Hunton Employment & Labor Perspectives

The San Francisco Board of Supervisors recently enacted two ordinances – which are being called the “Retail Workers Bill of Rights” – that provide extensive new protections to employees of “formula retail establishments” in San Francisco.  The new ordinances regulate how covered employers manage their workers’ schedules and impose additional financial and administrative burdens on those employers.

The new ordinances apply to “formula retail establishments” – a term borrowed from the city’s planning code – which are defined as having two or more of the following features: a standardized array of merchandise; a standardized façade; a standardized décor and color scheme; uniform apparel; standardized signage; and/or a trademark or service mark.  Only those “formula retail” employers that have 20 or more employees in San Francisco and 20 or more establishments worldwide are subject to the new ordinances.

Key provisions of the new ordinances include:

• Initial, Good Faith Estimate of Expected Minimum Hours: Covered employers are required to provide new employees with a non-binding, written, good faith estimate of the employee’s minimum expected number of shifts per month and the days and hours of those shifts.
• Two Weeks’ Notice of Schedule:  Covered employers are required to provide employees with at least two weeks’ advance notice of their work schedules.
• Notice of Schedule Changes and Predictability Pay: Covered employers are also required to provide notice of any schedule changes to their employees.  If an employer adds a shift to or moves or cancels a shift on an employee’s schedule with less than 7 days’ notice, the employer must also provide specified amount of “predictability pay” to the employee, at the employee’s regular rate of pay, in addition to the employee’s regular pay for hours actually worked.Predictability pay is not, however, required when the schedule changes are due to circumstances outside the employers’ control, such as natural disasters, public utility outages, or another employee’s failure to report to work, among other things.
• On-Call Pay: Employers that require employees to be available for “on call” shifts, but give less than 24 hours’ notice of whether the employees must report to work, must also provide on-call pay when an employee is required to be available, but is not called in to work.  Employers must provide two hours of pay for on-call shifts of four hours or less and four hours of pay for on-call shifts of more than four hours.
• Offer Additional Work to Part-Time Employees First: Covered employers must offer qualified, part-time employees additional work before hiring new employees or using contractors or temporary employees to perform the additional work.  Offers must be made in writing.  Under this provision, employers are only obligated to offer the number of hours required to give an employee 35 hours of work per week.
• Equal Treatment of Part-Time Workers: The new law also mandates equal treatment of part-time workers in terms of starting hourly rates of pay, access to time off, and eligibility for promotions, subject to certain limitations.

These new provisions become operative in July 2015 and will be enforced by the San Francisco Office of Labor Standards Enforcement, which can collect lost wages, impose administrative fines, and seek reimbursement of the  City’s enforcement costs.  The ordinances can also be enforced via civil suit by the City attorney.

The new ordinances also require covered employers to retain documentation related to the provisions described above for three years.  If an employer fails to retain the required documentation (or allow regulators to access the documentation upon request), the OLSE will presume that the employer failed to comply with the law, absent “clear and convincing” evidence otherwise.

Finally, the new ordinances also require covered employers to post notices, which are to be published by the OLSE, about the new “Bill of Rights” provisions at every workplace, job site, or other location in San Francisco under the employer’s control that is frequently visited by its employees.