Oakland Minimum Wage and Paid Sick Leave Law Effective This Week

Topics: New Laws & Legislation, Wage & Hour Issues

In addition to having to comply with the new statewide paid sick leave law, California employers with employees in Oakland need to ensure that they are complying with a new Oakland minimum wage and paid sick leave measure that took effect March 2, 2015. 

New Minimum Wage Requirement

Effective March 2, 2015, employees working at least two hours in a workweek in the City of Oakland must be paid at least $12.25 for each hour worked in Oakland.  The minimum wage requirement does not apply to employees who are exempt from state minimum wage requirements.

New Paid Sick Leave Obligations

Also effective March 2, 2015, employees working at least two hours per week in the City of Oakland (and who are not exempt from state minimum wage requirements) are entitled to accrue at least one hour of paid sick leave for every 30 hours worked.  Leave accrues only in full hour increments (there is no fractional hour accrual).  An employer may prohibit use (as opposed to accrual) of paid sick leave during the first 90 calendar days of employment.  Employers can cap the amount of paid sick leave an employee accrues at 72 hours.  However, small employers (those for whom fewer than 10 employees normally perform work in a given week, including full-time, part-time, and temporary employees) can cap accrual of paid sick leave at 40 hours.  Paid sick leave accruals carry over from year to year subject to any caps imposed within these limits.  Employers need not pay out unused, accrued sick leave on termination of employment.

Unlike the new statewide paid sick leave law, the Oakland ordinance does not provide for the option of giving employees a lump sum amount (e.g. 3 days or 24 hours) of paid sick leave at the beginning of the year as an alternative to the accrual method.  It also does not allow employers to limit yearly paid sick leave use (apart from the allowable cap on accrual). 

If an employer has a paid time off policy that makes available to employees an amount of paid leave that may be used for the same purposes as the Oakland's paid sick leave law, the employer need not provide additional paid sick leave.

The Oakland ordinance provides that paid sick leave can be used for the employee’s own illness or need for medical treatment or diagnosis, but also to aid or care for a child, parent, legal guardian or ward, sibling, grandparent, grandchild, spouse or registered domestic partner.  If an employee has no spouse or registered domestic partner, the employee may designate one person as for whom the employee may use paid sick leave in lieu of a spouse or domestic partner.  The opportunity to make this designation must be extended to an employee no later than the date the employee has worked 30 hours and paid sick leave begins to accrue.  The employee must be given a window of at least 10 work days to make this designation.  Thereafter, the employee must be given an annual opportunity to make or change this designation.

Employers may not require that an employee search for or find a replacement worker to cover hours during which the employee will be using paid sick leave.  However, an employer may require that an employee give reasonable notice of an absence from work for which paid sick leave will be used.  An employer may only take reasonable measures to verify or document that an employee’s use of paid sick leave is lawful, and shall not require an employee to incur expenses in excess of $5 in order to show his or her eligibility for such leave.

The new Oakland ordinance includes an anti-retaliation provision that prohibits employers from discharging, reducing compensation, or otherwise discriminating against an employee for asserting his or her rights.  The ordinance specifically provides that “within 120 days of an employer being notified of such activity, it shall be unlawful for the employer to discharge any employee who engaged in such activity unless the employer has clear and convincing evidence of just cause for such discharge.”

Employers may not fund increases in compensation required by the new measure by reducing compensation or benefits of non-management employees, nor by increasing charges to them for parking, meals, uniforms or other items.

Employers are required to maintain records of wages and paid sick leave accrual and use for at least 3 years, and are required to provide a copy of these records to an employee upon the employee’s reasonable request.

Employers are required to post a notice informing employees of their rights under the new law and must give current employees and new hires written notification of their rights as well.

The Oakland minimum wage and paid sick leave law provides for a private right of action for violations and authorizes an award of attorneys’ fees to a prevailing plaintiff.

Recommendations

Employers covered by the Oakland's minimum wage and paid sick leave law should take immediate steps to ensure compliance with its requirements, including by ensuring that covered employees are paid at least the Oakland minimum wage for all hours worked in Oakland, by posting the Oakland-specific posters, and by ensuring that the employer has a paid sick leave policy that complies with both the California state paid sick leave law (beginning July 1, 2015) and the Oakland law.  If the employer has employees in San Francisco, the employer needs to ensure that its paid sick leave policy complies with San Francisco's local ordinance as well. While these state and local ordinances are alike in many ways, there are a few key differences.  For example, the Oakland and San Francisco laws do not allow for a lump sum alternative to the accrual method, whereas state law does.  While all three laws allow for caps on accruals, the permissible caps are different.  Under state law, the employer can limit accrual to 48 hours or 6 days, whereas under the Oakland and San Francisco ordinances, the permissible cap is 40 hours for small employers and 72 hours for larger employers.  Employers must also note that a 40-hour cap, while permitted under the Oakland and San Francisco ordinances, would not comply with state law.  Another difference to note is that the Oakland and San Francisco ordinances both allow an employee who does not have a spouse or registered domestic partner to designate another person for whom they may use paid sick leave in lieu of a spouse/domestic partner.  The state law makes no such provision.  The eligibility requirements under the three laws are somewhat different as well with the state paid sick leave law applying to employees working at least 30 days in California in their first year of employment, the Oakland law applying to employees who work at least two hours in a week in Oakland, and the San Francisco law applying to employees who work at least 56 hours in a calendar year in San Francisco.  Finally, the laws contain different provisions on when medical certification can be required to verify paid sick leave use.  The state law is silent on the subject whereas the San Francisco ordinance permits it if leave use is in excess of three consecutive working days (or if there is a pattern of abuse) and the Oakland law permits it if reasonable in the circumstances and the employee does not incur expense of more than $5 to obtain the medical certification.

Because all three laws allow for paid time off policies in lieu of separate paid sick leave policies, employers covered by these overlapping laws may wish to have a one-size fits all paid time off policy (that meets the minimum accrual, cap, and use requirements of these laws) that applies to all California employees.  Employers considering this alternative must bear in mind, however, that accrued, unused paid time off (unlike paid sick leave) must be paid out on termination of employment.  Additionally, employers cannot take adverse action against an employee for using paid sick leave under these laws.  As such, if an employer lumps paid sick leave into a more comprehensive paid time off policy that does not distinguish between paid sick leave accrual, vacation accrual, etc., then any use of paid time off under that policy likely would be protected --  meaning exempt from attendance points policies and similar adverse consequences.