Calif.: San Francisco Ordinance Imposes New Burdens on Retail Employers

By Michael Brewer, Christopher Cobey and Jason Shapiro, © Littler Dec 16, 2014
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In addition to federal and state laws, San Francisco has 10 labor and employment laws that apply only to employees working within the city. On Dec. 5, 2014, the 11th San Francisco-specific employment law was enacted, expanding the rights of some retail workers employed by specified retail employers.

The “Retail Workers Bill of Rights,” which consists of two ordinances (Nos. 140880 and 141024), will regulate the employment of some part-time retail workers in San Francisco.

Which San Francisco Employers Are Affected?

The Retail Workers Bill of Rights covers employers that qualify as “formula retail establishments” (FRE) under the San Francisco Planning Code, have at least 20 retail sales establishments located worldwide and employ 20 or more people within San Francisco. Section 703.3 of the San Francisco Planning Code defines “formula retail use” as a retail sales establishment that maintains two or more of the following features:

  • A standardized array of merchandise (i.e., 50 percent or more of in-stock merchandise comes from a single distributor bearing uniform markings).
  • A standardized façade.
  • A standardized décor and color scheme.
  • Uniform apparel.
  • Standardized signage.
  • A trademark or service mark.

The Retail Workers Bill of Rights is estimated to affect approximately 1,250 retail chain stores in San Francisco. Business groups, including San Francisco’s Chamber of Commerce, have publicly opposed the new legislation, claiming that the legislation does not provide sufficient flexibility to employers that experience seasonal shifts and does not accommodate small, independent franchisees.

Which San Francisco Employees Are Affected?

The Retail Workers Bill of Rights covers individuals who qualify as “employees” under the city’s minimum wage ordinance (Administrative Code Chapter 12R), as well as any individual who, in a particular week, is scheduled for an on-call shift of at least two hours for any employer within the geographic boundaries of the city, regardless of whether the person is required to report to work for such shift.

What Are the New requirements for Affected Employers?

The following are some of the more notable requirements under Ordinance No. 140880:

*Employers must first offer, in writing, any additional hours of work to current part-time employees before hiring new employees or using subcontractors (including janitorial or security services contractors), temporary services, or a staffing agency to do work, but only if the part-time employees are qualified to do the additional work and the additional work is the same or similar to work the employees have performed for the employer already. Employers are not required to provide employees with additional hours of work that would cause the employee to work more than 35 hours in the workweek.

*If the employer’s business changes ownership, the new owners must retain the existing employees (excluding the supervisory, managerial, or confidential employees) for at least 90 days from sale or other transfer of the business.

The following are some of the more notable requirements under Ordinance No. 141024:

*Employers must provide notice to employees of any change to the employee’s posted or transmitted work schedule, and if the employer changes or cancels an employee’s previously-scheduled shift, the employer must provide the affected employee with a specified amount of “predictability pay” of up to four hours of pay at the employee’s regular rate of pay.

*Prior to the start of employment, employers must provide new employees with a “good faith estimate,” in writing, of the employee’s expected minimum number of scheduled shifts per month, as well as the days and hours of those shifts.

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