Rejecting a call to place a proposed minimum wage hike on the November ballot as a referendum item, on July 14 the San Diego City Council approved an ordinance raising the city’s minimum wage to $11.50 per hour by 2017.

The wage increase will be phased in over a three-year period. In January 2015, the minimum wage will increase to $9.75; in January 2016 it will increase to $10.50; and in January 2017 it will increase to $11.50. Thereafter, the minimum wage will increase on an annual basis as determined by a Consumer Price Index.

This increase edges ahead of California’s state minimum wage, which rose to $9.00 this month, and is slated to increase to $10.00 in January 2016.

The ordinance applies to all private sector employers, but the minimum wage is owed only to employees who work at least two or more hours per calendar week within city limits.

Business owners claim that the increase will put them at a competitive disadvantage vis-à-vis businesses outside of the city limits. Labor advocates, however, claim that low-wage earners cannot afford to live in San Diego.

The ordinance also requires employers to grant up to five days of paid sick leave per year beginning in 2015. The sick pay provisions are numerous and technical, but employers can expect to see the following changes:

• Sick pay will accrue at the rate of 1 hour per 30 hours worked within city limits.
• The maximum accrual will be 40 hours per year.
• Accruals of up to 40 hours can carry over into the next year.
• Sick leave can be taken in a minimum of two-hour increments.
• Sick leave can be used for the employee’s own illness, medical appointments, caring for family members, and taking time off due to domestic violence and related incidents. Generally, medical documentation excusing the absence will be permitted for absences exceeding three days.

Employers will be required to post workplace notices of the new ordinance. Businesses that violate the ordinance will be subject to civil litigation by aggrieved employees or an enforcement action by the city. Fines may be imposed in the amount of $1,000 per violation.

Businesses that employ workers within city limits should plan to update their policies before the end of this year.