On July 3, 2015, more than 1,200 retail chain stores in the City of San Francisco (roughly 12 percent of all City retailers) must comply with a new “Retail Workers Bill of Rights” (the “Bill of Rights”). This new law entitles covered employees to “more predictable” work schedules and other rights – as detailed in two recently enacted City ordinances: Ordinance No. 241-14, “Predictable Scheduling and Fair Treatment of Formula Retail Employees Ordinance”; and Ordinance No. 236-14, “Hours and Retention Protections for Formula Retail Employees Ordinance (together, they form the Bill of Rights).
Here are the key features of the new Bill of Rights and the steps covered employers should take to ensure compliance.
Employers Covered by the Bill of Rights The Bill of Rights applies to employers that:
- have at least 20 employees within the City;
- have at least 20* retail sales establishments worldwide (*a number that may be raised to 40 if certain pending amendments are passed); and
- own or operate a “chain store” (officially called a “Formula Retail Establishment” (“FRE”) under the City Planning Code), and defined as:
“A type of retail sales activity or retail sales establishment that has eleven or more other retail sales establishments in operation, or with local land use or permit entitlements already approved, located anywhere in the world. In addition to the eleven or more other retail sales establishments located in the World, maintains two or more of the following features: a standardized array of merchandise, a standardized facade, a standardized decor and color scheme, a uniform apparel, standardized signage, a trademark or a service mark.” (San Francisco Ordinance § 303.1.)
- Stated more simply, an FRE is a retail store that is part of an entity with 11 or more locations that have “a recognizable look or appearance.” See the City Planning Department Formula – Retail Use Affidavit & Checklist to determine if your business qualifies as an FRE.
The Bill of Rights also generally covers all “Property Services Contractors” – which means contractors or subcontractors that provide janitorial or security services at a San Francisco location of a covered FRE.
Employees Protected By the Bill of Rights The Bill of Rights protects any individual who:
- qualifies as “employee” under the City Minimum Wage Ordinance (Administrative Code Ch. 12R); or
- is scheduled, in a particular week, for an on-call shift of at least two hours for any employer within the geographic boundaries of the City, regardless of whether that individual is required to report to work for such shift.
Requirements of Covered Employers This is what covered employers must do to comply with the new Bill of Rights:
- offer, in writing, current part-time employees any additional hours of work before hiring new employees or using subcontractors or a temporary services or staffing agency. This applies when the additional work is the same or similar work that the current part-time employee is performing and is qualified to do. Employers are not required to provide part-time employees with additional hours of work once the employee reaches 35 hours of work per workweek.
- in the event of a change in control, the successor employer must retain for 90 days the existing employees who worked for at least six months prior to the sale (excluding the supervisory, managerial, or confidential employees) under the same terms of employment with respect to job classification, compensation, and number of work hours.
- During the 90-day period, the successor employer cannot terminate a retained employee without cause. In addition, if the successor employer decides to employ fewer employees, it must retain employees based on seniority or an applicable collective bargaining agreement.
- before a new employee begins work, provide him or her with a “good faith estimate,” in writing, of the number of shifts he or she can expect to work per month, as well as the days and hours of those shifts.
- provide all employees with their work schedules at least two weeks in advance by posting them or transmitting the schedule electronically (provided that all employees have access to the electronic schedule at the workplace).
- provide advance notice to an employee of any change to his or her work schedule, and if the employer changes or cancels an employee’s previously scheduled shift, provide the employee with a specified amount of “predictability pay” of up to four hours of pay at the employee’s regular rate of pay (the amount of pay changes depending on the notice provided).
- provide up to four hours of pay for each on-call shift for which an employee is required to be able but is not actually called in to work (unless the employer either cancels the on-call shift or moves it with at least 24 hours’ notice to the employee).
- provide equal treatment to part-time employees regarding starting hourly wage, access to employer-provided paid and unpaid time off (subject to prorating), and eligibility for promotions.
Penalties for Noncompliance The City Office of Labor Standards Enforcement (OLSE) is responsible for implementing and enforcing the Bill of Rights. If the OLSE determines that there has been a violation, it may order the non-compliant employer to provide any “appropriate relief,” including payment to employees for lost wages and a penalty of $50 to each employee or person whose rights under this ordinance were violated for each day that the violation occurred or continued. Employers also may receive an administrative fine of up to $500 per eligible employee employed by the employer for specific violations of the ordinance (e.g., failure to make an offer of additional available hours to part-time employees in writing).
Although the Bill of Rights does not include a private right of action, the City Attorney may bring a civil action against an employer believed to be in violation, to recover the payment of lost wages, a civil penalty up to the amount awarded for lost wages, reinstatement or other appropriate legal or injunctive relief. Upon prevailing in such civil action, the City shall be awarded its reasonable attorneys’ fees and costs.
The Bill of Rights also makes it unlawful to take an adverse action against any person in retaliation for exercising protected rights, including the right to file a complaint with the OLSE.
Notice, Posting, and Recordkeeping Requirements The Bill of Rights requires the OLSE to publish notices informing applicants and employees of their rights. The notices must be posted at every workplace, job site, or other City location under a covered employer’s control that its employees frequently visit.
Additional notice, posting, and recordkeeping requirements include:
- retaining work schedules and payroll records for three years;
- keeping copies of written offers to part-time employees for additional work hours for three years; and
- posting public notice of any change in control at the affected establishment.
Practical Next Steps To ensure full compliance starting this July, all retail chain stores operating in the City should closely review the entire Bill of Rights. For now, these steps should be taken:
- Modify policies and procedures as appropriate.
- Train human resources and supervisors on the new requirements.
- Draft the necessary notices, including notices of work schedules, to be used starting on July 3, 2015.
Client Alert 2015-119