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New Trend in Employee Benefits?: San Francisco Mandates That Employers Provide Paid Sick Leave to Employees

December 4, 2006

In the November 2006 election, San Francisco voters overwhelmingly voted for Proposition F, referred to as the "Paid Sick Leave Ordinance." (Proposition F, San Francisco Admin. Code, Section 12W.2(d).) As Proposition F’s title implies, the new Ordinance mandates that employers provide a certain amount of paid sick leave to employees working in San Francisco. This Employment Law Alert provides a brief explanation of the new Ordinance, which takes effect February 5, 2007.

What employers must comply? Every employer who employs individuals within the City and County of San Francisco must comply with the Paid Sick Leave Ordinance.

What employees are eligible to receive paid sick leave? Every employee who works within the City and County of San Francisco is eligible for this benefit. These employees include part-time employees, temporary employees, and participants in Welfare-to-Work Programs.

How much paid sick leave must an employer provide to each employee? Employers must provide one hour of paid sick leave for every 30 hours an employee works after February 5, 2007. This means that a full-time employee will accrue 69 hours (almost 8.5 days) every year.

Every employee who works within the City and County of San Francisco is eligible for this benefit. These employees include part-time employees, temporary employees, and participants in Welfare-to-Work Programs. Employers must provide one hour of paid sick leave for every 30 hours an employee works after February 5, 2007. This means that a full-time employee will accrue 69 hours (almost 8.5 days) every year.

Can an employee "carry over" accrued paid sick leave? Yes, but only to a limited extent. The Ordinance limits accrual to a maximum of 40 hours of paid leave for employers with less than 10 employees and 72 hours for employers with 10 or more employees.

Must an employer pay out unused paid sick leave at termination? Unlike paid time off or vacation time, an employer is not required to pay out accrued sick leave to a terminating employee.

For what purposes must employees be permitted to use paid sick leave? Employees can use the paid sick leave for (1) their own physical or mental illness, injury, or medical condition; (2) to obtain treatment and/or diagnosis of their own medical condition; (3) other medical reasons such as to obtain a physical examination; and (4) to care or assist certain other persons with an illness, injury, or medical condition.

How is the Paid Sick Leave Ordinance different from California’s "kin care" law? The new Ordinance differs from Labor Code Section 233 ("kin care" leave) in two important ways. First, the Paid Sick Leave Ordinance expands the types of persons for which leave can be taken. California’s "kin care" law allows an employee to use the time to care for children, parents, spouses, domestic partners and children of domestic partners. The City’s Paid Sick Leave Ordinance expands the group to include grandparents, grandchildren, step-relations (i.e. stepchildren, stepparents) relationships resulting from adoption, foster care relationships, and legal guardians or wards. The Ordinance also allows an employee to designate "another" if an employee does not have a spouse or a registered domestic partner. An employer must give employees a window of 10 work days each year to make such a designation.

Second, the San Francisco Ordinance requires employers to permit employees to use all their mandatory paid sick leave to care for these groups. Labor Code Section 233 only requires that employees be able to use one-half of their annual accrual to care for others.

Does an employer that already has a paid time off policy need to provide employees with even more leave? It depends. If an employer already has a paid leave policy in place, and that policy meets the requirements of the new law, the employer does not need to provide additional paid sick leave.

What records must an employer keep? Employers are required to retain records for a period of four years, documenting hours worked and paid sick leave taken by employees. If a dispute arises and the employer failed to maintain adequate records for that time period, absent clear and convincing evidence to the contrary, it shall be presumed that the employer has violated the Ordinance.

Must employers notify employees about this new Ordinance? Yes. Employers must post a notice regarding employees’ rights to take paid sick leave. The notice must be posted in English, Spanish, Chinese and any other language that is spoken by at least 5% of the employees at the workplace. The Ordinance requires the City’s Office of Labor Standards Enforcement to have these postings available by the operative date of the Ordinance, February 5, 2007.

Does the Ordinance create any other rights for employees? Yes. The new law prohibits an employer or any other person to interfere with, restrain or deny the exercise or attempted exercise of the rights protected under the Ordinance. Any adverse action taken against an employee within 90 days of the employee’s exercise of a right under the Ordinance creates a rebuttable presumption of retaliation.

What damages can an employee recover? An aggrieved employee can either bring a civil action or rely on San Francisco’s Labor Standards Enforcement Office to bring an action. If a violation is found, the employer can be forced to reinstate the employee with back pay, pay administrative penalties which may include $50 for each hour of sick leave unlawfully withheld, and/or pay a dollar amount of sick leave withheld multiplied by three or $250, whichever is greater. The employer also could be responsible for attorneys’ fees and costs.

How does the law affect employers with collective bargaining agreements?

The law exempts employers with collective bargaining agreement only if the agreement waives the provisions of the Ordinance in clear and unambiguous terms.

What should employers with San Francisco employees do now? Employers should review their sick leave and paid time off policies to make sure the policies comply with the Ordinance, including providing the required amount of accrued time, allowing employees to "carry over" sick leave, and letting employees use sick leave/paid time off for the purposes the Ordinance requires.

We will keep you informed about any legal challenges to Proposition F. In the meantime, please let us know if you would like our assistance in reviewing and updating your current leave policies and/or in understanding how Proposition F interacts with leave requirements under other laws such as FMLA, CFRA, the ADA, and pregnancy disability leave.