Attention San Francisco Retailers: City by the Bay Becomes First in Nation to Pass Controversial Workers’ Rights Bill

The Bill of Rights is a package of two separate pieces of legislation — the Hours and Retention Protections for Formula Retail Employees, and the Fair Scheduling and Treatment of Formula Retail Employees (the “Ordinance”). The Ordinance will now head to the desk of Mayor Ed Lee, where it is expected to be signed into law. If signed by the mayor, the bill will go into effect 180 days later. The Ordinance dramatically alters the way that covered retailers must schedule and compensate employees in San Francisco.

What Retailers are Covered by the Ordinance?

The Ordinance applies to “chain stores” with 20 or more locations worldwide that employ more than 20 individuals in the city of San Francisco. The Ordinance also covers property services contractors that provide janitorial or security services to these businesses.

What Must Covered Retailers Provide to Employees?

• Initial notification of work schedules and minimum hours: Before a person begins his or her employment, covered employers must provide a description of the employee’s work schedule and an estimate of the minimum hours the employee is expected to work each month. The employee may request modifications to the proposed work schedule, and the employer must consider and respond to the request.
• Advance notice of work schedules: Covered employers will be required to post work schedules at least two weeks in advance in a conspicuous location. The Ordinance states that changes to the posted schedule must be communicated by posting the change and also either in-person or through appropriate forms of electronic communication (e.g., telephone call, email, or text). Employers are required to retain employee work schedules and payroll records for three years.
• Compensation for schedule changes and on-call shifts: If the employer makes changes to the posted schedules, the employee will receive a certain amount of pay in addition to the hours worked, referred to as “predictability pay.” Schedule changes include modifications to the date or time of the scheduled shift and shift cancellations. Employers will also be required to compensate employees who are scheduled to be “on-call” for a particular shift but are not called in to work.

What are the Exceptions?

Employers are not required to provide predictability pay under certain circumstances. These exceptions include natural disasters, public utilities failures, voluntary employee shift-trading, and the unexpected unavailability of another employee when the employer did not receive advance notice.

Does the Ordinance Apply to Part-Time Employees?

Yes, and the Ordinance gives part-time employees, defined as those working fewer than 35 hours per week, additional rights. The Ordinance requires that part-time employees and full-time employees with the same job must be paid the same starting hourly rate. Part-time employees must also have the same access to time off, and the same eligibility for promotions as their full-time equivalents.

What is the Notice Requirement?

In early 2015, San Francisco’s Office of Labor Standards Enforcement (OLSE) will provide a notice to employers in English, Spanish, Chinese, and Tagalog to be posted in a conspicuous location at the workplace to inform employees of their rights under the Ordinance. The Notice must also be translated into any language spoken by more than five percent of the employer’s workforce.

Is There a Private Right of Action?

Earlier versions of the Ordinance contained a private right of action for employees. However, the final version of the Ordinance states that only the City Attorney may bring a civil action against an employer for violating the Ordinance. The City Attorney may recover, on behalf of an employee, the payment of lost wages, “the payment of an additional sum as a civil penalty not to exceed the amount awarded for lost wages, reinstatement of the employment and/or injunctive relief, and reasonable attorneys’ fees and costs.”

Takeaways

Needless to say, the Ordinance is an unprecedented and troubling interference with retailers’ rights to manage their business. Unfortunately, it is possible that other cities and states will adopt similar measures.