California law provides for mandatory paid sick leave under the Healthy Workplaces, Healthy Families Act (the state law). You are required to comply with both the PSLO and state law.

• Effective January 1, 2024, the state law overrides the following provisions in any local paid sick leave ordinance that is contrary to the state law:

• No requirement to pay out unused sick leave balances upon termination;
• Reinstatement of unused balances for employees rehired within a year;
• Employers' ability to choose to advance paid sick leave prior to accrual;
• The requirement to set forth available balances on an employee's wage statement or other writing accompanying the employee's paycheck;
• The rate of pay at which paid sick leave must be paid;
• Requirements for notice for foreseeable and unforeseeable usage of paid sick leave;
• Timing of payment of paid sick leave when used.1

Otherwise, when the two laws differ, you must follow whichever is more generous to employees.

The PSLO establishes minimum requirements pertaining to SFSL. You may provide more generous leave than the ordinance requires.

You can find more information regarding the PSLO from the Office of Labor Standards Enforcement's (OLSE) PSLO page. You can also contact the San Francisco OLSE by phone at (415) 554-6271, or email psl@sfgov.org.

Employers Covered Under the Paid Sick Leave Ordinance

The PSLO applies to all employers, regardless of size. The PSLO applies to public and private employers, and for-profit and not-for-profit companies.

“Employer” is defined by the PSLO as: “any person, as defined in Section 18 of the California Labor Code, including corporate officers or executives, who directly or indirectly or through an agent or any other person, including through the services of a temporary services or staffing agency or similar entity, employs or exercises control over the wages, hours or working conditions of an employee.”2

Additionally, a controlled group of corporations (as defined by federal tax law) is considered a single employer and employees of unincorporated businesses are counted as working for one employer if the businesses satisfy the federal tax definition of a “controlled group of corporations.”3

Also, when an employee is jointly employed and at least one employer is covered by the PSLO, then each employer has an obligation to ensure compliance with the PSLO.4 For more information on joint employment, see “Joint-Employer Liability” in the HR Library's Non-Direct Hires page.

If you already have a paid leave policy that makes an amount of paid leave available to employees that can be used for the same purposes as SFSL and meets the accrual requirements of the PSLO, you are not required to provide additional paid sick leave.

Employees Entitled to the Benefit

A covered employee under the PSLO is any employee working within the geographic boundaries of San Francisco.5 Exempt and nonexempt employees are covered, as are part-time, full-time and temporary employees. However, employees who work in San Francisco for less than 56 hours in one calendar year are not covered under the PSLO.6

Out-of-state employees may not be eligible for sick leave under the state law if they do not work in California for at least 30 days within a year from the date of hire. But, if they work 56 hours or more in San Francisco within a calendar year, they are entitled to SFSL.7

The PSLO does not apply to employees covered by a valid collective bargaining agreement if the PSLO requirements are expressly waived in clear and unambiguous terms.8

• The state law has different rules regarding employees covered by a collective bargaining including a requirement that employees will need to be afforded certain rights under the state law. For more information on how to treat employees with collective bargaining agreements under the state law, see the HR Library's Employees Entitled to the Benefit page.

Calculating Leave - Employer Options

The PSLO offers you two different options to provide SFSL. The following are the two basic approaches, which are further described below:

• Accrual of SFSL at a specific rate (the accrual method); or
• Accrual of SFSL at a specific rate, with an advanced amount of SFSL provided at the beginning of each year or 12-month period (the “upfront allocation” method).9

The PSLO does not include an option for you to provide all the required sick leave to employees in an annual lump sum without providing additional sick leave throughout the year.

You may use different methods for different classifications of employees. For instance, you may use the accrual method for part-time employees and the upfront allocation method for full-time employees, or vice versa.

