San Diego Municipal Code Div. 42 City of San Diego Living Wage Ordinance

The City awards many agreements to businesses that provide services to the public and to the City or that are intended to promote economic development, job creation, and retention. It is the experience of the City that many of these services to the public and to the City are provided by workers who live at or below the poverty line. This Division recognizes that agreements, including service contracts and financial assistance agreements, advance the interests of the City as a whole by creating jobs that keep workers and their families out of poverty. This Division therefore requires covered employers and their subcontractors to pay their employees a wage that will enable a full-time worker to meet basic needs and avoid economic hardship. Paying services employees a living wage is intended to improve the quality of services provided to the City and to the public by reducing high turnover, absenteeism, and instability in the workplace. This Division also promotes the City’s policies and programs that seek to meet the employment and economic development needs of the City and its workforce. Businesses that do not fall into any of the above-described categories are not required to comply with this Division. (Added 6-6-2005 by O-19386 N.S.) (Amended 2-26-2014 by O-20352 N.S.; effective 3-28-2014.) (Amended 1-15-2021 by O-21284 N.S.; effective 6-1-2021.) (Amended 10-8-2025 by O-22004 N.S.; effective 7-1-2026.)

This Division shall be cited as the City of San Diego Living Wage Ordinance. (Added 6-6-2005 by O-19386 N.S.)

Each word or phrase that is defined in this Division appears in the text of this Division in italicized letters. For purposes of this Division, the following definitions shall apply:

Affordable Care Act means the Patient Protection and Affordable Care Act and the
Health Care and Education Reconciliation Act of 2010, and any subsequent federal
legislation and applicable federal regulations.

Business means any corporation, partnership, limited liability corporation, joint
venture, sole proprietorship, association, or trust, other than a public entity.

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City means the City of San Diego, its organizational subdivisions, agencies, offices, or boards, but does not include independent agencies, such as the Housing Authority,

and the Retirement Board, each of which is encouraged to adopt its own living wage policy.

City Manager means the City Manager and his/her delegates and representatives.

Compensated leave means any paid leave for illness, vacation, or personal need provided by a covered employer to a covered employee, but does not include paid holidays that are provided by a covered employer under the covered employer’s established policy.

Covered employee means any individual employed on a full-time, part-time, temporary, or seasonal basis by (a) a service contractor with regard to any hours worked in performance of a service contract; or (b) a financial assistance recipient who works at least 20 hours a month at the site that is the subject of the financial assistance agreement or at least 20 hours a month on the program that is the subject of the financial assistance agreement. Covered employee does not include: (a) individuals who, in addition to wages, receive academic credit for their work from an accredited educational institution; or (b) individuals who participate in job training and education programs that have as their express purpose the provision of basic job skills or education.

Covered employer means any service contractor, financial assistance recipient, or any authorized agent thereof.

Financial assistance agreement means an agreement between the City and a business to provide direct financial assistance with the expressly articulated and identified purpose of encouraging, facilitating, supporting, or enabling: (a) economic development, job creation, or job retention; or (b) tourism, arts, and cultural programs. As to economic development, job creation, or job retention, this Division applies to financial assistance agreements with a combined value over a period of five years of $500,000 or more. As to tourism, arts, and cultural programs, this Division applies to financial assistance agreements with a combined annual value of $750,000 or more. Direct financial assistance includes funds, below-market loans, rebates, deferred payments, forgivable loans, land write-downs, infrastructure or public improvements, or other action of economic value identified in the financial assistance agreement. Financial assistance does not include below-market leases to non-profit organizations or indirect financial assistance, such as that provided through broadly applicable tax reductions or services performed by City staff. Financial assistance agreement includes subcontracts to perform services at the site that is the subject of the financial assistance agreement or for the program that is the subject of the financial assistance agreement.

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Financial assistance recipient means any business that has entered into a financial assistance agreement. For purposes of this Division, financial assistance recipient includes all subcontractors retained by a business to perform services at the site that is the subject of the financial assistance agreement, or for the program that is the subject of the financial assistance agreement.

