San Jose voters recently passed Ballot Measure E, the “Opportunity to Work Ordinance.” The new Ordinance, which is similar to San Francisco’s existing Formula Retail Employees Ordinances, will require San Jose employers with 36 or more employees to offer additional work hours to existing part-time employees before hiring new staff. The San Jose Ordinance is aimed at increasing wages for part-timers and preventing employers from hiring additional staff to avoid providing health care and other benefits to current part-time employees who could take on additional work hours. The Ordinance takes effect on March 13, 2017. Here’s an overview of what employers need to know.
The Ordinance applies to businesses that have 36 or more employees and are subject to San Jose’s business tax or maintain a place of business in San Jose which is exempt under California law from San Jose’s business tax. While the Ordinance is not entirely clear, it appears that, with limited exceptions for chain businesses and franchises, the threshold number of employees only includes employees working in San Jose. For a chain business not owned by a franchisee, the Ordinance specifies that the total number of employees is the combined number of employees at every location of the chain, whether or not the employees are located in San Jose, and for a franchisee, the total number of employees is determined by the combined total number of employees at every location owned by the franchisee operating under the same franchise, whether or not located in San Jose.
The Ordinance provides an exemption where “all or any portion” of its provisions are expressly waived in a collective bargaining agreement, although only “to the extent required by federal law.” Also, the City’s Office of Equality Assurance, which will enforce the Ordinance, may grant a “hardship exemption” for up to 12 months if the employer can show that it has taken reasonable steps to comply but full and immediate compliance would be “impracticable, impossible, or futile.” The Ordinance will apply to Welfare-to-Work programs, though participants may opt out of the coverage.
The Ordinance requires covered employers to offer additional hours to “existing qualified” part-time employees before hiring additional employees or subcontractors, including hiring through temporary services or staffing agencies. The hours only have to be offered to those employees who have the skill and experience to perform the particular additional hours of work, as determined by the employer’s “good faith and reasonable judgment.” The employer is required to use a “transparent and nondiscriminatory process” in distributing the additional hours among existing employees. The Ordinance does not require an employer to offer an employee additional hours where that would cause the employee to incur overtime or other premium hours.
Posting, Recordkeeping and Enforcement
Employers will be required to post a Notice of Employee Rights, which will be published by the Office of Equality Assurance. Employers also are required to retain: 1) records of employee work schedules; 2) for any new hire, documentation of the offer of additional hours of work to existing employees prior to completing the hire; and 3) any other records that the Office requires employers to maintain to demonstrate compliance.
The Ordinance borrows enforcement and retaliation provisions from the City’s Minimum Wage Ordinance. The Office of Equality Assurance may issue an Administrative Citation or seek a Compliance Order for violations, and may impose a fine of $50/day plus back wages and interest, although penalties and fines will not be imposed for an employer’s first violation of the additional hours provision. The Office and/or complaining employee may also file a civil lawsuit to enforce the Ordinance.
Employers are prohibited from retaliating against an individual for exercising rights under the Ordinance, and there is a rebuttable presumption that any “adverse action” taken against an individual within 90 days of exercising his or her rights is in retaliation for the exercise of such rights.
What to Do Now
There are still many uncertainties regarding coverage and requirements under the new Ordinance. For example, determining which employees are “qualified,” what are “additional hours,” and what process an employer must follow to offer and distribute those hours. The Office of Equality Assurance will soon publish the new Notice and other compliance resources, which will hopefully provide some needed clarity for employers. In the meantime, employers should be certain to post the required Notice by the Ordinance’s March 13, 2017 effective date, and begin the process of reviewing scheduling and recordkeeping practices for compliance with the new law. For more information, be sure to check back to the Office of Equality Assurance’s website. The Ordinance is available here.
Employers should also note that California lawmakers recently introduced an “Opportunity to Work” bill (A.B. 5) which, if passed, would apply similar scheduling requirements to employers throughout the state. We’ll keep you posted.
Miller Law Group exclusively represents business in all aspects of California employment law, specializing in litigation, wage and hour class actions, trials, appeals, compliance advice and counseling. If you have questions about these developments or other workplace obligations, please contact us at (415) 464-4300.
This Alert is published by Miller Law Group to review recent developments in employment law. This material is designed to provide informative and current information as of the date of the Alert, and should not be considered legal advice.