Employee Benefits Compliance, State-Specific Information

San Diego Increases Minimum Wage ($9.75 in Jan 2015) and Mandates Paid Sick Leave

By Christopher W. Olmsted, © Ogletree Deakins
Reprinted with permission from www.HiringDoneRight.com and Christopher Olmstead with the Ogletree Deakins law firm.


If your organization currently has a location in San Diego this article will affect you.  The new San Diego ordinances increase the minimum wage and mandate paid sick leave for all private sector employers operating in the city of San Diego.  The paid sick leave mandate surpasses the new California requirements under AB 1522, which goes into effect July 1, 2015.  AB 1522 requires employers to provide most California employees 24 hours of paid sick leave per year.  See Leavitt article: Here

Also, Los Angeles is planning its own minimum wage increase which, if passed, will affect employers with employees in Los Angeles.

San Diego Minimum Wage

The San Diego City Council Aug. 18, 2014, overrode Mayor Kevin Faulconer’s veto of an ordinance raising the city’s minimum wage to $11.50 per hour and requiring employers to grant paid sick leave.

The council originally approved the Democratic-backed ordinance on a party-line vote of 6-3 on July 28, and Faulconer, a Republican, vetoed it on Aug. 8, saying it would force businesses out of San Diego.

The wage increase will be phased in over a three-year period. In January 2015, the minimum wage will increase to $9.75; in January 2016 it will increase to $10.50; and in January 2017 it will increase to $11.50. Thereafter, the minimum wage will increase on an annual basis as determined by a Consumer Price Index.

This increase edges ahead of California’s state minimum wage, which rose to $9 this month, and is slated to increase to $10 in January 2016.

The ordinance applies to all private sector employers, but the minimum wage is owed only to employees who work at least two or more hours per calendar week within city limits.

Business owners claim that the increase will put them at a competitive disadvantage vis-à-vis businesses outside of the city limits. Labor advocates, however, claim that low-wage earners cannot afford to live in San Diego.

San Diego Paid Sick Leave

The ordinance also requires employers to grant up to five days of paid sick leave per year beginning in 2015.

The sick pay provisions are numerous and technical, but employers can expect to see the following changes:

  1. Sick pay will accrue at the rate of 1 hour per 30 hours worked within city limits, without a cap.
  2. Employers may limit an employee’s use of sick leave to 40 hours in a benefit year.
  3. Accruals of up to 40 hours can carry over into the next year.
  4. Sick leave can be taken in a minimum of two-hour increments.
  5. Sick leave can be used for the employee’s own illness, medical appointments, caring for family members, and taking time off due to domestic violence and related incidents. Generally, medical documentation excusing the absence will be permitted for absences exceeding three days.

Notice Requirements and Penalties

Employers will be required to post workplace notices of the new ordinance. Businesses that violate the ordinance will be subject to civil litigation by aggrieved employees or an enforcement action by the city. Fines may be imposed in the amount of $1,000 per violation.
Businesses that employ workers within city limits should plan to update their policies before the end of this year.

Christopher W. Olmsted is a shareholder in the San Diego office of Ogletree Deakins and can be reached at christopher.olmsted@ogletreedeakins.com.