San Francisco Retail Workers gain new Rights — what Employers need to Know

On July 3, 2015, San Francisco adds another law to its long list of city-wide labor ordinances. In addition to the City's laws on paid sick leave, minimum wage, family friendly workplace, and health care security, employers should now get acquainted with Formula Retail Labor Protections, also known as the Retail Workers Bill of Rights.

San Francisco's Retail Workers Bill of Rights imposes new and substantial obligations on retail and service establishments that do business in San Francisco. The Bill includes new rules for the hiring, scheduling, benefits, promotion, payment and equal treatment of full-time and part-time employees of certain San Francisco retailers. Important features of the Bill are outlined below.

Employers Covered by the Bill

The Retail Workers Bill of Rights applies to any employer that (1) has at least 20 employees within the city of San Francisco, (2) has a least 20 retail sales establishments worldwide and (3) operates a "Formula Retail Establishment," otherwise known as a "chain store." A chain store as one that has at least two of the following features: standardized array of merchandise, standardized façade, a standardized décor and color scheme, uniform apparel, standardized signage, trademark or service mark.

Requirements for Compliance

Some of the requirements for covered employers are listed below:

• Offer Additional Work to Part-time Employees. Before an employer hires new employees, he or she must offer the additional work to existing part-time employees who work less than 35 hours per week and who are qualified to perform the work. However, if the work is not the same or similar to the existing employee's work, an employer need not offer.
• Employee Retention. If an existing employer sells the retail establishment, the new employer must retain employees, for 90 days, who worked for the former employer for at least 6 months.
• Initial Estimate of Work Schedule. The employer must provide new employees with an estimate, written in good faith, of the employee's expected minimum number of shifts scheduled for the month, including the days and hours of each shift.
• Notice of Work Schedules. Employers must provide employees with their schedules two weeks in advance.
• Predictability Pay. If an employer changes an employee's schedule with less than seven days' notice, the employer must pay the employee a premium of 1 to 4 hours of pay, depending on the amount of notice and length of the shift.
• Pay for on Call Shifts. If an employee is required to be "on-call," but is not called into work, the employer must pay the employee a premium of 2 to 4 hours of pay at the employee's regular rate, depending on the amount of notice and length of the shift. Several exceptions for predictability pay and pay for on call shifts may apply (e.g. public utility failure, another employee fails to show, or an employee trades shifts).
• Equal Treatment for Part-Time Employees. Employers must treat part-time employees and full-time employees equally with regard to starting hourly wage, access to paid time off/unpaid time off, and eligibility for promotions. However, hourly wage differentials based on seniority, merit, or other systems, are permissible.

Penalties for Non-Compliance

The City Office of Labor Standards Enforcement (OLSE) has the authority to implement and enforce the Bill. OLSE may impose fines of $500 per eligible employee, per violation and award a penalty of $50 to each employee whose rights were violated. In addition to these fines, the OLSE may enjoin suspected violations pending an investigation. The City Attorney may also bring suit against an employer to render appropriate legal relief.

Recommendations for Compliance

Covered employers should prepare for the Bill to take effect on July 3, 2015. Although this list is not exhaustive, covered employers should:

• Review current hiring, wage, and scheduling policies to confirm equal treatment of part-time and full-time employees.
• Review local notice, posting, and recordkeeping requirements.
• Draft compliant work schedule notices.
• Educate managers and human resources personnel about these new requirements.
• Update employee and manager handbooks.

If you have any questions about compliance with this new bill, please contact Amy K. Jensen in Hinshaw's San Francisco office.