The Passage of Law Requiring San Francisco Employers To Provide Paid Sick Leave For Workers

On November 7, 2006, voters in the City and County of San Francisco passed Proposition F which requires any individual or entity which employs persons working in San Francisco to give one-hour of paid sick leave for every 30 hours worked. As a result, workers in San Francisco have become the first in the nation to be guaranteed paid sick leave.

Effective February 5, 2007, current employees will begin to earn sick leave immediately and employees hired thereafter will begin to earn sick leave after three months on the job. Employees who work in businesses with fewer than 10 employees will accumulate a maximum of 40 hours of paid sick leave. All other employees will accumulate up to 72 hours.

In addition to the standard reasons for an employee taking sick leave - - an employee's own illness making them unable to come to work - - employees will be able to take paid sick days in order to have physical or mental illnesses or injuries diagnosed or treated. They can also take such leave to care for their children, siblings, parents, grandparents, grandchildren, or domestic partners.

Impact of the New Law

San Francisco employers who currently use a paid time off ("PTO") instead of the more traditional vacation and sick leave policy may need to address whether their current policy meets the requirements of the new law. Notably, the law includes a provision that allows PTO policies to meet the requirements of paid leave so long as the required leave amounts are met. Employers are advised to consult with an expert on this matter before making a decision on whether or not existing policies need to be changed.

The new law does not require that accrued and unused sick time be paid out at the time of an employee's separation from the company. Thus, if employers are concerned about being forced to increase the amount of existing PTO provided under such policies, which by their terms mandate accrued and unused time be paid out at the time of separation, employers may be best served by changing their PTO policies to the more traditional vacation and sick leave policy (which, by definition, does not require accrued and unused sick time be paid out at the time of separation).

The penalty to employers for failing to meet the requirements of the new law are significant and include monetary fines, requirements that a terminated employee be reinstated, and attorney's fees and costs to the prevailing employee.

Given the recent passage of the paid sick leave law, which follows the recently-enacted mandatory health care benefits and increased minimum wage laws, San Francisco employers are strongly advised to consult with employment law experts on these matters to insure compliance. Scherer Smith & Kenny LLP remains available to answer these and any other employment law questions that you might have.

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