Health benefits means benefits related to medical, dental, vision, and other health services, and excludes benefits related to retirement, disability, accidental death and dismemberment insurance, and life insurance.

Health benefits rate means a minimum dollar amount per hour toward the cost of health benefits for covered employees and their dependents.

Prime service contractor means any business that enters into a contract for services directly with the City.

Service contract means a contract between the City and a business, and any applicable subcontracts or franchises, to furnish services. For purposes of this Division, service contract includes cost-neutral and revenue-generating contracts. For purposes of this Division, service contract includes all contracts for services provided through the managed competition program under Charter section 117(c).

Service contractor means any business that has been awarded a service contract
subject to this Division. For purposes of this Division, service contractor includes all
subcontractors or franchisees retained by a business to perform any or all of the
functions covered by a service contract.

Services means the following types of employment activities and any other
non-managerial, non-supervisory, or non-professional services that are consistent
with the intent of this Division and designated in a financial assistance agreement or
service contract:

(a) Automotive repair and maintenance;

(b) Cashiers;

(c) Child care;

(d) Concessions/retail sales;

(e) Facility and building maintenance;

(f) On-site food service/preparation;

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(g) Janitorial, custodial, street cleaning and housekeeping;

(h) Landscaping;

(i) Laundry services;

(j) Office/clerical;

(k) Parking services;

(l) Pest control;

(m) Security services;

(n) Ushers and wheelchair attendants;

(o) Ticket takers;

(p) Warehouse workers;

(q) Waste collection and waste disposal, including recycling;

(r) Right-of-way maintenance;

(s) Water and wastewater maintenance; and

(t) Service workers in the medical field, including emergency medical technicians
and paramedics.

Unfair immigration-related practice has the same meaning as in California Labor
Code section 1019(b)(1).

Willful violation means a covered employer’s intentional failure or refusal to perform an act which is required under this Division. Such failure or refusal need not be based on a deliberate malicious purpose or intent to defraud. A covered employer’s failure or refusal to comply with this Division is prima facie evidence of a willful violation if the contract for services states that this Division applies.

(Added 6-6-2005 by O-19386 N.S.) (Amended 11-24-2008 by O-19809 N.S; effective 1-1-2010.) (Amended 2-26-2014 by O-20352 N.S.; effective 3-28-2014.) (Amended 3-2-2016 by O-20607 N.S.; effective 4-1-2016.) (Amended 1-15-2021 by O-21284 N.S.; effective 6-1-2021.) (Amended 10-8-2025 by O-22004 N.S.; effective 7-1-2026.)

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(a) This Division shall apply to:

(1) any service contract, including all cost-neutral or revenue-generating
service contracts and any applicable subcontract, that is entered into,
awarded, amended, renewed, or extended. Compliance with this
Division is required during the term of the service contract.

(2) any financial assistance agreement subject to the $500,000 threshold,
including any applicable subcontract. Compliance with this Division is
required for a period of five years after the threshold amount has been
received by the business.

(3) any financial assistance agreement subject to the $750,000 threshold,
including any applicable subcontract. Compliance is required for one
year after the threshold amount has been received by the business.

(b) For any contract subject to this Division, the prime service contractor must
use its own employees to perform at least fifty percent of the work described
in the contract.

(Added 6-6-2005 by O-19386 N.S.)
(Amended 2-26-2014 by O-20352 N.S.; effective 3-28-2014.)
(Amended 3-2-2016 by O-20607 N.S.; effective 4-1-2016.)
(Amended 1-15-2021 by O-21284 N.S.; effective 6-1-2021.)
(Amended 10-8-2025 by O-22004 N.S.; effective 7-1-2026.)

(a) The following contracts are exempt from the requirements of this Division:

(1) contracts subject to federal or state law or regulations that preclude the
applicability of this Division’s requirements;

(2) contracts that involve programs where the City shares management
authority with other jurisdictions, unless all the signatory jurisdictions
agree to the applicability of this Division’s requirements to the
contract;

(3) contracts for services by any other governmental agency;

(4) contracts for public works construction;

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(5) cooperative procurement contracts, including contracts that use a
bidding process that substantially complies with City requirements;

(6) contracts for the purchase of goods, property, or the leasing of
property;

(7) contracts for professional services, as described in California Labor
Code Section 515(a), such as design, engineering, financial, technical,
legal, banking, medical, management, operating, advertising, or other
services. The exemption for professional medical contracts shall not
extend to service contracts for emergency medical personnel,
including emergency medical technicians and paramedics;

(8) contracts where compliance with this division is not in the best
interests of the City as certified by the City Manager and approved by
the City Council.

