Goodwin Insights June 22, 2017

Reminder: Keep An Eye On Changes to Local Paid Sick Leave and Minimum Wage Requirements

California’s paid sick leave law went into effect on July 1, 2015, and applies to all employers regardless of size. Pursuant to the law, all employees (full, part-time and temporary), who work in the state for 30 or more days out of the year, are entitled to accrue paid sick leave at the rate of one hour for every 30 hours worked. While employees are entitled to start accruing on the first day of employment, an employer may require employees to be employed for 90 days before starting to use the accrued paid sick leave. The law also includes very technical requirements for accrual, usage, carryover of accrued time and recordkeeping.

Many assumed that with the passage of the state law, local cities and counties would hold off on passing their own paid sick leave mandates. However, a number of cities and counties have passed their own paid sick leave ordinances since the statewide paid sick leave law came into effect. Employers with workers in California should be aware that local ordinances that provide greater sick leave benefits to employees are not preempted by the state law. Where the laws differ, employers must comply with the more generous employment standard. This means that employers with employees performing work in the city-limits of San Francisco, Oakland, Emeryville, Berkeley, San Diego, Santa Monica and Los Angeles must comply with both state and local paid sick leave laws. For more information about any or all of the ordinances applicable to employees working in these locations, please contact Goodwin’s California employment experts.

In the last year, the effort to increase the minimum wage to $15 per hour gained momentum, with increases taking effect at a state and local level:

Effective Date

Jurisdiction

Minimum Wage Rate

January 1, 2017

All California

$10.50/hour (employers with 26+ employees)

January 1, 2017

All California

$10/hour (employers with 25 or fewer employees)

January 1, 2017

Santa Clara (city)

$11.10/hour

January 1, 2017

San Diego

$11.50/hour

January 1, 2017

San Mateo, Palo Alto, Los Altos, Cupertino

$12/hour

January 1, 2017

Sunnyvale, Mountain View

$13/hour

July 1, 2017

Los Angeles (City and unincorporated areas of L.A. county), Santa Monica, Malibu

$12/hour (employers with 26+ employees)

$10.50/hour (employers with 25 or fewer employees)

July 1, 2017

Milpitas

$11/hour

July 1, 2017

San Francisco

$14/hour

July 1, 2017

Emeryville

$15.20/hour (employers with 56+ employees)

$14/hour (employers with 55 or fewer employees)

July 1, 2017

San Jose

$12/hour


Keep in mind that complying with minimum wage requirements is not the only reason it is important to stay updated on increases of minimum wage rates. One of the qualifications of the executive, professional, or administrative exemptions from overtime laws is that an employee is paid a salary no less than two times the state minimum wage. Currently, this means that exempt employees in companies with 26+ employees must be making an annual salary of $43,680 and for those at smaller employers must be making an annual salary of $41,600. Thus, as the state minimum wage increases, then employers need to ensure that exempt employees are still meeting the salary requirement.