July 27, 2015 New San Francisco Ordinances Supersize Retail Employer Obligations

Summary

On July 3, 2015, Articles 33F and 33G of the San Francisco Police Code, also known as the "Retail Workers Bill of Rights," became operative.   Amended versions will take effect on August 14, 2015.   The ordinances state they are intended to eliminate "erratic and on-call scheduling practices that have become pervasive in formula retail establishments," and to help employees avoid "involuntary part-time status." 

The ordinances affect "formula retail" establishments with at least 40 locations worldwide and 20 employees within the City and County of San Francisco.  A "formula retail" establishment maintains two or more formulaic features, such as a standardized array of merchandise, a standardized faรงade/signage, or uniform apparel for employees.  Chain retail employers, such as apparel stores, restaurants, financial services branches, movie theaters and gyms should carefully review whether their San Francisco establishments trigger coverage under these ordinances.  

The ordinances are quite detailed.  We have outlined the major components below.

Discussion

Predictable scheduling requirements for all covered retail employees:

  • New hires must receive written, good faith estimates of the expected minimum number of scheduled shifts per month, and the days and hours of those shifts. 

  • Covered employers must provide at least two weeks' scheduling notice by posting the work schedule, inclusive of on-call shifts, in a conspicuous place on the premises, or by transmitting the schedule by electronic means.

  • Subject to certain exceptions, covered employers must compensate employees with "predictability" pay for any changes to a previously scheduled shift, including an on-call shift (anywhere from one to four hours of additional pay).

  • If an employee is required to be available for an on-call shift and is not actually called into the workplace, the employee must still receive two to four hours of "predictability" pay for each on-call shift.

Improved working conditions for part-time employees:

  • Covered employers must offer, in writing, additional hours to existing part-time employees prior to hiring additional workers.  Part-time employees have 72 hours to accept the additional work, in writing, before the employer can hire new employees.  Covered employers must use equitable methods of implementing this "right of first refusal" to avoid potential disparate treatment claims.

  • Covered employers must provide part-time employees with the same starting hourly wage as full-time employees who hold jobs requiring equal skill, effort and responsibility, and performed under similar working conditions. 

  • Pay differentials between part-time and full-time employees may be permissible if they are based on factors other than part-time status. 

  • Part-time employees must receive the same access to paid and unpaid time off as full-time employees with the same job classification.

  • Part-time employees must have the same eligibility for promotions as full-time employees in the same job classification.  However, an employer may condition eligibility based on an employee's availability to work full-time, and for any other reason not related to part-time status (e.g., work experience).  

Notice obligations for covered employers:

  • Covered employers must post notices of employee rights under these ordinances.

  • Covered employers that utilize janitorial and security service contractors must include provisions in their agreements to comply with the obligations set forth above.  Applicable collective bargaining agreements may expressly waive any or all of the protections of these ordinances by clear and unambiguous terms.  

Impact on corporate change in control transactions: 

  • When a covered employer and its successor fully execute an agreement effecting a corporate change in control, the outgoing employer must provide a retention list of "eligible employees" to the successor employer.

  • For a transition period of 90 days after the successor absorbs incumbent employees, the successor must retain the employees on the retention list under the same terms of their incumbent employment. 

  • Importantly, a successor employer may not discharge a retained employee during this 90 day transition period without "cause."  This requirement substantially deviates from the well-established "at-will" employment doctrine. 

What This Means

The San Francisco chain retail ordinances expand the protections available to retail employees well beyond existing state or federal law.  Covered employers should review their existing payroll, scheduling and hiring practices, particularly automated payroll/scheduling software, to ensure compliance with the new requirements.  We invite you to contact us if you have any questions concerning the impact of these ordinances on your workplace.

This E-Update was authored by Joanne Alnajjar Buser.  For more information, please contact Ms. Alnajjar Buser, or any other Paul, Plevin attorney by calling (619) 237-5200.