United States: San Francisco's First "Retail Workers' Bill Of Rights" Creates More Obligations For Retail Employers

As of July 3, 2015, retail employers in San Francisco are required to comply with new regulations regarding the work hours, scheduling, pay and retention of their employees based on the passage of San Francisco's first-ever Retail Workers' Bill of Rights (RWBR). The RWBR, formally enacted under San Francisco Ordinance Nos. 141024 and 140880, is intended to protect retail employees and contractors and subcontractors of the retail establishment who provide janitorial and/or security services in San Francisco.  The RWBR provides for 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 RWBR applies to any retail business that (1) employs at least 20 employees in San Francisco, (2) has at least 20 locations worldwide, and (3) maintains two or more of the following features: a standardized array of merchandise (50 percent or more of in-stock merchandise from a single distributor bearing uniform markings), a standardized façade, a standardized décor and color scheme, uniform apparel, standardized signage and a trademark or a service mark ("Formula Retail Establishments," San Francisco Planning Code, Section 703.3).

What are the new obligations for an employer covered under the Retail Workers' Bill of Rights?

The key requirements of the RWBR are included in five categories:

San Francisco Ordinance No. 141024
(1)    Advance Notice of Work Schedules and Changes: Employers must provide all employees at least two weeks' advance notice of work schedules and at least one week's advance notice of any schedule changes.

Otherwise, employers must pay an employee an additional one hour of pay for each shift change made with less than seven days' notice but more than 24 hours' notice. For any shift change made with less than 24 hours' notice, employers must pay an employee an additional two hours of pay for each shift of four hours or less, and an additional four hours of pay for each shift of more than four 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).

(2)    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 two hours of pay for each shift of four hours or less, and (b) an additional four hours of pay for each shift of more than four hours. The extra pay is calculated based on the employee's regular hourly rate.

In addition, there are seven exceptions where an employer would not be required to provide advance notice or compensation for schedule changes:

  • Business operations should not or cannot proceed due to threats to the employees or property.
  • Business operations cannot proceed due to lack of access to public utilities such as electricity, water, gas or sewer systems.
  • Business operations cannot proceed due to an Act of God or cause outside of the employer's control.
  • 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 seven days' advanced notice of the employee's absence.
  • 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.
  • The employer requires the employee to work overtime (i.e., mandatory overtime).
  • The employee trades shifts with another employee or asks the employer for a schedule change.

(3)    Equal Treatment of Part-Time Employees: Employers must treat part-time employees equally with 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 and responsibility, and are performed under similar working conditions. However, an employer may provide a different hourly pay for a part-time and a 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
(4)    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.

(5)    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 six months. This does not apply to supervisory or managerial employees.

In addition, employers are required to post a notice of the RWBR in the workplace and retain employee work schedules and payroll records for a minimum of three years.

What are the consequences if employers fail to comply with the Retail Workers' Bill of Rights?

A civil lawsuit may be brought against an employer for violations of the RWBR. 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 afforded an opportunity to respond, and could be subject to various consequences if one or more violations are 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 RWBR expands the obligations of retail establishments in San Francisco and will likely impact day-to-day operations, especially during seasonal shifts.

 Employers would be prudent to:

  • Review current policies, procedures and practices to help ensure consistency with the new law
  • Revise written policies or personnel handbooks, as necessary, to be in accordance with the new law
  • Prepare and post a notice of the RWBR 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 human resources, 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.

It is advisable for the retail businesses within San Francisco subject to these new statutes to seek legal advice as soon as possible to achieve compliance with San Francisco's two new regulations, which are now in full effect.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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