sick leave law is available at http://voterguide.sfelections.org/en/paid-sick-leave.

Santa Monica

On May 10, 2016, the Santa Monica City Council adopted Ordinance No. 2515, amending the city's municipal code to require paid sick leave for most employers with employees working in the city. This followed the adoption of Ordinance No. 2509 earlier this year requiring a minimum wage for employees and a living wage for hotel workers.

Santa Monica: Amended Paid Sick Leave Policy
Effective Date
  • 1/1/17 (Accrual rates increase 1/1/18)
Eligible Employees
  • Employees who perform at least 2 hours of work per week within the city
    AND
  • Are entitled to minimum wage under state law
Accrual Rate
  • 1 hour per 30 hours worked
  • Accrual is in 1-hour unit increments, beginning on hire date, no accrual for fractional hours
  • Employers with at least 26 employees, up to 40 hours annually (1/1/17) and up to 72 hours annually (1/1/18)
  • Employers with less than 26 employees, up to 32 hours annually (1/1/17) and up to 40 hours annually (1/1/18)
  • Accrual could be determined using calendar year, fiscal year, or year of employment
  • Front-loading option
Usage
  • Begin after 90 days of employment
  • Up to accrual amount each year of employment, calendar year, or fiscal year
Carryover
  • Up to maximum accrual of 40 hours (or 72 hours) unless employer policy is more generous.
  • No required cash payout at termination
  • Law is silent on reinstatement rights
Minimum Wage (7/1/16)
  • $10.50/hour (Employers with at least 26 employees)
  • $10.00/hour (Employers with less than 26 employees)
  • $13.25/hour for hotel workers

Santa Monica's Ordinance No. 2515 is available at http://qcode.us/codes/santamonica/ (see "CodeAlert - Recently Passed Ordinances").

For additional information, please contact your Burnham Benefits Consultant or Burnham Benefits at 949-833-2983 or inquiries@burnhambenefits.com.


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