Regardless of whether you employ the accrual method or the upfront allocation method, these important conditions apply to accrual:

• New employees begin to accrue SFSL immediately and may begin using it no later than their 90th day of employment.
• SFSL accrues in hour-unit increments.
• Employees accrue SFSL on all hours worked in San Francisco, including overtime hours. To comply with both laws, employees must accrue sick leave on every hour worked anywhere in California, regardless of location.
• Any unused SFSL must carry over to the following year of employment. However, you may cap the employee's total accrued SFSL. For more information, see “Cap on Accrual” on this page.10

• The state law does not expressly prohibit fractional hour accrual in the manner SFSL does. In order to provide the most beneficial provisions of the state law and SFSL employers using the one hour for every 30 hours worked accrual method should allow for fractional accrual.

Accrual Method

Under the accrual method, an employee working in San Francisco accrues one hour of SFSL for every 30 hours worked, subject to any accrual cap.11 For more information, see “Cap on Accrual” on this page.

Although the state law permits alternate accrual methods, the only accrual option under SFSL is one hour for every 30 hours worked.

Exempt employees accrue SFSL based on a 40-hour workweek, unless their regular workweek is less than 40 hours. In such instances, SFSL will be based on their regular workweek.12

Upfront Allocation Method

The PLSO was amended effective January 1, 2017, to include what is called the upfront allocation method, which, in practice, allows you to “advance” SFSL to employees at the time of hire, and annually thereafter at the beginning of each year of employment, calendar year or 12-month period. This essentially allows an employer to give SFSL before they actually accrue it under the accrual method. Once the employee has worked enough hours to accrue the advanced SFSL at the rate of one hour for every 30 hours worked, the employee will continue accruing SFSL at the same accrual rate subject to any cap on accrual. For more information, see “Cap on Accrual” below.13

Unlike the accrual method, with the upfront allocation method, an employee will be able to use the advanced SFSL as soon as it is available (i.e., no later than the 90th calendar day of employment).14 The employee does not have to wait until they have earned it. There is no minimum requirement for the amount of SFSL you advance.

If you wish to use the upfront allocation method, you must state in a policy or other written document.

Employers wishing to use the upfront allocation method should consult with legal counsel to ensure that their sick leave policy complies with both the PLSO and the state law.

Cap on Accrual

Unless you want to allow an employee to accrue unlimited SFSL, you should consider placing a cap on the maximum amount of SFSL that can be accrued. Any cap on accrual should be in writing and communicated to employees.

The PLSO states that there shall be a cap on accrued SFSL as follows:

• Small businesses (businesses with fewer than 10 employees, in any location): 40 hours
• Businesses with 10 or more employees: 72 hours15

• Effective January 1, 2024, the state law requires employers to allow employees to accrue up to 80 hours or 10 days of paid sick leave, whichever is greater. Because the state law imposes a more beneficial accrual cap for employees, employers may not utilize either PLSO cap.

You may choose a more generous cap if desired.

The accrual cap is a “floating” cap, not an annual cap. Whenever an employee's accrued SFSL drops below the accrual cap due to usage, the employee begins to accrue SFSL again at the rate of one hour for every 30 hours worked.

Permissible Usage

Employees must be allowed to use SFSL for any of the following reasons:

• When an employee is ill or injured, or for the purpose of receiving medical care (including preventive care), treatment or diagnosis, or other medical reason;
• To aid or care for a covered family member, as described below, who is ill or injured or receiving medical care (including preventive care), treatment or diagnosis, or other medical reason;
• For certain, specified purposes when an employee or a covered family member is a victim of crime or abuse (see the HR Library's Crime or Abuse Victims' Leave page for more information); or
• For purposes related to bone marrow donation or organ donation by the employee or an employee's family member.16

The PSLO allows employees to use SFSL for some purposes not covered by the state law, such as for purposes related to organ donation. Conversely, the state law allows employees to use sick leave for reasons not covered in the ordinance, such as jury duty or witness leave. To comply with both laws, you must allow employees to use their SFSL for all the purposes identified by both laws. For more information about the purposes for which an individual may use sick leave under state law, see the HR Library's Permissible Usage page.

