New Los Angeles and San Diego Minimum Wage and Sick Leave Ordinances
By: Kyle D. Kring and Tyler D. Kring
Recently passed ordinances in the cities of San Diego and Los Angeles will soon become effective, leaving employees with higher minimum wages and an increase in paid sick leave time. Both cities are adopting similar, but slightly different, systems that force minimum wages to gradually rise over the next five years and paid sick leave hours increase. This article discusses both cities ordinances and the impact they will have on the employer and employee. It is important to note that despite the new local ordinances, cities must abide by existing state and federal law as well. Where there are differences between the authorities, the employer must follow the law that is most generous and beneficial to the employee.
The City of San Diego’s new Paid Sick Leave and Minimum Wage Ordinance (O-20390), Proposition I, was voted on June 7, 2016 and passed shortly thereafter. The ordinance will become effective as soon as the vote is certified, likely sometime in early July 2016.
Once the ordinance becomes effective, the minimum wage will automatically raise to $10.50/hour. The next increase will occur shortly after, on January 1, 2017, raising the wage to $11.50/hour. Beginning January 1, 2019, the minimum wage will increase annually based on the cost of living determined by the prior year’s Consumer Price Index.
The passage of Proposition I also changes the amount of hours an employee is entitled to for paid sick leave. Employees can use up to 40 hours per year. For every 30 hours worked, an employee earns one hour of paid sick leave. The ordinance does not set an accrual cap although employers may limit the amount of paid sick leave to 40 hours. If earned hours are not used then they must carry over to the next year.
Click here to view the full text of Ordinance O-20390.
|City of San Diego Minimum Wage|
|Current Minimum Wage||$10.00 (CA Min. Wage)|
|Ordinance Effective Date (July 2016)||$10.50|
|January 1, 2017||$11.50|
|January 1, 2019||Increase with the cost of living annually based on the prior year’s Consumer Price Index for Urban Wage Earners and Clerical Workers.|
Earlier this month, the City of Los Angeles passed the Los Angeles Minimum Wage Ordinance (O-184320). On July 1, 2016 the ordinance becomes effective, requiring employers to pay a higher minimum wage and provide more sick leave hours.
The ordinance raises the minimum wage at different increments based on employers with 26 employees or more and employers with 25 employees or less. The increments and wage amounts are shown in the chart below. In five years, both categories will set the wage at $15.00/hour on July 1, 2021. On July 1, 2022, the minimum wage will be increased annually based on the Consumer Price Index.
The minimum wage ordinance also provides an increase in paid sick leave days. Employers can choose one of the two following options: (1) granting at least 48 hours to an employee at the beginning of each year of employment, calendar year, or 12-month period; or (2) providing one hour of paid sick leave for every 30 hours worked. A paid sick leave must carry over to the next year although employers may set a cap of at least 72 hours.
Click here to view the full text of Ordinance O-184320.
|City of Los Angeles Minimum Wage|
|Effective Date||Employers w/ 26+ Employees||Employers w/ 25 or fewer Employees|
|July 1, 2016||$10.50||$10.00 (CA Min. Wage)|
|July 1, 2017||$12.00||$10.50|
|July 1, 2018||$13.25||$12.00|
|July 1, 2019||$14.25||$13.25|
|July 1, 2020||$15.00||$14.25|
|July 1, 2021||$15.00||$15.00|
|July 1, 2022||Increase with the cost of living annually based on the prior year’s Consumer Price Index for Urban Wage Earners and Clerical Workers.|
Remedies for Violation
Employers who violate the provisions of the ordinances may be subject to legal action or civil penalties. Each city will have enforcement divisions which can impose penalties of up to $1,000 per violation for any violation, except notice and posting violations. Penalties for notice and posting violations are $100 per employee up to $2,000. Employees can also bring an action for back wages and liquidated damages, reinstatement, reasonable attorney fees and costs.
For more information on how these ordinances may affect your compensation and sick leave or PTO plans please contact a labor and employment attorney at Kring & Chung, LLP.