• 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 ordinance establishes minimum requirements pertaining to SDSL. You may provide more generous leave than the ordinance requires.

You can find more information regarding the ordinance at the city's Minimum Wage Program Web page. You can also contact the city of San Diego's Minimum Wage program by phone at (619) 615-1565, or by email at SDMinimumwage@sandiego.gov.

Employers Covered Under the Ordinance

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

"Employer" is defined by the ordinance as "any person or persons, as defined in California Labor Code section 18, who exercises control over the wages, hours or working conditions of any employee, or suffers or permits the employee to work."2

If you already have a paid leave policy that makes the same amount of paid leave available and that can be used for the same purposes as SDSL, you are not required to provide additional paid sick leave. You may use an alternative methodology for the calculation of, payment of and use of SDSL only if your paid leave policy provides greater leave than the ordinance requires.

A paid leave policy provides “greater leave” if it meets the minimum accrual, compensation and use requirements of the ordinance and also:

1. Accrues at a faster rate;
2. Is compensated at a higher rate; or
3. Is allowed to be used for more purposes than those specified in the ordinance.3

Employees Entitled to the Benefit

A covered employee (employee) under the ordinance is any employee who works for at least two hours in one calendar week in San Diego and who is entitled to minimum wage under California state law.4 Part-time, full-time and temporary employees are covered. Exempt employees under California law, such as executive, administrative and professional employees and outside salespeople, are not entitled to minimum wage under California state law, and the city has agreed that these employees are not covered by the ordinance.5 However, exempt employees are still covered by the state law.

Certain workers are exempt from the ordinance. Although the following employees are not covered by SDSL, they are still covered under state law. You are not required to provide SDSL to:

• Any person employed at less than a minimum wage under a special license;
• Any person employed under a publicly subsidized summer or short-term youth employment program; or
• Any student employee, camp counselor, or program counselor of an "organized camp."6

Calculating Leave — Employer Options

The ordinance offers you two different options to provide SDSL.7 The following are the two basic approaches, which are further described below:

• Accrual of SDSL at a specific rate (the accrual method); or
• Provide a lump sum of SDSL at the beginning of each benefit year (the lump-sum method).

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

The ordinance does not change your obligation to comply with a contract, collective bargaining agreement, employment benefit plan or other agreement that provides more generous sick leave to employees than required by the ordinance.

Accrual Method

Under the accrual method, an employee working in San Diego accrues one hour of SDSL for every 30 hours worked in the city, subject to any accrual cap.8 For more information, see "Cap on Accrual" on this page.9

These important conditions apply to the accrual method:

• Employees begin to accrue SDSL on their first day of employment.
• You can require accrual in one hour increments; you are not required to provide accrual in fractions of an hour.
• Employees accrue SDSL on all hours worked in San Diego, including overtime hours. To comply with both the ordinance and the state law, employees must accrue sick leave on every hour worked, regardless of location.
• Any unused SDSL must carry over to the following year of employment. However, you may cap the employee’s total accrued SDSL. For more information, see "Cap on Accrual" on this page.

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

Lump-Sum Method

The lump-sum method allows you to avoid the accrual and carryover provisions by having a policy that provides sick leave in a “lump sum.” You grant the full amount of SDSL at the time of hire and annually thereafter at the beginning of each benefit year (e.g., a regular and consecutive 12-month period, which you may determine). You can choose a more generous lump sum if desired, but it cannot be less than 40 hours.10 The following specific requirements must be satisfied:

• You must provide SDSL at the beginning of each benefit year. For example, if you provided 40 hours on July 1, 2023, you must provide another 40 hours on July 1, 2024.
• The employee must receive a minimum of 40 hours.
• You must make the entire lump sum available to the employee at one time.
• With the lump-sum method, an employee will be able to use the lump sum as soon as it is available (i.e., no later than the 90th day of employment). The employee does not have to wait until they have earned it.