For purposes of SFSL, a covered “family member” includes:

• A child, defined as a biological, foster or adopted child; a stepchild; or a legal ward, regardless of the age or dependency status of the child. “Child” also includes a child of a domestic partner or a child to whom the employee acts as a parent, even if the child is not the employee's legal child;
• A parent, defined as a biological, foster or adoptive parent; a stepparent; or a legal guardian. “Parent” also includes a person who is a biological, foster or adoptive parent, stepparent or legal guardian of the employee's spouse or registered domestic partner; or a person who acted as the employee's parent when the employee was a minor, even if the person is not the employee's legal parent;
• A sibling, including biological, adoptive, foster and step-relationships;
• A grandparent, including biological, adoptive, foster and step-relationships;
• A grandchild, including biological, adoptive, foster and step-relationships;
• A spouse;
• A registered domestic partner; or
• A designated person the employee names in advance on a form provided for this purpose, if the employee does not have a spouse or registered domestic partner.
• Within 30 hours after SFSL begins to accrue, employees must be given a window of 10 work days to make the designation. Employees must be provided an annual opportunity to change the designation, with a window of 10 work days to do so.17

The state law allows employees to use paid sick leave to care for a “designated person,” which is more broadly defined than the SFSL and can be any person identified by the employee at the time the employee requests sick leave. To comply with both laws in a single policy, you must allow employees to use their sick leave for the family members identified by both laws.

For more information about a designated person under the state law, see Permissible Usage.

An employee may use the full amount of accrued SFSL for a covered family member.

Parameters of San Francisco Sick Leave Use

There are important points regarding how employees may use SFSL:

• Unlike the state law, which allows you to limit an employee's use of accrued sick leave to 40 hours or five days per year, the PSLO does not allow you to limit an employee's use of SFSL to anything less than the amount of SFSL the employee has accrued.18
• SFSL must be provided upon an employee's oral or written request. You may require employees to give “reasonable notification” of an absence from work for which SFSL is or will be used.19 The state law requires that you allow an employee to provide notice “as soon as is practicable” when leave is unforseeable, such as in emergencies.
• An employee may determine when and how much SFSL they need to use. You cannot require employees to take SFSL in increments of more than one hour.20 However, to comply with state law, you should allow employees to take SFSL in an initial minimum increment of one hour on each occasion, and then as determined necessary by the employee (for example, an additional 15 minutes).
• You cannot require an employee to find a replacement worker to cover the hours during which the employee will be using SFSL.21
• Under the PSLO, you may take “reasonable measures” to verify or document that an employee's use of SFSL is lawful.22 However, you cannot require medical documentation under the state law. To comply with both laws, you should not request medical documentation. Additionally, under the PSLO, a measure is not reasonable if you require the employee to disclose more information than is necessary for you to determine the lawfulness of the employee's use of SFSL. All information obtained from employees regarding their use of SFSL must be treated in a manner consistent with applicable federal, state, and local privacy laws.23

Paying Employees for a San Francisco Sick Leave

You may use any of the following methods to calculate how to compensate employees for SFSL:

• Calculate SFSL for nonexempt employees in the same manner as you calculate the “regular rate of pay” for the workweek in which the employee uses SFSL, regardless of whether the employee actually works overtime in that workweek. “Regular rate of pay” is calculated according to state law;24
• Calculate SFSL for nonexempt employees by “dividing the employee's total wages, not including overtime premium pay, by the employee's total hours worked in the full pay periods of the prior 90 days of employment;” or
• Calculate SFSL for exempt employees in the same manner as wages are calculated for other forms of paid leave time.

An employee's nonexempt or exempt status is determined according to the Fair Labor Standards Act (FLSA) and state law.25 See the HR Library's Determining Exempt of Nonexempt Employee Status page for more information.

SFSL may not be paid at less than minimum wage in any circumstance.

For information on how to calculate the regular rate of pay, see “Regular Rate of Pay Defined” on the HR Library's Calculating Overtime page. No matter which method you choose, you must pay employees for SFSL no later than the payday for the next regular payroll period after the SFSL was taken.26

The state law requires you to pay employees for SFSL no later than the payday for the next regular payroll period after the SFSL was taken.

