San Francisco recently enacted two sweeping ordinances that are being referred to as the “Retail Workers Bill of Rights” (you can find the ordinances here and here). The new laws impose strict new requirements on retail employers and establishments in the City of San Francisco. While the ordinances became effective on January 5, 2015, employers will have until July 5, 2015 to comply. Below is an overview of the new laws’ requirements.

Affected Employers—“Formula Retail Establishments”

The new laws apply to “Formula Retail Establishments” with at least 20 retail sales establishments worldwide and 20 or more employees in San Francisco. The term “Formula Retail Establishment” applies to retail sales or service establishments that 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.

New Requirements for Formula Retail Establishments

Offering Additional Hours Worked to Current Part-Time Employees – Under the ordinances, employers must offer, in writing, additional work to qualified part-time employees before hiring new employees or using contractors or staffing agencies to perform additional work. Employers only need to offer part-time employees up to the number of hours required for the employee to reach 35 hours worked per week. Employers must retain offers of additional hours to employees for at least three years.

Good Faith Initial Estimate of Minimum Hours and Two Weeks’ Notice of Schedules – Prior to the start of employment, employers are required to provide new employees with a good faith written estimate of the employee’s expected minimum number of scheduled shifts per month and the days and hours of those shifts. The estimate need not include on-call shifts. The ordinances also require employers to provide employees with their schedules two weeks in advance. Employers must retain employee work schedules and payroll records for at least three years.

Notice of Schedule Changes and “Predictability Pay” for Schedule Changes – Employers must provide employees with notice of schedule changes. If the employer changes an employee’s schedule on less than seven days’, but more than 24 hours’ notice, the employer must provide an extra hour of pay for each changed shift. A “schedule change” is defined as changing the date or time of a scheduled shift, cancelling a scheduled shift, or requiring the employee to work when he or she was previously unscheduled. However, an employer does not need to provide “predictability pay” when it extends an employee’s scheduled shift to include overtime hours.

If the employer changes the employee’s schedule on less than 24 hours’ notice, the employer must provide an additional two hours of pay if the changed shift is four hours or less or an additional four hours of pay if the changed shift is longer than four hours.

Key Exceptions: Employers do not have to provide “predictability pay” if any of the following conditions apply:

  • Another employee was scheduled to work, but is unable to work due to illness, vacation, or other approved time off, and the employee failed to provide the employer with at least seven days’ notice.
  • Another employee was scheduled to work, but failed to report to work on time or is sent home as a disciplinary action.
  • The employee requests a change in shifts or trades shifts with another employee.
  • Emergency situations: the business closes due to threats to safety, public utility failure, a natural disaster, or a state of emergency declared by the Mayor or Governor.

On-Call Shift Pay – If an employee is required to be “on-call,” but is not called in to work, the employer must provide the employee with two hours of pay if the on-call shift lasted four hours or less, or four hours of pay if the on-call shift exceeded four hours.

Equal Treatment for Part-Time Employees – Employers must provide equal treatment, subject to certain qualifications, for full-time and part-time employees regarding: (1) starting hourly wage; (2) access to paid and unpaid time off; and (3) eligibility for promotions. However, hourly wage differentials are permissible if they are based on reasons other than part-time status, such as seniority or merit systems. Further, employees’ time off allotments may be prorated based on hours worked.

Workplace Posting – Formula Retail Establishments are required to post at the workplace a notice informing covered employees of their rights under the new laws.

Require Contractor Compliance – Covered employers must include in service contracts with contractors for janitorial or security services: (1) a provision requiring the contractor to comply with the new laws; and (2) a copy of the new laws.

Penalties for Non-Compliance

The San Francisco Office of Labor Standards Enforcement (“OLSE”) is charged with implementing and enforcing the ordinances. The OLSE can order compliance, impose administrative fines, and require employers to pay lost wages and reimburse the City’s enforcement costs. Additionally, the ordinances authorize the City Attorney to bring a civil action against employers for violation of the laws. The City may recover payment of lost wages, civil penalties, reinstatement of employment, and reasonable attorney’s fees and costs. Notably, if an employer fails to maintain or retain records as required by the new laws, the City will presume that the employer did not comply with the ordinances.