San Francisco Apartment Association

Feature

San Francisco’s New Paid Sick Leave Requirements

by Marc Jacuzzi

On November 7, 2006, the voters in San Francisco passed Measure F, known as the Sick Leave Ordinance. Subject to certain limitations described below, Measure F requires employers to provide paid sick leave (PSL) to employees who spend working time in San Francisco. The law took effect February 5, 2007. On February 28, 2007, the San Francisco Board of Supervisors approved a revision to the SLO which allows employers to choose not to pay for sick leave used by employees between February 5, 2007, and June 5, 2007, until June 6, 2007; and states that employers will not be liable for penalties for a failure to pay for sick leave during this period.

In this article, I will answer several of the common questions about the SLO. The San Francisco Office of Labor Standards Enforcement also has answers to "frequently asked questions," providing some official guidance regarding the SLO, at www.sfgov.org. Further, the OLSE is answering questions received via email at PSL@sfgov.org.

Q. To which employers does the SLO apply?

A. The SLO applies to all businesses or persons who, either directly or through an agent such as a temporary staffing agency, exercise control over the wages, hours and working conditions of an employee within the geographic borders of San Francisco. The language of the SLO does not appear to restrict its application to employers actually located in San Francisco. Instead, the SLO focuses on and applies to employees "employed within the geographic boundaries" of San Francisco.

Q. Which employees are entitled to accrue and use PSL under the SLO?

A. Employers must give PSL to all their employees (exempt and non-exempt) who spend working time within the boundaries of the City and County of San Francisco. It does not matter if the employees are full-time, part-time or temporary employees. The OLSE has opined that the requirements of this ordinance even apply to employees of businesses located outside of San Francisco when those employees travel into the city in the course and scope of their duties (for example, truck drivers and messengers).

Existing employees working for an employer on or before February 5, 2007, begin to accrue PSL on that date. New employees hired after February 5, 2007, do not begin to accrue PSL until 90 days after the start of their employment.

Q. Are there any exceptions regarding employers subject to the SLO?

A. The SLO provides the minimum requirements pertaining to PSL. If an employer already has a policy that allows employees to take PSL in the manner and amount required by the SLO, the employer does not need to provide additional PSL to its employees.

Additionally, the SLO does not apply to employees covered by a collective bargaining agreement if the collective bargaining agreement expressly waives the terms and application of the SLO.

Q. How much PSL may an employee accrue?

A. Once an employee is entitled to accrue PSL, the non-exempt employee accrues 1 hour of sick leave for every 30 hours worked (straight time and overtime) within the geographic boundaries of San Francisco. Hours worked outside of San Francisco need not be counted.

For employees who are exempt from the overtime provisions under federal and state wage and hour laws, OLSE will calculate PSL accrual based upon a 40-hour work week absent evidence that the exempt employee's regular work week is less than 40 hours. In instances where there is evidence that the exempt employee's regular workweek is less than 40 hours, OLSE will calculate PSL accrual based upon that regular workweek. (Of course, if the exempt employee is generally employed outside of San Francisco and is only working in San Francisco occasionally or sporadically, the actual hours spent within the geographic boundaries of San Francisco are counted.)

Employees accrue PSL only in whole hour increments. The SLO caps the total amount of accrued sick leave based on the size of the employer's business. A San Francisco employee of a company that employs nine or fewer employees may accrue up to 40 hours of PSL. All other employees in San Francisco may accrue up to 72 hours of sick leave. It is unclear for the purposes of the cap whether the size of the employer's business is based on the total number of employees regardless of their location or whether the size is limited to the number of employees within the City and County of San Francisco.

The accrued sick leave must be carried forward into the next calendar year, if not used in the year of accrual. If accrual is at the cap at the end of a year, the total capped accrual carries forward into the next year; but accrual does not begin in the next year until the employee has used sick leave to bring the accrual below the maximum.

The maximum accrual of 40 or 72 hours is not an annual maximum. For example, say an employee works 1,200 hours in the first six months of employment and accrues the maximum 40 hours (working for a small employer). She then uses all 40 hours of accrual in July of that year. As soon as she has used accrued sick leave, her balance is below the accrual maximum and she begins accruing again in that same year.

Q. For what purposes can an employee take paid leave under the SLO?

A. An employee may take PSL to care for her own illness, injury, medical care, treatment or diagnosis. Additionally, an employee may take PSL for the employee's child, parent, legal guardian, ward, brother, sister, grandparent, grandchild, spouse, registered domestic partner, or child of a domestic partner for their illness, injury, medical care, treatment or diagnosis.

