Burdensome San Francisco Retail Workers Bill of Rights Takes Effect Next Week
Next week, on July 3, 2015 the ordinances collectively known as the “Retail Workers Bill of Rights” - passed unanimously by the San Francisco Board of Supervisors in November 2014 - will go into effect in the City of San Francisco and the City will begin enforcing its provisions. The ordinances require the covered employers to ensure that they meet five major requirements that are listed below.
Covered San Francisco Employers
The Retail Bill of Rights apply to “Formula Retail Establishments” with at least 20 retail sales establishments worldwide and 20 or more employees in San Francisco. The term “Formula Retail Establishment” means establishments that are in business for the purpose of conducting retail sales or service and maintain at least two of the following features: (1) a standardized array of merchandise, (2) a standardized façade, (3) a standardized décor and color scheme, (4) uniform apparel, (5) standardized signage, and (6) a trademark or servicemark.
Five Major Requirements of the Ordinances
1. Advance Notice of Work Schedules and Changes: Prior to the start of employment, an employer shall provide a new employee with a good faith written estimate of the employee’s expected minimum number of scheduled shifts per month, and the days and hours of those shifts (not including on-call shifts). The employee may request a modification in the proposed schedule, which the employer is required to consider (but not required to accept) and respond to prior to the employee’s start of employment. Post-hire, an employer is required to provide employees with at least two weeks’ notice of their work schedules, by doing one of the following at least every 14 days: (1) posting the work schedule in a readily accessible location in the workplace; or (2) electronically transmitting the work schedule to employees. If the employer thereafter changes an employee’s schedule, the employer must give the employee notice of the change, along with “predictability pay” of one hour of pay at the employee’s regular rate for a change with more than 24 hours’ notice but less than 7 days’ notice. If the employer makes a change with less than 24 hours’ notice, the employer must pay the employee 2 hours of pay a the employee’s regular rate for each changed shift of four hours or less, and 4 hours of pay for each changed shift that is more than four hours. Predictability pay is not required if the change is necessitated by certain acts beyond the employer’s control (electric outage, etc.) or if (a) another employee previously scheduled to work the shift is unable to work due to illness or use of PTO and did not give the employer at least 7 days’ notice of the absence; (b) another employee previously scheduled to work the shift fails to report to work and/or is fired or sent home as a disciplinary action; (c) the change results only from an employer request to an employee to work overtime; or (d) the employee requests and/or causes the change to his or her own schedule.
2. Pay for On-Call Shifts: Employees must be given advance notice of on call shifts under which they are required to be available. For each on-call shift that an employee is required to be available but is not called in to work (with less than 24 hours’ notice that the shift has been cancelled or moved to another date or time), the employee must be paid 2 hours of pay (regular hourly rate) for each on-call shift of 4 hours or less, and 4 hours of pay for each on-call shift of more than 4 hours. The same exceptions to the predictability pay requirements also apply to the on-call pay requirements.
3. Equal Treatment for Part-Time Employees: Employers are required to provide part-time employees (those working fewer than 35 hours per week) with the same starting hourly wage as that provided to full-time employees (those working 35 or more hours per week) holding comparable positions. However, pay differentials are permissible if based on considerations other than the part-time status of the employee. Employers are also required to provide part-time employees with the same access to paid and unpaid time off offered to full-time employees of the same job classification. However, a part-time employee’s eligibility for paid or unpaid time off may be pro-rated based on the number of hours that the employee works. Employers must also provide part-time employees with the same eligibility for promotions as full-time employees of the same job classification, though the employer may condition promotion on the employee’s availability for full-time work and/or on reasons other than the part-time status of the employee. Finally, the new ordinances require that if an employer has a need for additional workers, before hiring new employees or using contractors or a temporary staffing agency to perform work, the employer must first offer the additional work to existing part-time employees if the existing employees are qualified to do the work and the work is the same or similar type of work the employee already performs. The employer is only required to offer the part-time employee the number of hours required to give the employee 35 hours of work per week.
4. Sale of Business: If a covered retail establishment is sold, the successor is required to retain the seller’s non-managerial incumbent employees who have been employed for at least 90 days prior to the sale. The successor employer must retain these incumbent employees for at least 90 days and under the same terms of employment already in place (rate of pay, job classification, and number of work hours). If the successor employer determines that it needs fewer employees than were employed by the prior owner, the successor employer must retain incumbent employees based on seniority and/or the terms of any applicable collective bargaining agreement. During the 90-day retention period, the successor employer may not discharge a retained employee without cause.
5. Notice and Recordkeeping: Covered employers are be required to post a notice of employees’ rights under these new ordinances. The San Francisco Office of Labor Standards Enforcement (“OLSE”) will prepare and publish the required posters for employer use. However, that poster has not been prepared yet, so covered employers should get with their legal counsel to draft and post their own notices. Employers are required to retain certain hiring and personnel records for three years and these records are subject to inspection by the OLSE.
The Office of Labor Standards Enforcement (OLSE), is tasked with enforcing the ‘Bill of Rights,’ and may order compliance, impose administrative fines, and order employers to pay lost wages and penalties to employees in addition to reimbursing the City of San Francisco for enforcement-related costs. The San Francisco City Attorney is also authorized to file civil actions against employers who violate the laws. More information from the OLSE is available here.
We will continue to keep you updated on developments with the SF Retail Workers Bill of Rights. Please note that there was legislative effort in California to adopt this on a statewide basis. However, that bill, AB 357, was placed on the inactive list earlier this month. Thus, legislative efforts to make this a statewide requirement are currently dead. However, do not be surprised if similar legislation is introduced in the future.