• The state law requires employers who use the lump-sum method to provide at least 40 hours or five days of paid sick leave, whichever is greater. If you have employees who work more than eight hours per workday, their lump-sum amount may need to be higher to ensure that it is no less than the equivalent of five of the employees’ workdays.

You can choose a more generous lump-sum if desired.

Cap on Accrual

Unused, accrued SDSL carries over from year to year. Unless you want to allow an employee to accrue unlimited SDSL, you should consider placing a cap on the maximum amount on SDSL that can be accrued. Any cap on accrual should be in writing and communicated to employees.

You may choose a more generous cap if desired, but it cannot be less than 80 hours.11 After an employee has reached this maximum amount, no additional SDSL will accrue until some or all of the employee’s SDSL is used.

The accrual cap under the ordinance is more generous than the state law.

• The state law requires employers to allow employees to accrue up to 80 hours or 10 days of paid sick leave, whichever is greater. If you have employees who work more than eight hours per workday, their maximum accrual amount may need to be higher to ensure that it is no less than the equivalent of 10 of the employees’ workdays.

You can choose a more generous cap if desired.

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

Permissible Usage

Employees must be allowed to use SDSL for any of the following reasons:12

• The employee is physically or mentally unable to perform their duties due to illness, injury or a medical condition;
• For the purpose of obtaining professional diagnosis or treatment of an employee’s own medical condition, or for other medical reasons;
• To provide care or assistance to a covered family member, as defined below, with an illness, injury, or medical condition, including assistance in obtaining professional diagnosis or treatment of a medical condition;
• For certain, specified purposes when an employee or a covered family member is a victim of crime or abuse. For more information, see Crime or Abuse Victims’ Leave;
• An employee’s place of business is closed by order of a public official due to a public health emergency; or
• An employee is providing care or assistance to a child, whose school or child care provider is closed by order of a public official due to a public health emergency.

The ordinance allows employees to use SDSL for some purposes not covered by the state law, such as for certain closures due to a public health emergency. 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 SDSL for all the purposes identified by both laws. For more information about the purposes for which an individual may use sick leave under the state law, see Permissible Usage.

For purposes of SDSL, a covered “family member” includes:13

• 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, half- and step-relationships;
• A grandparent;
• A grandchild;
• A spouse; or
• A registered domestic partner.

The state law allows employees to use paid sick leave to care for a “designated person,” which is more broadly defined than the SDSL and can be any person identified by the employee at the time the employee requests sick leave. The ordinance allows employees to use SDSL for some “family members” not covered by the state law, such as a step-sibling. 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 can use the full amount of accrued SDSL for a covered family member.

Parameters of San Diego Sick Leave Use

There are important points regarding how employees may use SDSL:

• An employee may begin using SDSL on the 90th day of employment.14
• The ordinance allows you to limit an employee’s use of SDSL to 40 hours per year.15 This limitation applies even if the employee has accrued more than 40 hours of SDSL. You can choose a more generous limitation if desired, but it cannot be less than 40 hours.
• The state law allows employers to limit the number of hours of sick leave an employee can use each year to 40 hours or five days, whichever is greater. If you have employees who work more than eight hours per workday, their limit on use is no less than the equivalent of five of the employees’ work days. You must provide employees the most generous benefit.
• You may require employees to provide “reasonable advance notice” of the need to use SDSL, not to exceed seven days or “as soon as practicable” if the need for leave is unforeseeable.16 However, the state law overrides the SDSL on employee notice to the extent it is contrary. Under state law, employers may require employees to provide “reasonable advanced notice” if the paid sick leave is planned. The city released guidance addressing the changes to the state law and how they may impact the ordinance. The guidance suggests that employers may only require advance notice up to seven days in advance. The state law does not put such a limit on reasonable advance notice and this guidance may be contrary to state law. Consult with legal counsel about your SDSL policy to ensure it does not violate either the state law or the ordinance.
• An employee may determine when and how much SDSL they need to use. You can require an employee take SDSL in a minimum increment of no more than two hours.17 However, to comply with state law, you should allow employees to take SDSL in an initial minimum increment of two hours 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 SDSL.18
• You may require an employee to provide reasonable documentation to substantiate the need for leave after an employee has used more than three consecutive days of sick leave.19 However, you cannot require medical documentation under the state law. To comply with both laws, you should not request medical documentation.

