Three California Municipalities Enact New Minimum Wage and Paid Sick Leave Laws
The trend toward local regulation of employment laws continues in California with three new local wage and hour enactments.
On June 7, 2016, San Diego voters passed a ballot initiative containing two provisions for hourly workers. First, San Diego’s new minimum wage will be $10.50 per hour once the ballot results are confirmed, which is expected to be in mid-July. Second, San Diego will have its own paid sick leave policy of five days (40 hours) – which is in excess of the state law that allows employers to limit use of accrued paid sick leave to three days (24 hours).
Like the state law, San Diego’s paid sick leave will accrue at one hour for every 30 hours worked and cannot be used until after 90 days of employment. Also like the state law, San Diego’s sick leave initiative allows accrued leave to be front loaded or accrued, and it must be carried over year to year.
The San Diego law differs from state law in that employees may accrue an unlimited amount, but employers may limit the amount an employee can use to 40 hours per year. Note that even if a business is not within San Diego city limits, if an employee performs at least two hours of work per week within San Diego, they accrue paid sick leave for the hours they work within the city. This will dramatically affect delivery drivers, caterers, construction workers, or any company with a mobile workforce. (Note that in-home supportive services, workers employed under a publicly subsidized summer or short-term youth employment program, or any student employee, camp, or program counselor of an organized camp under State law are exempted.) The new law adds the administrative burden of tracking not only how much each employee works, but also where they work.
Beginning July 1, 2016, Los Angeles employers with at least 26 employees – and, on January 1, 2017, employers with fewer than 26 employees – must comply with two new laws.
First, Los Angeles employers must provide six days (48 hours) of paid sick leave per year. Like the San Diego law, even if a business is not within city limits, if an employee performs at least two hours of work per week within the city, they accrue paid sick leave for the hours they work within the city limits. Like the state law and the San Diego law, the new Los Angeles law requires that all employees receive this sick leave (or participate in an equally generous PTO plan), including part-time and temporary employees, who must accrue this benefit at the rate of one hour for every 30 hours worked, and they must be able to access it after 90 days of employment. Also like the state law, the benefit may be front loaded or accrued and carried over to the next year.
Second, the new minimum wage will be $10.50 an hour starting July 1, 2016.
Starting January 1, 2017, Santa Monica employers with more than 50 employees must provide nine days (72 hours) of paid sick leave. The application, accrual, and carryover procedures are the same as the San Diego and Los Angeles laws.
What to Do
The increasing trend toward localized employment regulation makes for a challenging compliance environment. Now more than ever, employers should consult counsel to stay abreast of these new and rapidly-changing laws.