(b) The following businesses, even if otherwise qualified as a covered employer,
are exempt from the requirements of this Division:

(1) Businesses, including their parent and subsidiary entities, employing
twelve or fewer employees for each working day in each of twenty or
more calendar weeks in the current or preceding calendar year, so long
as the City determines that the business, including any of its
subcontractors, will not need to retain more than twelve employees to
perform work related to a service contract or financial assistance
agreement.

(2) Businesses organized under Internal Revenue Service Code, section
501(c)(3) to provide community-based social services, other than child
care services, and whose highest paid officer earns a salary that, when
calculated on an hourly basis, is less than eight times the hourly wage
rate of the lowest paid covered employee.

(c) The definitions of service contract or financial assistance agreement shall be
liberally interpreted so as to further the policy objectives of this Division.
(Added 6-6-2005 by O-19386 N.S.)
(Amended 11-24-2008 by O-19809 N.S; effective 1-1-2010.)
(Amended 2-26-2014 by O-20352 N.S.; effective 3-28-2014.)
(Amended 3-2-2016 by O-20607 N.S.; effective 4-1-2016.)
(Amended 10-8-2025 by O-22004 N.S.; effective 7-1-2026.)

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(a) Covered employers subject to this Division must pay covered employees the hourly wage rate and health benefits rate posted on the City’s web site for that fiscal year.

(b) The hourly wage rates will be upwardly adjusted each July 1 to reflect the
change in the Consumer Price Index for All Urban Consumers for the San
Diego – Carlsbad – San Marcos Metropolitan Statistical Area for the twelve-
month period preceding December 31. The health benefits rate will be
consistent with the Affordable Care Act and any other applicable federal and
state law provisions. Prior to April 1 of each year, the City will calculate the
new rates and provide notice to all covered employers by posting on the City’s
web site the rates in effect for the next fiscal year.

(c) Covered employers must provide to each covered employee a minimum of
eighty hours per year of compensated leave. Compensated leave must vest as
accrued, in accordance with applicable state law and covered employer
policies. Part-time employees must accrue compensated leave at a rate
proportional to full-time employees. A covered employee, working under a
service contract to provide services for the City of one day or less, must be
paid additional wages in an amount equal to the proportional rate of
compensated leave, in lieu of receipt of compensated leave.

(d) Covered employees must be eligible to use accrued days off after the first six
months of employment or consistent with employer policy, whichever is
earlier.

(e) Covered employers must also permit covered employees to take a minimum of
eighty hours of uncompensated leave per year to be used for the illness of the
covered employee or a member of his or her immediate family, when the
covered employee has exhausted all accrued compensated leave.

(f) This section does not mandate the accrual from year to year of uncompensated
leave.

(g) The City will provide covered employers with credit toward the total amount
of compensated leave required under this Division for the paid sick leave they
must provide under the California Healthy Workplaces, Healthy Families Act
of 2014.

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(h) Covered employers must pay covered employees the state prevailing wage rate as specified in section 22.3019 if the prevailing wage rate is higher than the wage rate specified in this Division. For purposes of this section, “wage rate” means the sum of required hourly wages, health benefits, and compensated leave. (Added 6-6-2005 by O-19386 N.S.) (Amended 2-26-2014 by O-20352 N.S.; effective 3-28-2014.) (Amended 3-2-2016 by O-20607 N.S.; effective 4-1-2016.)

(a) Every service contract and financial assistance agreement must require that the party contracting with the City be subject to the terms of this Division and all regulations and rules promulgated under this Division and that all applicable subcontractors, sublessees, and concessionaires comply with the terms of this Division and all regulations and rules promulgated under this Division.

