Berkeley Approves Updates to Minimum Wage and Implements New Sick Leave Requirement

In late August, 2016, the Berkeley City Council approved a new sick leave ordinance that will take effect October 1, 2017.  The City Council also approved scheduled increases to the City minimum wage.  Until now, it was unclear whether the minimum wage and sick leave rules the City Council implemented would be altered by competing measures on the City ballot.  On Tuesday, November 8, 2016, voters in Berkeley voted against both measures, meaning the ordinance will proceed as set forth by the City Council.  The details of the ordinance are outlined below.

Berkeley’s current minimum wage is $12.53 per hour and is scheduled to increase as follows:

October 1, 2017 $13.75
October 1, 2018 $15.00
October 1, 2019 Increase according to Consumer Price Index

Below is a summary of key points of the Sick Leave Ordinance:

  • Employees shall accrue one hour of sick leave for every 30 hours worked.
  • Small businesses will be permitted to cap sick leave accrual at 48 hours per year.  The Ordinance defines small businesses are as employers with fewer than 25 persons working for compensation during a given week.  All other businesses will be permitted to cap sick leave accrual at 72 hours per year.
  • Small businesses may limit employees’ use of sick leave to 48 hours in year.  All other businesses may not limit employees’ use of sick leave.  (Effectively, employees of larger employers may use the sick leave as it is accrued and continue to do so throughout the year, which results in a “rolling” cap, rather than a hard cap on accrual).
  • The Ordinance does not address frontloading. However the Ordinance allows employers to lend paid sick days to employee in advance of accrual.
  • Employers must allow for carryover of sick leave from year-to-year, up to the applicable caps.
  • The Ordinance defines employee as a person who performs at least two (2) hours of work for an employer within the geographic boundaries of the City in a calendar week.
  • Employers with paid leave policies, such as a paid time off policy, vacation, or other paid leave policy that make available to employees an amount of paid leave that may be used for the same purposes as paid sick leave under the Ordinance and that is sufficient to meet the requirements for accrued paid sick leave, are not required to provide additional paid sick leave.
  • Sick leave must be paid at the employee’s hourly wage.  However, for employees paid commission, piece-rate, different hourly rates, or as a salaried non-exempt employee, in the 90 days of employment before taking sick leave, the rate of pay shall be calculated by 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. (Note that the Ordinance does not parallel State law on this aspect).
  • Employees may use sick leave for family members as under State law, plus if an employee has no spouse or registered domestic partner, the employee may designate another person as to whom the employee may use paid sick leave.
  • Employers will be required to post a notice published each year by the City regarding sick leave.
  • Employers will be required to provide a copy of the paid sick leave public notice to new hires and to employees assigned to complete work within the City.
  • Employers will be required to retain records of employee sick leave for four years.
  • Employers will also be required to report the number of hours of paid sick leave accrued to date on the employees’ itemized wage statements, or “in such records that they provide to employees at the end of each pay period.”
  • The sick leave requirements may be waived in a bona fide collective bargaining agreement, provided that such waiver is explicitly set forth in such agreement in clear and unambiguous terms.
  • The good news is that employers have plenty of time to modify their policies if needed in advance of the October 1, 2017 effective date for the sick leave requirements.  If you have any questions regarding implementation of sick leave policies for Berkeley or other California locations, please contact the author or your usual employment counsel.

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