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June 7, 2016 — California Primary Election
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— Referendum of Ordinance Relating to Earned Sick Leave and Minimum Wage to be Provided to Employees Working in the City of San DiegoOrdinance —

Local

City of San Diego
Proposition I Ordinance - Majority Approval Required

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Election Results

Passing

193,300 votes yes (63.84%)

109,500 votes no (36.16%)

Shall Ordinance O-20390 be approved, establishing that employers are to compensate employees working in the City of San Diego with earned sick leave of up to forty hours a year and a minimum wage of $10.50 an hour upon the Ordinance's effective date, $11.50 an hour on January 1, 2017, and increasing with the cost of living on January 1, 2019 and annually thereafter?

Summary

This measure asks voters to approve the City of San Diego Earned Sick Leave and Minimum Wage Ordinance, No. O-20390, which was approved by the San Diego City Council on August 18, 2014. The Ordinance is on the ballot as a result of a referendum petition that qualified the measure for the ballot, and a City Council vote to place the Ordinance on the ballot.

The Ordinance establishes that specified employers are to compensate employees working in the City of San Diego with earned sick leave of up to forty hours a year and a minimum wage of $10.50 an hour upon the Ordinance's effective date, $11.50 an hour on January 1, 2017, and increasing with the cost of living on January 1, 2019 and annually thereafter.

— San Diego County Registrar of Voters
Impartial analysis / Proposal

The City of San Diego Earned Sick Leave and Minimum Wage Ordinance (the Ordinance) applies to specified employers and employees in the geographic boundaries of the City. If approved, the Ordinance would require employers to compensate employees with paid leave for certain purposes and a local minimum wage. 

The City Council approved the Ordinance on August 18, 2014. A referendum petition qualified the measure for the ballot, and the Council voted to place it on the ballot.

The Ordinance defines “employers” as any person or persons, including associations, organizations, partnerships, business trusts, limited liability companies, or corporations, who exercise control over the wages, hours, or working conditions of any employee, engage an employee, or permit an employee to work. Employers do not include aged, blind, or disabled people who receive in-home supportive services care, under state law. 

The Ordinance defines “employee” as any person who, in one or more calendar weeks of the year, performs at least two hours of work within the geographic boundaries of the City for an employer, and who qualifies for the payment of minimum wage under the State of California minimum wage law. Employees do not include independent contractors as defined by the California Labor Code, or people who have been issued a special license by the state to be employed at less than minimum wage, certain youth employees in publicly subsidized summer or short-term employment programs, and certain counselors at organized, outdoor camps. 

If approved, employees would be paid a minimum wage of $10.50 an hour upon the Ordinance’s effective date, following voter approval. Starting January 1, 2017, the minimum wage would be $11.50 an hour. Starting January 1, 2019, the minimum wage would increase by an amount corresponding to the prior year’s increase, if any, in the cost of living, as defined by the Consumer Price Index. 

Employees would receive one hour of paid, earned sick leave for every thirty hours worked, at the same hourly rate or other measure of compensation that the employee earns. Earned sick leave would begin to accrue when employment starts. There would be a 90-day waiting period before an employee could use the leave. Employers may limit use of the leave to forty hours in a twelve-month period, but accrual cannot be capped and unused leave must be carried over. Upon an employee’s separation, employers would not have to pay unused leave, but must maintain it for six months if the employee returns. 

Leave could be used if an employee is physically or mentally unable to work due to illness, injury, or a medical condition; for “Safe Time” (time away from work necessary to handle certain matters related to domestic violence, sexual assault, or stalking, when the employee or a specified family member is a victim); for medical appointments; and to care for or assist certain family members with an illness, injury, or medical condition. 

Employers would post notices, maintain records, and be subject to civil penalties for violations. The City would establish an enforcement office.

— San Diego City Attorney
Financial effect

The following analysis is limited to an estimate of the amount of any increase or decrease in costs or revenues to the City of San Diego’s government finances (City).

If this measure is adopted, there will be additional administrative & enforcement, wage, and sick leave costs for the City. These additional costs are shown in the table below. The higher cost estimate for fiscal year 2018 reflects the minimum wage increase to $11.50 on January 1, 2017. 

[TABLE--Unable to present tabular format; data described linearly below]

Estimated Costs to the City:

Administration & Enforcement: $400,000 in FY 2017 and $400,000 in FY 2018

City Employee Wages & Sick Leave: $150,000 in FY 2017 and $200,000 in FY 2018

Estimated Total Costs: $500,000 in FY 2017 and $600,000 in FY 2018

[END OF TABLE]

As the City’s minimum wage program is developed and implemented, there may be increases in the above estimated annual costs for program administration and enforcement. Additionally, there may be other unknown wage expenses related to the use of earned sick leave or to maintain a fair pay-scale hierarchy for certain City employees.

Beginning January 1, 2019, the minimum wage will annually increase by the percentage growth in the prior year’s Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI). While the effect of this annual increase on the City’s wage costs is difficult to accurately forecast, based on current CPI and wage projections, the City’s wage costs in fiscal year 2019 and beyond are likely to remain similar to the costs estimated for fiscal year 2018.

