Confusing Wage and Sick Time Laws

“I know we have to follow the minimum wage laws and the sick leave laws but it’s very confusing. I network with other business owners and we all seem to do something different. What is the law?”

Your HR Survival Tip

Yes, it’s confusing because there is a state law and 22 California localities have added different local laws. This means you may need different rules for different employees based on where they actually perform their work. It doesn’t help that both state and local laws may also have differences based on the size of your company.

Using a federal contractor with 26 employees and located in San Diego county is a perfect example of this confusion:HR Jungle

  • First, all companies are subject to California’s law: minimum wage is $10.50/hour if you have 26+ employees ($10.00 if you have 25 or less), plus employees can use up to 24 hours of paid sick leave each plan year. A plan year is any 12-month period you designate for this purpose.
  • Next, you determine if your company is located in a locality with its own law. In this case, the company is located in Vista and they have no local laws so everyone working at your facility are only subject to California’s law.
  • Then you check to see if you have any employees who might spend more than 2 hours (in any week in the year) working within the San Diego city limits. Those employees are now subject to San Diego’s local law: minimum wage is $11.50 for all sizes of companies and employees can use up to 40 hours of paid sick leave each plan year.
  • The last step is only needed if you have federal contracts. Federal contractors must provide 56 hours of paid sick leave each plan year.

The only thing the different local paid sick leave laws seem to have in common is the accrual rate of 1 hour of paid sick leave earned for every 30 hours worked. This is a high accrual rate but you must use that rate rather than spreading it over the full plan year. If you are using a PTO plan, it must start accruing from date of hire and needs to accrue at the higher rate so you will be providing over 69 hours it if accrues over the full year.

You can try to separate your employees into different work zones (office vs. field, etc.) but most who have tried eventually gave up due to the administrative nightmare. If you don’t have the ability to keep track of where your employees are working at all times, you’ll be forced to implement the law that provides the best benefit to employees.

The company in this example would need to pay at least $11.50/hour and provide 56 hours of paid sick leave per plan year. It’s confusing when you talk with others because they may be subject to different laws than you. Since sick leave is protected time off and there are harsh consequences for not paying the correct minimum wage, it’s important to know what you must provide to be compliant.


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