Employee Separation and Reinstatement

Unlike accrued, unused vacation or paid time off (PTO) — which is treated like wages — SFSL does not need to be paid out to the employee upon separation of employment (i.e., there is no requirement to “cash-out” SFSL at termination, resignation, retirement or other separation from employment).27

However, previously accrued, unused SFSL that was not paid out at separation must be reinstated if an employee is rehired within one year. Upon rehire, the employee must be allowed to use the reinstated SFSL and begin accruing additional SFSL, subject to accrual and use caps described above.28

The PSLO also provides that if an employee separated before the 90th day of employment and is rehired within one year from the date of separation, all prior days of employment are counted toward the 90-day waiting period requirement.29 However, the state law overrides this provision to the extent that it is contrary to the state law. The state law does not require any special treatment for rehired employees who separated before the 90th day of employment previously, and employers are not required to apply any prior days of employment towards a 90-day waiting period requirement.

Posting, Notice and Recordkeeping Requirements

The PSLO contains posting, notice and recordkeeping requirements. You will need to pay close attention to these obligations.

Posting and Notice

The SFSL requires you to post a notice, developed by the OLSE, to inform employees of their rights. The notice must be posted in a conspicuous place at any workplace or job site. You must post this notice in English, Spanish, Chinese and any language spoken by at least five percent of the employees at the workplace or job site.30

The current San Francisco Paid Sick Leave Official Notice, in all applicable languages, is part of CalChamber's San Francisco Labor Laws Poster.

• San Francisco Labor Laws Poster

The state law also requires you to display a Healthy Workplaces/Healthy Families Act of 2014 Paid Sick Leave notice, which is part of CalChamber's California and Federal Labor Law Posters.

• California and Federal Labor Law Posters

You must display both notices.

New Employees

State law requires you to provide the Wage and Employment Notice to Employees (Labor Code section 2810.5) at the time of hire to all nonexempt employees, and this notice contains information on sick leave. More information about the notice can be found at New Employee Orientation.

Payday Notice

Each pay period, you must also provide an employee with an itemized wage statement or other written document accompanying the employee's wages that notifies the employee of the amount of accrued SFSL available.31 State law requires you to provide the Wage and Employment Notice to Employees (Labor Code section 2810.5) at the time of hire to all nonexempt employees that includes this information.32 More information about the notice can be found at New Employee Orientation.

• If you offer unlimited paid time off, you must put “unlimited” on the itemized wage statement or other written document.

Recordkeeping

To comply with the PSLO, you must maintain records documenting hours worked by employees and SFSL taken by employees for a period of four years, which is longer than the three-year minimum requirement under the state law. You must allow OLSE access to the records, with appropriate notice and at a mutually agreeable time, to monitor compliance with the PSLO. If you do not keep adequate records, or you do not allow OLSE reasonable access to the records, it will be presumed that you violated the PSLO.33

You will have to offer evidence to rebut this presumption.

Enforcement

The OLSE enforces the PSLO. The OLSE may conduct investigations, monitor compliance and take administrative or civil action to enforce the PSLO.34

In addition, the OLSE, city attorney, aggrieved employees, entities acting on behalf of a member who is an aggrieved employee, or persons or entities acting on behalf of the public may file a civil lawsuit for any violation of the PSLO.

Remedies for violations of the PSLO may include: reinstatement; back pay; withheld sick leave; and interest on amounts owed. The OLSE provides guidance on how these payments are calculated.35

PLSO violations can also result in payments in the form of penalties, “liquidated damages” or fees and costs. In administrative actions, the OLSE may also issue administrative penalties, including sick leave unlawfully withheld multiplied by three (with a minimum of $250) and $50 to each employee or person whose rights were violated for each day or portion of a day the violation occurred. To compensate the city for enforcement costs, the city may also issue an administrative penalty payable to the city up to $50 for each day, or part of a day, for each person whose rights were violated. The OLSE may take other enforcement actions, such as requesting that city agencies revoke or suspend registration certificates, permits or licenses held or requested by the employer, until the violation is remedied.36

