On July 3, 2015, the San Francisco Retail Workers Bill of Rights becomes operative. This ordinance creates major changes for many companies doing business in San Francisco.

Employers Affected

The law applies to “formula retail” businesses with (a) 20 or more locations worldwide, and (b) 20 or more employees in San Francisco, as well as their janitorial and security contractors. Pending amendments to the law, if passed, would change from 20 to 40 the number of retail establishments worldwide for a formula retail business to be covered by the law.

A “formula retail” business is any business that maintains two or more of the following features:

  • Standardized array of merchandise
  • Standardized façade
  • Standardized décor and color scheme
  • Uniform apparel
  • Standardized signage
  • Trademark or service mark

Requirements

1.  Advance Notice of Work Schedule

Employers must provide new employees with a good-faith initial estimate of the number of scheduled shifts the employee will receive each month, along with the days and hours the shifts will occur.

Employers must also provide employees with their schedules two weeks in advance. Schedules may be posted in the workplace or provided electronically, so long as employees are given access to the electronic schedules at work. If the posted schedule is changed, the employer must notify the employee of the change by in-person conversation, phone call, email, text message, or other electronic communication.  This requirement doesn’t apply if the employee requested the change.

2.  Penalties for Changing Schedules

If the employer changes an employee’s work schedule (meaning changes the date or time of the shift, or cancels it, or requires the employee to come into work on a day not previously scheduled), the employer must pay the employee penalties known as “predictability pay,” as follows:

  • For each schedule change an employer makes with less than seven days’ notice, but 24 hours’ or more notice, the employer must pay the employee one hour of pay.
  • For each schedule change an employer makes with less than 24 hours’ notice, the employer must pay the employee two hours of pay for each shift of four hours or less, and four hours of pay for each shift of more than four hours.
  • For each on-call shift for which an employee is required to be available but is not called onto work, the employer must pay between two and four hours of pay, depending on the duration of the on-call shift.

Penalties do not have to be paid if the schedule change is the result of an interruption of business operations due to threats to employees or property, if there is a failure of public utilities, if there is an act of God or similar disruption beyond the employer’s control, if another employee previously scheduled to work that shift calls in sick or takes time off with less than seven days’ notice, or if another employee scheduled to work that shift is fired or sent home for disciplinary reasons.  Also, penalties do not apply where the employer requires the employee to work overtime, or where the employee trades shifts with another employee or requests a change in his or her shift from the employer.

3.  Additional Hours Must Be Offered to Current Part-Time Workers

Employers must first offer additional hours of work to current part-time (less than 35 hours per week) employees before being able to hire any new employees or subcontractors.  The offer must be made in writing and the employer must keep a record of the written offer for three years.

4.  Equal Treatment for Part-Time Employees

Employers must provide equal treatment to part-time employees, as compared to full-time employees at their same level, with respect to (1) starting hourly wage, (2) access to employer-provided paid time off and unpaid time off, and (3) eligibility for promotions. 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.

5.  Employee Retention upon Sale of a Business

If a covered formula retail establishment is sold, the successor employer must retain, for 90 days, eligible employees who worked for the former employer for at least six months prior to the sale. The employer must post a notice of the “change in control” and provide employees with a notice about their rights. During the 90-day period, the employees cannot be terminated without good cause.

6.  Notice Requirement and Recordkeeping

Employers must inform employees about their rights under the new law.  The City is preparing a poster the employer must post, and the notice requirement is met if the poster is posted as required. Employers must retain work schedules and payroll records for three years.