As of July 3, 2015, retail employers in San Francisco will be required to comply with several new regulations regarding the work hours, scheduling, pay, and retention of its employees based on the passage of San Francisco’s first-ever “Retail Workers’ Bill of Rights.” The Retail Workers’ Bill of Rights, formally enacted under San Francisco Ordinance Nos. 141024 and 140880, is intended to protect retail employees and provide more stable work hours, scheduling, and treatment. Employers, on the other hand, will likely face challenges as the new law imposes stricter requirements regarding the scheduling and staffing of employees.
What employers fall under the Retail Workers Bill of Rights?
The Retail Workers’ Bill of Rights applies to any retail business who (a) employs at least 20 employees in San Francisco, (b) has at least 20 locations worldwide, and (c) and engages in retail sales or services regulated by Section 703.3 of the SF Planning Code, which means a retail establishment that maintains 2 or more of the following features: a standardized array of merchandise (50% or more of in-stock merchandise comes from a single distributor bearing uniform markings), a standard array of merchandise, a standardized façade, a standardized décor and color scheme, uniform apparel, standardized signage, a trademark or a service mark.
What are the new obligations for an employer covered under the Retail Workers’ Bill of Rights?
The key requirements from the Retail Workers’ Bill of Rights can be broken down into 5 categories:
San Francisco Ordinance No. 141024
1. Advance Notice of Work Schedules and Changes – Employers must provide all employees at least 2 weeks advance notice of work schedules and at least 1 week advance notice of any schedule changes. Otherwise, employers must pay an employee an additional 1 hour of pay for each shift change made with less than 7 days notice but more than 24 hours’ notice. For any shift change made with less than 24 hours’ notice, (b) employers must pay an employee an additional 2 hours of pay for each shift of 4 hours or less, and (c) an additional 4 hours of pay for each shift of over 4 hours. The extra pay is calculated based on the employee’s regular hourly rate. Note that the requirement to provide advance notice and compensation for schedule changes does not apply to schedule changes that the employee requests (i.e., employee-requested sick leave, time off, shift trades, or additional shifts).
 The Retail Workers’ Bill of Rights also protects contractors and subcontractors of the retail establishment that provide janitorial and/or security services in San Francisco.
1. On-Call Schedules – For each shift where an employee is required to be on-call but is not in fact called in to work, employers must now pay the employee (a) an additional 2 hours of pay for each shift of 4 hours or less, and (b) an additional 4 hours of pay for each shift of over 4 hours. The extra pay is calculated based on the employee’s regular hourly rate.
In addition, there are 7 exceptions where an employer would not be required to provide advance notice or compensation for schedule changes:
1. Business operations should not or cannot proceed due to threats to the employees or property;
2. Business operations cannot proceed due to lack of access to public utilities such as electricity, water, gas, or sewer systems;
3. Business operations cannot proceed due to an Act of God or cause outside of the employer’s control;
4. Another employee is unable to work his or her already-scheduled shift due to illness, vacation, or time off, and where the employer did not receive at least 7 days’ advanced notice of the employee’s absence;
5. Another employee fails to report to work on time, and/or was fired, sent home, or disciplined to stay home for his or her already-scheduled shift;
6. Employer requires the employee to work overtime (i.e. mandatory overtime);
7. Employee trades shifts with another employee or asks the employer for a schedule change.
2. Equal Treatment of Part-Time employees – Employers must treat part-time employees equally to full-time employees regarding (a) starting hourly wage, (b) access to time off provided by the employer, and (c) eligibility for promotions, where the jobs require equal skill, effort, responsibility, and are performed under similar working conditions. However, an employer may provide a different hourly pay between a part-time and full-time employee if the difference is based on reasons other than an employee’s part-time status, such as seniority, merit, production, or other performance based measurement.
San Francisco Ordinance No. 140880
3. Extra Hours for Current Part-Time Employees – Employers must first offer any extra hours of work to current part-time workers before hiring new staff or contractors . This must be done in writing. An employer must offer extra work hours if (a) the current worker is qualified to do the work as reasonably determined by the employer; and (b) the work is the same or similar to the work he or she has done at the retail business. Employers are only required to offer enough work hours to satisfy a 35 hour work week for the part-time worker.
4. Must Retain Employees for 90-Day Period After Business Ownership Changes – If the business is sold or changes ownership, and the business remains within San Francisco, the successor employer is required to retain for at least 90 days those current employees who have worked for the outgoing employer for at least 6 months. This does not apply to supervisory or managerial employees.
In addition, employers are required to post a notice of the employees’ Bill of Rights in the workplace, as well as retain employee work schedules and payroll records for a minimum of 3 years.
What are the consequences if employers fail to comply with the Bill of Rights?
A civil lawsuit may be brought against an employer for violations of Retail Workers’ Bill of Rights. An employer may also be subject to investigation by the Office of Labor Standards Enforcement (OLSE) and could be forced to pay penalties and/or additional wages. If an investigation is conducted, the employer would be provided an opportunity to respond, and could be subject to various consequences if a violation(s) is found, such as: monetary fines per violation per employee, payment of lost wages, additional monetary penalties, or offering additional work hours or reinstatement to an aggrieved employee.
The newly enacted Bill of Rights expands the obligations of retail establishments in San Francisco and will likely impact day-to-day operations, especially during seasonal shifts. We recommend that employers:
· Review current policies, procedures, and practices to ensure consistency with the new law;
· Revise written policies or personnel handbook, as necessary, to be in accordance with the new law;
· Prepare and post a notice of the Bill of Rights in an easily visible common area at the workplace;
· Inform all employees of the new Retail Workers’ Bill of Rights, and appropriately train any supervisors or managers responsible for HR, staffing, scheduling, and/or payroll, to ensure that business practices are carried out in accordance with the new law;
· Review, plan, and adjust staffing schedules and payroll systems in accordance with the new law.
While the above provides a general overview, it is always advisable for the retail businesses within San Francisco subject to these new statutes to seek legal advice as soon as possible to ensure compliance with San Francisco’s two new regulations which are now in full effect.