In the case of civil actions, amounts payable to employees or persons whose rights are violated also include liquidated damages in the amount of sick leave unlawfully withheld multiplied by three (with a minimum of $250) and $50 to each employee or person whose rights were violated for each hour or portion of an hour that a violation continued. Attorneys' fees and costs may also be awarded.37

The OLSE's Rules Implementing the San Francisco Paid Sick Leave Ordinance (PSLO) provide details regarding the agency's enforcement procedures and administrative appeals process.38

Retaliation

The PSLO protects employees against retaliation for exercising any rights under the PSLO. For example, employees have the right to use SFSL, file formal complaints and inform other employees of their rights.39

If an employer takes adverse action against an employee within 90 days after the employee asserted rights protected by the PSLO, it will be presumed this action was unlawful retaliation. The employer will have to offer evidence to rebut this presumption.40 The 90-day window is significantly longer than the 30-day window permitted under the state law.

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1. Lab. Code sec. 246(r)

2. San Francisco Labor and Employment Code (L.E.C.) sec. 11.2(d)

3. Rules Implementing the San Francisco Paid Sick Leave Ordinance (PSLO), Rule 9 (May 7, 2018)

4. Rules Implementing the San Francisco PSLO, Rule 10 (May 7, 2018)

5. San Francisco L.E.C. sec. 11.2(c)

6. Rules Implementing the San Francisco PSLO, Rule 6.3 (May 7, 2018)

7. Rules Implementing the San Francisco PSLO, Rule 6.1 (May 7, 2018)

8. San Francisco L.E.C. sec. 11.9

9. San Francisco L.E.C. sec. 11.3(b), (c)

10. San Francisco L.E.C. sec. 11.3

11. San Francisco L.E.C. sec. 11.3(b), (d)

12. Rules Implementing the San Francisco PSLO, Rule 8.2 (May 7, 2018)

13. San Francisco L.E.C. sec. 11.3(c)

14. San Francisco L.E.C. sec. 11.4(d)

15. San Francisco L.E.C. secs. 11.2(f), 11.3(d)

16. San Francisco L.E.C. sec. 11.4(a) - (c)

17. San Francisco L.E.C. sec. 11.4(a)

18. San Francisco L.E.C. sec. 11.4(d)

19. San Francisco L.E.C. sec. 11.4(g)

20. San Francisco L.E.C. sec. 11.4(f)

21. San Francisco L.E.C. sec. 11.4(e)

22. San Francisco L.E.C. sec. 11.4(h)

23. Rules Implementing the San Francisco PSLO, Rule 2.2 (May 7, 2018)

24. San Francisco San Francisco L.E.C. sec. 11.3(h); Rules Implementing the San Francisco PSLO, Rule 5.2 (May 7, 2018)

25. Rules Implementing the San Francisco PSLO, Rule 5.1 (May 7, 2018)

26. San Francisco L.E.C. sec. 11.4(i)

27. San Francisco L.E.C. sec. 11.3(g)

28. San Francisco L.E.C. sec. 11.3(g)

29. Rules Implementing the San Francisco PSLO, Rule 4.1 (May 7, 2018)

30. San Francisco L.E.C. sec. 11.5(a); San Francisco PSLO Frequently Asked Questions, No. 61 (updated December 26, 2023)  31. San Francisco L.E.C. sec. 11.3(f)

32. Lab. Code sec. 2810.5

33. San Francisco L.E.C. sec. 11.6

34. San Francisco L.E.C. sec. 11.8(b), (c); Rules Implementing the San Francisco PSLO, Rule 12 (May 7, 2018)

35. San Francisco L.E.C. sec. 11.8(b), (c); Rules Implementing the San Francisco PSLO, Rule 13 (May 7, 2018)

36. San Francisco L.E.C. sec. 11.8(b); Rules Implementing the San Francisco Paid Sick Leave Ordinance, Rule 13 (May 7, 2018)

37. San Francisco L.E.C. sec. 11.8(c)

38. Rules Implementing the San Francisco PSLO, Rule 14 (May 7, 2018)

39. San Francisco L.E.C. sec. 11.7

40. San Francisco L.E.C. sec. 11.7