Los Angeles and San Diego Impose Higher Local Minimum Wage and New Sick Leave Laws

Posted: June 15, 2016 | News

The cities of Los Angeles and San Diego have joined Pasadena, Santa Monica, and at least 12 Northern California cities by enacting legislation to increase the minimum wage above California’s state standards. Employers with employees working in the City of San Diego must pay those employees a minimum wage of $10.50 per hour when they perform work in the City of San Diego, regardless of the number of employees that the business may have. Employees qualify for the increased minimum wage
if they perform at least two hours of work in the City of San Diego in one or more calendar weeks of the year. Effective January 1, 2017, San Diego’s minimum wage will increase again to $11.50 per hour and thereafter, will be adjusted in accordance with the consumer price index.

On July 1, 2016, employers with 26 or more employees in the City of Los Angeles must begin paying those employees a minimum wage of $10.50 per hour. The minimum wage is scheduled to increase each July 1 until the minimum wage reaches $15.00 per hour in 2020. Minimum wage increases for employers with 25 or fewer employees are delayed one year. The minimum wage will be adjusted for inflation on July 1, 2022 and every year thereafter.

Additionally, employees who work in the City of Los Angeles at least two hours in a particular week must be provided 48 hours of paid sick leave per year beginning July 1, 2016. Affected employers have the option of providing the leave: (a) in a lump sum at the beginning of each year of employment, on a calendar year basis, or another 12 month period, or (b) in increments of one hour of paid sick leave for every 30 hours worked. Accrual of paid sick leave may be capped at 72 hours. Under the new law, employees may use the leave to care for an individual related by blood or “affinity whose close association with the employee is the equivalent of a family relationship.”

The City of San Diego’s paid sick leave ordinance was approved by voters in June and covers all employers regardless of size. Employees who work in the City of San Diego will accrue one hour of paid sick leave for every 40 hours worked. Unused paid sick leave carries over to the next year with no maximum accrual cap permitted; however, employers may limit use to 40 hours per year. Employers may require employees to provide reasonable notice of an absence and documentation of absences in excess of three days. The minimum wage and paid sick leave laws have some additional requirements and nuances, so be certain to review the new laws carefully.

Recommendations for Employers:

1. Update paid sick leave and/or paid time off policies to ensure compliance with California state law and the local ordinance(s). Employers must comply with the law that provides greater benefits to employees. Employers are not required to pay employees for accrued but unused sick days upon separation of employment.

2. Post the local city minimum wage and paid sick leave poster(s) and provide information in writing to all new employees at the time of hire.

3. Review payroll systems to ensure compliance with recordkeeping.

Colleen M. McCarthy

Colleen M. McCarthy, Esq. is a Partner and chairs the Firm’s Employment Practices Group. She has dedicated her practice to representing and protecting employers, with a particular emphasis on risk mitigation through preventative counseling and sound practical advice. For 15 years, Ms. McCarthy has counseled employers about the complicated employment laws that impact their businesses to ensure that they are in compliance, and to reduce the chance of costly litigation. Ms. McCarthy may be reached by phone at (949) 608-6900 or email cmccarthy@ferruzzo.com