Tax revenue implications for the City are difficult to accurately forecast. There may be positive and negative tax revenue impacts to the City that will be at least partially offsetting. For example, this measure will increase wage costs for some employers. While increased wage costs for employers can, in some instances, be offset by other operational factors (reduction of other business costs or profits, reduced employee turnover, increased employee productivity, higher prices, etc.), it is also possible that higher employer wage costs could cause some businesses to reduce employees or employee hours, which in turn could reduce sales and sales tax revenue to the City. Alternatively, employees who benefit from minimum wage increases will spend some of these new wages on taxable goods purchased in the City, thereby increasing sales tax revenue to the City. 

— San Diego County Registrar of Voters

YES vote means

A “Yes” vote is a vote in favor of adopting the Ordinance, which would amend the San Diego Municipal Code. If a majority of voters vote “Yes,” then the Ordinance will take effect.

NO vote means

A “No” vote is a vote against adopting the Ordinance. If a majority of voters vote “No,” then the Ordinance will not take effect. 

Arguments FOR

People who work full-time should not live in poverty.

Proposition I will help 170,000+ hardworking San Diegans pay rent, put food on the table, and support their families. Living in San Diego is expensive. Even working full-time, nearly 1 in 4 families cannot make ends meet:

  • A minimum wage job pays $20,800/year. The median San Diego rent is $16,152/year.

  • Proposition I will increase hardworking, low-wage worker wages an average of $1,400/year. Many are veterans. Over half are women.

Earned sick leave will allow parents to stay home with a sick child and not miss a day’s pay. It will prevent kitchen staff and food servers from being forced to work when they are sick.

Proposition I will make a huge difference for thousands.

“Veterans too often struggle to return to civilian life. Many work for minimum wage and live at poverty levels, rather than enjoying the honored place in our society they deserve. Proposition I will enable thousands of veterans to earn a decent wage.”

-Nathan Fletcher, USMC Veteran, Former Assemblymember

“I make $10/hour and can’t make ends meet. I do additional work just to buy food. I’ve lived in my car and worry where I will sleep every night. Proposition I will help people like me a great deal.”

-Marcus Nichols, Security Officer

Proposition I is reasonable and balanced. It raises the minimum wage to $10.50/hour now and to $11.50/hour on January 1, 2017.

Economist Alan Gin supports Proposition I:

“Proposition I will be good for San Diego. Studies show it will inject $260 million into the local economy. When low-wage earners get a raise, they spend virtually every dollar close to home, often at local small businesses.”

Join small business owners, leaders of San Diego’s high-tech industry and hardworking families.

Vote YES on Proposition I.
www.raisethewagesd.com 

TODD GLORIA, City Councilmember, Former Interim Mayor

IRWIN JACOBS, Founding Chairman and CEO Emeritus, QUALCOMM

JON CANTWELL, Small Business Owner, Index Urban Travel Shop

ADA LOERA, Janitor

JACK HARKINS, Chair, United Veterans Council of San Diego

— City of San Diego

Arguments AGAINST

Vote NO on Proposition I. Governor Brown strongly opposes additional statewide increases which will cost billions.

San Diego’s big unions are at it again. Their gold plated pensions nearly bankrupted San Diego. Now they want a 43.75% wage increase over levels established two years ago.

FACT: California has raised wages 25% in the past two years.

We should see how a 25% hike impacts our fragile economy before imposing additional massive increases.

Governor Brown is opposed to further state increases. He says those increases will cost California taxpayers billions of dollars.

FACT: 43.75% increase will seriously harm small businesses and our local economy.

We believe a massive “city only” hike will seriously harm small businesses – especially home healthcare, small charitable non-profits, and small start-ups already struggling to make it.

Why would businesses pay thousands or millions in higher costs when they can move just outside city limits and avoid them?

A city-only ordinance puts our city at a huge disadvantage.

FACT: Mandates Additional ANNUAL Wage Hikes

Proposition I also requires additional ANNUAL wage hikes virtually EVERY YEAR – FOREVER.

WHY should EVERYONE get a raise EVERY year – whether they earned it or not? Only big government unions would sponsor such an anti-business proposal.

FACT: Big Union Schemes Nearly Bankrupted Us

These same big government unions were behind the gold-plated pensions and big government salaries that nearly bankrupted our city.

We’re still digging out from that disaster. Our roads, parks, libraries, public safety, and homeless services have all suffered.

Big unions fooled us once. Now they want a 43.75% wage increase AND annual increases – forever – when the state just raised wages 25%!

Proposition I will harm our city, small local businesses, and charitable organizations, and our local economy. Don’t be fooled. Vote NO on Proposition I.

Jerry Sanders, San Diego Regional Chamber of Commerce

Sheri Harvey, Homecare Provider

Ann Kinner, Small Business Coalition

— City of San Diego
Yes on Proposition I
No on Proposition I
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