Paying Employees for San Diego Sick Leave

SDSL provides the following method to calculate how to compensate employees for SDSL.20 Calculate SDSL for nonexempt employees in the same manner as you calculate the regular rate of pay for the workweek in which the employee uses SDSL.

• Effective January 1, 2024, the state law overrides this provision of the ordinance. Employers must compensate SDSL utilizing one of the following methods:

1. Use the employee’s “regular rate of pay” for the workweek in which the leave was taken; or
2. Use the 90-day lookback method (which requires 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). For exempt employees, you pay sick leave the same way wages are calculated for other forms of paid leave time. For more information, see Paying the Employee for the Sick Day.
3. You must calculate paid sick time for exempt employees in the same manner as wages are calculated for other forms of paid leave.

For information on how to calculate the "regular rate of pay," see "Regular Rate of Pay Defined" in Calculating Overtime.

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

Employee Separation and Reinstatement

Unlike accrued, unused vacation or paid time off (PTO) – which is treated like wages – SDSL does not need to be paid out to the employee upon separation of employment (i.e., there is no requirement to "cash out" SDSL at termination, resignation, retirement or other separation from employment).21

However, previously accrued, unused SDSL that was not paid out at separation must be reinstated if an employee is rehired within six months. Upon rehire, the employee must be allowed to use the reinstated SDSL and begin accruing additional SDSL.22

The state law requires you to reinstate previously accrued, unused sick leave that was not paid out at separation if an employee is rehired within one year. To comply with both laws, you must comply with the state law.

Posting, Notice and Recordkeeping Requirements

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

Posting and Notice

The ordinance requires you to post an official, city-provided notice, describing employee rights. The city will publish this notice in English, Spanish and all other languages in which the city’s ballot materials are provided. You must display the city-provided notice in all languages spoken by at least five percent of the employees at each of your business locations.

You are not responsible for displaying the city-provided notice in languages not provided by the city. The notices must be posted in a conspicuous place at all locations where employees work.23

The current San Diego Earned Sick Leave Official Notice, in all applicable languages, is in CalChamber's San Diego City Labor Law poster.

• San Diego City Labor Law 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

You must provide employees, at the time of hire, written notice of your company’s legal and fictitious names, address, telephone number and "employer’s requirements" pursuant to the ordinance.24 The notice must include information on how the employer satisfies the requirements of the ordinance, including the employer's method of SDSL accrual.25 The notice must be in English and in the employee’s primary language, if the city provides a translated San Diego Paid Sick Leave Official Notice in that language.26

The current San Diego Employer to Employee Notification Form, in all applicable languages, can be found at the city's Minimum Wage Program Web page.

The state law also 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 and meets the obligation under the ordinance.27 More information about the notice can be found in the HR Library's New Employee Orientation page.

Payday Notice

Unlike the state law, the ordinance does not have a payday notice requirement. To comply with both laws, you must provide an employee with an itemized wage statement or other written document that notifies the employee of the amount of accrued SDSL available each pay period.

Recordkeeping

You also are required to retain payroll records pertaining to employees for a period of three years. The Enforcement Official working on behalf of the city must be allowed to access these records.28

If you do not keep adequate records documenting wages paid and SDSL accrued and used by employees, or you do not allow the Enforcement Official reasonable access to payroll records, the employee’s estimate of hours worked, SDSL that should have been accrued, and SDSL used will be presumed to be accurate. You will have to offer evidence to rebut this presumption.

