San Francisco Retail Workers Bill of Rights Undergoes Significant Amendments
Two new San Francisco ordinances, collectively known as the “Retail Workers Bill of Rights,” went into effect on July 3, 2015. Four days later, the San Francisco Board of Supervisors adopted important amendments that went into effect on August 14, 2015. The amended ordinances made a few significant changes: (1) narrowed employer coverage; (2) allowed collective bargaining waivers; (3) required predictability pay for modifications of on-call shifts; (4) delay enforcement; and (5) amended the notice and acceptance parameters for additional shift scheduling. Qualifying San Francisco retail employers should review their policies and practices to ensure compliance with the newly amended ordinances.
Covered San Francisco Employers
The Retail Bill of Rights apply to “Formula Retail Establishments” (as well as their janitorial and security service contractors) which are those employers with at least 40 retail sales establishments worldwide and 20 or more employees in San Francisco. The August amendments raised the threshold number of establishments from 20 to 40 locations worldwide. The term “Formula Retail Establishment” refers to those 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.
Collective Bargaining Waivers
Unions that represent employees of formula retail establishments or property service contractors may waive the protections of the ordinances as part of a bona fide collective bargaining agreement. Any such waiver must be express, clear and unambiguous.
Five Major Requirements of the Ordinances
Covered San Francisco employers should carefully review the Ordinances with qualified and knowledgeable legal counsel to make sure that they are complying with all the requirements of the Ordinances. Below is a summary of the five key provisions of the Ordinances:
1. Advance Notice of Work Schedules and Changes: Prior to the start of employment, employers must provide a new employee with a good faith written estimate of the employee’s expected minimum number of shifts per month, as well as the days and hours of those shifts. Post amendment, this rule now applies to on-call shifts in addition to all other scheduled shifts. The employee may request a modification in the proposed schedule, which the employer is required to consider and respond to (but not required to accept) prior to the employee’s start of employment.
Post-hire, employers must 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 an employer thereafter changes an employee’s schedule (including on-call shifts), the employer must give the employee notice of the change along with “predictability pay.” The employer must provide one hour of pay at the employee’s regular rate for a schedule 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 is unable to work due to illness or use of PTO and did not give the employer at least 7 days’ notice; (b) another employee previously scheduled to work 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, the employee must be paid 2 hours of pay (regular hourly rate) for each shift of 4 hours or less, and 4 hours of pay for each shift of more than 4 hours. The same exceptions to the predictability pay requirements also apply to the on-call pay requirements.
Under the original language, this rule would not apply when an employer provides 24 hours' or more notice that the on-call shift has been cancelled or moved to another date or time. This provision, however, has been removed from the amended ordinances.
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 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 employee’s part-time status. Employers are also required to provide part-time employees with the same access to paid and unpaid time off available to full-time employees in 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 in 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 they 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 enough hours to give the employee 35 hours per week.
The amendments add new notice and acceptance rules for the scheduling of these additional hours. Employers must now notify existing part-time employees of additional available hours either in writing or by posting a notice in a conspicuous workplace location where employee notices are customarily posted. The employer must retain all written offers for three years. Employers are also encouraged to post electronic notice on their internal websites in a conspicuous location.
Employees must then be provided 72 hours to accept available additional hours. The 72-hour period begins when the employee receives the written offer or when the employer posts the offer of additional hours, whichever is later. An employee who wishes to accept the additional hours must timely do so in writing. After 72 hours, the employer may hire new employees or use contractors or a temporary services or staffing agency to work the additional hours.
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”) has published the required posters for employer use, which can be found here.
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. Under the delayed enforcement provisions of the amended Ordinances, the OLSE did not begin full enforcement until last month. More information from the OLSE is available here.
In addition, it is unclear, yet, whether the State Labor Commissioner/DLSE will have authority to start enforcing this law under California AB 970 (new bill that gives the state authority to enforce local ordinances related to minimum wage and overtime). If the DLSE tries to enforce this ordinance, it is likely that litigation will ensue challenging the right to enforce on the grounds that this ordinance is not a minimum wage or overtime ordinance.
We will continue to keep you updated on developments with the SF Retail Workers Bill of Rights. Although there was a legislative effort in California to adopt these rules on a statewide basis (AB 357), such efforts are currently dead. However, do not be surprised if similar legislation is introduced in the future.