If the employee has no spouse or registered domestic partner, the employee can designate one person for whose care the employee may use her accrued PSL. The employer must provide the employee with the opportunity to make that designation no later than 10 days after the date on which the employee accrues her first hour of PSL. Also, the employer must provide the employee with the opportunity to make such a designation, including the opportunity to change a previously made designation, on an annual basis, with a window of 10 workdays for the employee to make the designation. A suggested designation form is available at www.sfgov.org.

The SLO differs from California's so-called "Kin Care" law (California Labor Code Section 233) by mandating that all employers provide PSL. California's Kin Care law does not require an employer to allow PSL, but instead only applies to employers who elect to provide PSL to their employees. Also, California's Kin Care law requires the employer to allow an employee to use only half of her accrued sick leave to care for specified persons. By contrast, the SLO requires the accrual of PSL and does not limit the amount of PSL that an employee may take to care for specified persons. Under the SLO, an employee may use all accrued PSL to care for specified persons other than the employee. Finally, the SLO contains more categories of persons other than the employee on whose behalf the employee may use PSL.

When an employee uses accrued PSL, the time taken cannot be counted as an absence under an employer's attendance policy or lead to any adverse employment action, such as termination, suspension or demotion.

Q. What else must employers do to comply with the SLO?

A. The SLO requires that employers post a notice informing employees of their rights under the SLO. A copy of the notice suitable for posting can be found on
www.sfgov.org. The notice must be posted in a conspicuous place at any workplace or job site where an employee works. The failure to post the required notice can result in significant penalties.

Additionally, an employer must retain records for four years regarding employee PSL. The records must contain the number of hours worked and the amount of PSL taken by employees. Also, the employer must allow the OLSE to access those records. The failure to maintain and retain or to allow the OLSE to access those records creates a presumption that the employer has violated the SLO.
Finally, an employer may not discriminate or retaliate against an employee who takes PSL or who, in good faith, alleges a violation of the SLO.

Q. Who may enforce the SLO?

A. The SLO designates the OLSE as the agency in charge of enforcement. The SLO also authorizes the OLSE to draft guidelines or rules regarding its implementation and enforcement. The SLO authorizes the OLSE to investigate and hold administrative hearings regarding alleged violations.
In addition to administrative enforcement, the San Francisco City Attorney, individual employees, an entity representing an employee, or anyone acting on behalf of the public as allowed under state law may file a civil action against an employer for violations of the SLO.

Q. Who is potentially liable for violations of the SLO?

A. The SLO makes an employer liable for violations of the SLO. Additionally, the SLO appears to make corporate officers and executives individually liable for such violations.

Q. What are the potential penalties for violations of the SLO?

A. In an administrative enforcement action against an employer, if the OLSE determines that the employer has violated the SLO, the OLSE may order any of the following relief it deems appropriate, including:

  • an injunction to prevent violation of the act;
  • reinstatement for an employee terminated for exercising her rights under the SLO;
  • back pay for an employee unlawfully terminated;
  • payment to the employee of the value of any sick leave unlawfully withheld;
  • pre-judgment interest at the rate of 10% per year;
  • an administrative penalty paid to each employee whose PSL was withheld, in the amount of $250 or three times the value of the sick leave unlawfully withheld, whichever is greater;
  • for other violations of the SLO (such as unlawful termination or retaliation, or the failure to post the required notice) an additional administrative penalty of $50 dollars per employee per day that the violation occurred, paid to the employee; and
  • an administrative penalty paid to the city in the amount of $50 per day for each employee whose rights were violated.

Additionally, the OLSE can request that city agencies or departments revoke or suspend any certificate, permit or license the employer holds or has requested. In a civil action, the employer is subject to all but the last penalty listed above. An employer who is found liable in a civil action may also have to pay the attorneys' fees of the party who filed the civil action.

Q. How might my current policies be modified to comply with the SLO?

A. If your current policy provides the same or greater benefits as those provided in the SLO, you do not have to change any of your policies. Beware, however, when determining that your plan meets the requirements. Many employer plans provide accrual of sick leave on a monthly basis, rather than on an hourly basis, as is required by the SLO. If your existing sick leave policy is insufficient to meet new minimum accrual standards, rather than increasing the amount of sick leave you offer, your company's sick and vacation policy may be converted to a "Personal Time Off" policy. The employee's accrued sick leave and some of the employee's vacation can be moved to PTO so that the employee has up to 72 hours of PTO, plus seven or eight days of vacation per year. Please note that by combining sick leave with vacation, it may convert a benefit that does not have to be cashed out at the separation of employment (PSL) into one that does.

The opinions expressed in this article are those of the author and do not necessarily reflect the viewpoint of SFAA or SF Apartment Magazine. The information within this article is general in nature. Consult an attorney for any specific problem. Marc Jacuzzi is an attorney with employment-law firm Simpson, Garrity & Innes, PC and can be reached at 650-615-4860. Copyright © 2007 by the SF Apartment Magazine. All rights reserved.