Enforcement

The ordinance is enforced by an Enforcement Official on behalf of the Office of the City Treasurer.29 The Enforcement Official may conduct investigations and take administrative action to enforce the ordinance.

If the Enforcement Official determines that an employer has violated the ordinance, the Enforcement Official may assess a fine of between $500 and $1,000, payable to the city, for each day an employer fails to provide an employee with SDSL. The Enforcement Official may assess a fine of $500, with a maximum fine of $2,000, for each employee who was not given the required notice, and a fine of up to $3,000 may be assessed if the Enforcement Official determines the employer retaliated against an employee.30 For more information, see “Retaliation” on this page. An employer who has not previously violated the ordinance cannot be fined any more than $10,000 for all violations of the ordinance. The Enforcement Official will increase the fine by 50 percent for each subsequent violation within three years.31 An employer has the right to an administrative hearing to contest the Enforcement Official’s determinations.32

In addition, aggrieved employees or the city may file a civil lawsuit for any violation of the ordinance.33

Remedies for violations of the ordinance may include back pay, damages for the employer’s denial of use of SDSL, reinstatement, attorney’s fees and costs, an additional amount of doubling the back wages withheld (called “liquidated damages” in the ordinance). Where an employer has retaliated against an employee, the “liquidated damages” are the greater of double back wages and $1000, or $3000 in the case of retaliation involving termination.34 For more information, see "Retaliation" on this page.

Retaliation

The ordinance protects employees against retaliation for exercising any rights under the ordinance.35 For example, employees have the right to use SDSL, file formal complaints and inform other employees of their rights.

If an employer takes adverse action against an employee within 90 days after the employee asserted rights protected by the ordinance, it will be presumed this action was unlawful retaliation. The employer will have to offer evidence to rebut this presumption. 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 Diego Mun. Code sec. 39.0104

3. Earned Sick Leave and Minimum Wage Ordinance Frequently Asked Questions (March 2018)

4. San Diego Mun. Code sec. 39.0104

5. San Diego Mun. Code sec. 39.0104; Earned Sick Leave and Minimum Wage Ordinance Frequently Asked Questions (March 2018)

6. San Diego Mun. Code sec. 39.0104

7. San Diego Mun. Code sec. 39.0105

8. San Diego Mun. Code sec. 39.0105(b)

9. San Diego Mun. Code sec. 39.0105(e)

10. San Diego Mun. Code sec. 39.0105(c)

11. Earned Sick Leave and Minimum Wage Ordinance Frequently Asked Questions (March 2018)

12. San Diego Mun. Code sec. 39.0106

13. San Diego Mun. Code sec. 39.0104

14. San Diego Mun. Code sec. 39.0105(d)

15. San Diego Mun. Code sec. 39.0105(i)

16. San Diego Mun. Code sec. 39.0106(b)

17. San Diego Mun. Code sec. 39.0105(h)

18. San Diego Mun. Code sec. 39.0106(d)

19. San Diego Mun. Code sec. 39.0106(c)

20. San Diego Mun. Code sec. 39.0105(e)

21. San Diego Mun. Code sec. 39.0105(k)

22. San Diego Mun. Code sec. 39.0105(j)

23. San Diego Mun. Code sec. 39.0108(a), (b)

24. San Diego Mun. Code sec. 39.0108(c)

25. San Diego Mun. Code sec. 39.0108(a)(3)

26. San Diego Mun. Code sec. 39.0108(c)

27. Lab. Code sec. 2810.5

28. San Diego Mun. Code sec. 39.0109

29. San Diego Mun. Code secs. 39.0104, 39.0113

30. San Diego Mun. Code sec. 39.0112(c)

31. San Diego Mun. Code sec. 39.0112(c)

32. San Diego Mun. Code sec. 39.0113

33. San Diego Mun. Code sec. 39.0112(a)

34. San Diego Mun. Code sec. 39.0112(b)

35. San Diego Mun. Code sec. 39.0111