San Francisco's Paid Sick Leave Ordinance
Posted by Nancy Berner
What It Is And What Employers Need To Do
On February 5, 2007, San Francisco will become the first city in the country to require that employers offer paid sick leave to their employees. As with so many 'firsts,' this mandate leaves many questions unanswered while companies scramble to understand both what the new law requires, and how they can meet those requirements.
What Does The Paid Sick Leave Ordinance Say?
In brief, the Ordinance requires employers with employees who work in San Francisco, either full-time, part-time or on a temporary basis, to provide them with paid sick time, accrued at a rate of one hour of sick time for every thirty hours worked. Note that a covered employee is one who works in San Francisco, regardless of the location of the employer. For example, a San Diego based company with a branch office in San Francisco will be required to meet the requirements of the Ordinance for its San Francisco-based employees. Accrual begins on February 5 for those employees who began work for their current employer on or before that date. For those hired after February 5, accrual begins 90 days after the start of employment. Accrual is 'capped' at 72 hours for large businesses (those with 10 or more employees) and at 40 hours for small businesses (those with fewer than 10 employees).
Paid sick leave does not expire annually and the cap is absolute rather than annual. So an employee who ends the year with 72 paid sick leave hours begins the next year with the same number, and does not accrue additional hours beyond the 72 already accumulated. Employers are not required to pay employees for unused time. Once the employee has accrued time, the time can be applied to cover illness of either the employee, a family member (broadly defined to include grandparents, grandchildren and domestic partners), or a "designated person" selected by employees who are unmarried and are not part of a registered domestic partnership.
The Ordinance requires employers to post a notice of the Ordinance, and to record the amount of sick time accumulated and used by each employee and retain the records for four years. The required poster is available from the OLSE here. The Ordinance may be enforced by the City of San Francisco, or by a civil lawsuit brought by an aggrieved employee.
Additional detailed information covering the requirements of the Ordinance is available here and here.
What Does The Paid Sick Leave Ordinance Fail To Say?
As currently described by the Office of Labor Standards Enforcement (or "OLSE"), the Ordinance leaves unanswered a number of questions critical to employers. As an initial matter, even the apparently straightforward definition of an employee as a person working within San Francisco does not address concerns relating to employees who are only temporarily located in San Francisco, such as seasonal workers and delivery or repair people. The Ordinance simply states that while an employee is working in San Francisco, that employee is accumulating paid sick leave. Nor does the Ordinance advise employers whose workforce varies above and below the 10 person cutoff used to calculate the amount of sick time accrued. For example, a small retailer may have six employees for most of the year, but might increase to 11 to cover the busy holiday shopping season.
Currently, the OLSE maintains that the Ordinance applies to both non-exempt, hourly employees, and exempt, salaried employees. How employers will track the amount of sick time accrued by exempt employees whose hours are not tracked is not addressed by either the Ordinance or the OLSE. In addition, although the Ordinance allows employers to take "reasonable measures" to document propose use of paid sick time, "reasonable" is left undefined.
What Can Employers Do To Comply With The Paid Sick Leave Ordinance?
First, it is important to remember that it is still early days for the Paid Sick Leave Ordinance, so there are few guidelines and fewer precedents available to guide employers. For example, the OLSE is still drafting and providing sample forms, such as the form needed to identify the Ordinance's "designated person." Employers and those who advise them are left in the unenviable position of taking aim at a moving target.
That having been said, there are ways for employers to protect themselves. As an initial step, a careful review of current paid time off policies is critical to determine if modification of current policies is needed, and if so, what modifications. Although not widely applicable, the requirements of the Ordinance can be explicitly waived by a collective bargaining agreement. Perhaps the best protection lies in providing a sick leave policy that is as generous as the policy provided by the Ordinance. One simple solution would be to provide a Paid Time Off Bank in which employees accumulate time off (at no less than the rate required by the Ordinance) that can be used for any purpose, including medical care of the employee, the employee's family members, and any person the employee needs to take to the doctor during hours when he or she would normally be working. The downside for employers is that time accumulated pursuant to a Paid Time Off policy becomes a vested right of the employee, and upon termination, the employee must be paid for unused time, unlike unused sick time, which is not owed or payable upon termination of employment.
In Conclusion
In addition to the steps listed above, employers must remain vigilant and aware of developments as the Ordinance is implemented as law, particularly given the number of questions that remain in spite of the approaching compliance deadline. Additional information will be posted on this blog as soon as it becomes available.
UPDATE: The OLSE published a sample "Designated Person" form. The document can be downloaded here (a Word document).