July 16, 2014 City of San Diego Raises Minimum Wage and Mandates Paid Sick Leave

Earlier this week the San Diego City Council voted to join San Francisco, San Jose and several other cities across the nation as municipalities with higher minimum wages than those established by federal or state law. The council also voted to require employers to provide paid sick leave.  The council is scheduled to vote again on July 28 to officially adopt the ordinance.  The 6-3 vote in favor of the measure is sufficient to override an expected veto by Mayor Kevin Faulconer.


Currently the federal minimum wage is $7.25 per hour.  California’s minimum wage increased from $8 to $9 per hour on July 1 of this year, and is scheduled to rise again to $10 per hour on January 1, 2016.  Employees must be paid the higher of any minimum wage in effect, which means workers in San Diego are currently subject to the state minimum wage. 

The vote by the City Council will, for the first time, establish a minimum wage within the City of San Diego that will be higher than both the federal and state minimums.  San Diego’s minimum wage will apply to all private sector employees who work at least two or more hours per calendar week within the city limits.  These employees must be compensated for each hour worked within the city limits at the following minimum hourly rates: 

                        Beginning January 1, 2015:          $9.75
Beginning January 1, 2016:          $10.50
Beginning January 1, 2017:          $11.50 

Beginning January 1, 2019, the city’s minimum wage will increase in January of each year based on the prior year’s increase in the Consumer Price Index.

San Diego’s new paid sick leave mandate takes effect April 1, 2015, and requires employers to provide employees with one hour of paid sick leave for every 30 hours worked within the city limits.  Employees may begin using paid sick leave on July 1, 2015.  Paid sick leave may be used for the employee’s own illness or medical appointment, to care for an ill family member, or to take time off for reasons related to domestic violence.

Employers may require paid sick leave to be used in increments of at least two hours, and may limit an employee’s use of paid sick leave to 40 hours per year.  Employees will be allowed to carry over unused sick leave to the following year, but employers are not required to pay out unused sick leave upon the employee’s separation from employment.  Employers already providing paid sick leave that meets the requirements of the ordinance are not required to provide any additional sick leave.

The measure also requires employers to post notices of the new ordinance within the workplace by April 1, 2015, and to provide each new employee with written notice of the minimum wage and paid sick leave requirements after that date.  The city will make notice materials available to employers by April 1, 2015.

The ordinance also creates a city Enforcement Office to enforce the minimum wage and paid sick leave requirements, and establishes a civil penalty for most violations of up to $1,000.  Violations of the notice requirement may be assessed at $100 per employee, up to a maximum of $2,000.

What This Means

Business leaders are considering a referendum to overturn the ordinance.  In the meantime, employers who have employees working within the San Diego city limits (even if the employer is based outside the city) should plan to comply with the new minimum wage, sick leave, and notice requirements.

This E-Update was authored by Aaron A. Buckley.  For more information, please contact Mr. Buckley or any other Paul, Plevin attorney by calling (619) 237-5200.