(b) Each covered employer must notify covered employees at the time of hire and
must annually distribute a notice with the first paycheck to occur after July 1
to its covered employees of the requirements of this Division, the possible
availability of health insurance coverage under the Affordable Care Act, and
the possible availability of the Earned Income Tax Credit.

(c) Each covered employer must file a living wage certification with the City
Manager within thirty days of becoming a covered employer. Covered
employers must ensure that all applicable subcontractors, sublessees, and
concessionaires file a living wage certification within thirty days of becoming
covered by the requirements of this Division. The living wage certification
must be completed on a form provided by the City Manager.

(d) Each covered employer must file with the City Manager an annual report
documenting compliance with this Division. The covered employer must
maintain records documenting compliance for at least three years, but is not
required to maintain records for more than seven years, after the City’s final
payment on the service contract or financial assistance agreement. Such
records must be made available to the City upon request. The records to be
maintained must include all wage records, proof of payment for health
benefits, covered employee name, address, date of hire, job classification, rate
of pay, cost and amount paid for health benefits, hours worked in each pay
period, and paid and unpaid time off (accrued and used).

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(e) Each covered employer must post a notice informing covered employees of their rights under this Division, and any applicable exemptions from the hourly wage rate requirements of this Division. The poster must be at the site of work, or a site frequently accessed by covered employees, in a prominent and accessible place where it can easily be seen by covered employees. Each covered employer must update this notice annually and within thirty days of receiving notice from the City of the amended hourly wage rates under this Division. (Added 6-6-2005 by O-19386 N.S.) (Amended 11-24-2008 by O-19809 N.S; effective 1-1-2010.) (Amended 2-26-2014 by O-20352 N.S.; effective 3-28-2014.) (Amended 3-2-2016 by O-20607 N.S.; effective 4-1-2016.) (Amended 10-8-2025 by O-22004 N.S.; effective 7-1-2026.)

(a) A covered employee claiming a violation of this Division may file an action against a covered employer in a court of competent jurisdiction within three years after discovery of the alleged violation.

(b) The court may award the following monetary damages to a covered employee
who proves a violation of this Division:

(1) For failure to pay the required hourly wage on applicable service
contracts or financial assistance agreements, the difference between
the hourly wage required by this Division and the amount actually
paid to the covered employee, plus interest, and penalties for willful
violations.

(2) For failure to pay the health benefits rate on applicable service
contracts or financial assistance agreements, the difference between
the health benefits rate required by this Division and the amount
actually paid towards the health benefits rate for the covered
employee, plus interest, and penalties for willful violations.

(3) For retaliation for exercise of any rights provided for under this
Division, reinstatement, back pay, or any other relief that a court may
deem appropriate.

(4) For a willful violation of this Division, a penalty of up to three times
the amount of damages awarded pursuant to section 22.4230(b)(1)
and/or (b)(2).

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(5) Reasonable attorneys’ fees and costs to a covered employee who
prevails in any such private action.

(c) The court may award reasonable attorneys’ fees to a covered employer who
prevails if the covered employee’s suit is found to be frivolous.

(d) A covered employer shall not:

(1) Retaliate against a covered employee who alleges non-compliance
with this Division or cooperates with an investigation regarding
compliance with this Division. Retaliation includes but is not limited
to unfair immigration-related practices, or any other discriminatory
practice that violates federal or state law; or

(2) Discharge, reduce in compensation, or otherwise discriminate against
any covered employee for complaining with regard to the covered
employer’s practices with respect to this Division, for opposing any
practice proscribed by this Division, for participating in proceedings
related to this Division, for seeking to enforce his or her rights under
this Division by any lawful means, or for otherwise asserting rights
under this Division.

(e) A covered employee claiming a violation of the Division may file a complaint
with the City. The City shall investigate and address any alleged violation of
this Division’s requirements, and shall convey the results of the investigation
to the complainant within sixty days, with reasonable thirty-day extensions.
However, the City's failure to investigate an alleged violation or otherwise
enforce any of the provisions of this Division does not create any right of
action to recover damages from the City by any person, including but not
limited to an aggrieved covered employee.

