“Opportunity to Work” Ordinance Imposes New Burdens on San Jose Employers
On November 8, 2016, San Jose residents passed Measure E, known as the “Opportunity to Work” Ordinance. The Ordinance, which becomes effective on March 13, 2017, requires employers with 36 or more employees to offer additional work hours to existing part-time employees before hiring new employees (whether part-time, temporary, and/or through a staffing agency) or contractors, even when the hiring need is occasioned by the departure of an existing employee. One of the expressed intentions of the Ordinance is to prevent employers from hiring part-time workers in an effort to avoid providing health care and other employment-related benefits. However, the practical effects of this Ordinance will be to reduce employment opportunities for companies and industries that may be seasonal, and reduce flexibility of employers to meet customer demands.
The Ordinance requires employers to offer additional work hours to existing employees who, in the employer’s “good faith and reasonable judgment,” have the skills and experience to perform the work. It also requires employers to use a “transparent and nondiscriminatory process” to distribute the hours of work among existing employees. These terms are not defined in the Ordinance and it is unclear what implementing regulations or guidelines will be offered by the City of San Jose to interpret these terms. The Ordinance also permits the City of San Jose to issue “guidelines” to “encourage” employers to create training opportunities to permit existing employees to perform work for which the employer can be expected to have a need for additional hours of work -- although this particular portion of the Ordinance appears suggestive without any method of enforcement. Significantly, the Ordinance does not require an employer to offer the additional work hours to existing employees if doing so would require the payment of premium or overtime wages to existing employees. The Ordinance does not apply to small businesses with 35 or fewer employees. However, for chains and franchise-owned businesses, all employees of the chain or of all business owned by the franchisor, all employees are counted whether or not they are located in San Jose. There is also a carve-out for collective bargaining agreement scheduling provisions (even though the Ordinance was sponsored by several labor unions). Employers may apply for a “hardship” exemption for up to 12 months (and discretionary 12-month periods thereafter) if the employer can demonstrate that it has undertaken in good faith all reasonable steps to comply, and that full and immediate compliance would be impracticable, impossible or futile. Violation of the Ordinance would subject employers to administrative fines, civil penalties, and exposure to private lawsuits for lost wages, penalties, and attorneys’ fees.
The Ordinance requires employers to keep records of work schedules and other documentation of compliance with the Ordinance (e.g. the offers of additional hours of work to existing employees) before each new hire. Employers are also prohibited from retaliating against any employee for asserting their rights to additional work hours under this Ordinance.
The Ordinance further requires that employers post a notice in the workplace to inform workers of their rights provided by the Ordinance, although the language of the required notice is not yet available. The City’s Office of Equality Assurance will publish a bulletin outlining the required notice, as well as templates for offers of additional work to part-time employees, FAQs, and pamphlets related to the Ordinance.
San Jose’s Opportunity to Work Ordinance is similar to San Francisco’s Ordinance applicable to “formula retail establishments.” An effort to implement a similar state-wide legislation has been introduced in the California Assembly (Assembly Bill 5). We will continue to monitor the San Jose Opportunity to Work Ordinance and keep you updated as to any further developments. The text of the Ordinance can be found here.