As we reported last month, San Diego voters approved minimum wage increases and paid sick leave mandates that exceed California state requirements. This week, the San Diego City Council certified the election results, making the new Minimum Wage and Sick Leave Ordinance effective as of July 11, 2016 – in other words, effective immediately. 

The City Council also simultaneously adopted an Implementing Ordinance, which provides a number of important modifications to (or clarifications of) the original voter passed ordinance. The key provisions of the Implementing Ordinance are as follows:

Amount and Use:

• Employers may cap an Employee’s total accrual of earned sick leave at 80 hours. The original ordinance had explicitly prohibited employers from capping accrual.
• Earned sick leave begins to accrue (1 hour for every 30 hours worked in the City) at the commencement of employment or on July 11, 2016, whichever is later, and an employee is entitled to begin using accrued Earned Sick Leave on the 90th calendar day following commencement of his or her employment or on July 11, 2016, whichever is later. After the 90th calendar day of employment or after July 11, 2016, whichever is later, an employee may use Earned Sick Leave as it is accrued.
• The Implementing Ordinance confirms that employers may limit an employee’s use of earned sick leave to 40 hours in a benefit year, but unused, accrued earned sick leave must be carried over to the following benefit year (subject to the above 80 hour cap).
• An employer may satisfy the accrual and carry-over provisions of the Ordinance if no less than 40 hours of earned sick leave are awarded to an employee at the beginning of each benefit year, regardless of the employee’s status as full-time, part-time, or temporary.
• The Implementing Ordinance confirms that an employer is not required to provide additional sick leave to the employee if the employer already provides an amount of paid leave (including paid time off, paid vacation, or paid personal days) sufficient to meet the Ordinance’s requirements, and allows the employee to use the paid leave for the same purposes and under the same conditions as the sick leave in the Ordinance.
• Employers may set a reasonable minimum increment for the use of earned sick leave not to exceed two hours.
• The Implementing Ordinance confirms that there is no payout of accrued sick leave upon separation, but that an employee rehired within 6 months of separation by the same employer must have previously accrued, unused sick leave restored.

Notice to Employees:

• By September 1, 2016, the Enforcement Office will publish the notice and bulletin materials to employers in English, Spanish, and any other language for which the San Diego County Registrar of Voters provides translated ballot materials. Employers then have until October 1, 2016 to publish this notice and bulletin.
• At the time of hire, or by October 1, 2016, whichever is later, an employer must provide each employee written notice of the employer’s legal name and any fictitious business names, address, and telephone number. The notice must be provided in the employee’s primary language.
• Written notice must also include information on how the employer satisfies the Ordinance’s requirements, including the employer’s method of earned sick leave accrual.

Penalties and Damages for Non-Compliance and Retaliation:

• Any employer who fails to comply with the notice and posting requirements is subject to a civil penalty of $500 for each employee who was not given appropriate notice, up to a maximum of $2,000.
• Also, any employer who violates “any requirement” of the Ordinance is subject to a civil penalty of no less than $500, but no more than $1,000 per violation. The Ordinance specifies that “each and every day that an Employer fails to pay an Employee Minimum Wage or fails to provide an Employee with Earned Sick Leave” constitutes a “separate and distinct” violation. 
• The Ordinance has a “no retaliation” requirement that provides for liquidated damages of double back wages or $1,000 (whichever is greater) for each violation not resulting in termination. If the employee was terminated for exercising rights provided in the Ordinance, then the employer is subject to double back wages or $3,000 (whichever is greater). In addition, employers who engage in retaliation also will be subject to a civil penalty “no less than $1,000, but no more than $3,000 per violation.”

Given that this Ordinance is effective immediately, any employers with a San Diego workforce, whether regular or periodic, should review their sick leave policies and practices for any necessary changes to comply with this new San Diego Minimum Wage and Sick Leave Ordinance.