(f) Whether based upon a complaint or otherwise, where the City Manager has
determined that a covered employer has violated this Division, the City
Manager shall issue a written notice to the covered employer that the violation
is to be corrected within thirty days. If the covered employer does not
demonstrate to the City Manager within such period that it has substantially
cured any material violation, the City Manager shall take one or more of the
following enforcement actions:

(1) Declare a material breach of the service contract or financial
assistance agreement and exercise the City’s contractual remedies,
which are to include, but not be limited to, suspension or termination
of the service contract or financial assistance agreement and the
return of monies paid by the City for services not yet rendered.

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(2) Institute proceedings under Chapter 2, Article 2, Division 8 to debar the covered employer from future City contracts for three years or until all penalties or restitution have been fully paid, whichever occurs last.

(3) Request a determination of non-responsibility under Chapter 2,
Article 2, Division 30.

(4) Request that the City Attorney bring a civil action against the covered
employer seeking any legal remedies, including but not limited to:

(A) Where applicable, payment to the covered employee of all
unpaid wages or health benefits prescribed by this Division,
plus interest;

(B) A fine payable to the City in the amount of up to one hundred
dollars ($100) per covered employee for each violation for each
day the violation remains uncured; and

(C) The City’s administrative costs.

(5) Refer violations of this Division to appropriate local, state, and/or
federal agencies and authorities.

(g) If a covered employer is determined by the City Manager to have violated this
Division two or more times in a two-year period, the City Manager shall take
enforcement action pursuant to section 22.4230(f), even if the covered
employer has substantially cured any material violations.

(h) A violation of this Division is not subject to prosecution as a misdemeanor or
infraction, notwithstanding any other provision of this Code.

(i) This Division is not to be construed to limit a covered employee’s right to
bring legal action for a violation of any other laws concerning wages, hours,
or other standards or rights ,nor is exhaustion of remedies under this Division
a prerequisite to the assertion of any other such right.
(“Enforcement” added 6-6-2005 by O-19386 N.S.)
(Amended 11-24-08 by O-19809 N.S; effective 12-24-2008.)
(Retitled to “Enforcement and Remedies” and amended 2-26-2014 by O-20352 N.S.;
effective 3-28-2014.)
(Amended 10-8-2025 by O-22004 N.S.; effective 7-1-2026.)

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(a) The City Manager shall develop and implement administrative policies, rules, and regulations to carry out the intent of this Division, including procedures for handling complaints by covered employees. The City Manager shall monitor compliance, including conducting periodic reviews of appropriate records maintained by covered employers to verify compliance and to investigate claimed violations. To secure compliance with this Division, the City Manager is authorized to take any appropriate enforcement action pursuant to Chapter 1, Article 2, Division 1 of this Code.

(b) The City Manager is authorized to create a citizens advisory committee for
the purpose of making recommendations regarding how the policies and
purposes of this Division may be advanced.

(c) On July 1 of each year, or as soon thereafter as is practicable, the City
Manager shall submit an annual report to the City Council generally
describing the effects of the City of San Diego Living Wage Ordinance upon
the City.
(Added 6-6-2005 by O-19386 N.S.)
(Amended 11-24-2008 by O-19809 N.S; effective 1-1-2010.)
(Amended 2-26-2014 by O-20352 N.S.; effective 3-28-2014.)

The provisions of this Division shall not be superseded by any collective bargaining agreement unless the supersession is specifically agreed to in writing by the parties to the collective bargaining agreement. (Added 6-6-2005 by O-19386 N.S.) (Amended 2-26-2014 by O-20352 N.S.; effective 3-28-2014.)

All provisions in this Division are intended to be consistent with all applicable federal and state laws. If any provision of this Division is declared legally invalid by a final judgment rendered in a court of competent jurisdiction, the provision declared invalid shall be deemed to be severable to the extent that the remaining provisions of this Division can be enforced in a manner that substantially carries out the objectives of this Division. (Added 6-6-2005 by O-19386 N.S.) (Amended 2-26-2014 by O-20352 N.S.; effective 3-28-2014.)

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Article 2: Administrative Code