San Francisco Labor Laws Explained
Employers operating in the City and County of San Francisco would do well to know the ways in which local laws differ from and/or augment state law. The State Labor Code regulates many aspects of employment in California, but in San Francisco, by charter, local ordinances relating to employment are adopted by the Board of Supervisors and may vary somewhat from the Labor Code. Many of San Francisco’s local labor laws are more generous to employees and employees should have a general awareness of these local laws.
San Francisco has a unique and extensive set of laws governing wages and working conditions for private sector employees that frequently surpass the protections of California law and apply to employers across industries and sectors. Local law provisions include health care security , leaves of absence, overtime, and wage protections, as well as requirements for more general employee healthcare, notice requirements for hiring and termination, and ultimately the right to unionize.
The following is a discussion of some of the more significant San Francisco employment-related ordinances.
Minimum Wage and Overtime Provisions
Employers must pay their employees the higher of the federal, state, or city minimum wage. For 2016, the minimum wage in San Francisco is $13.00 per hour for employers with 11 or more employees and $12.25 per hour for employers with 10 or fewer employees; the wage will increase to $14.00 per hour for all employers on July 1, 2016 and to $15.00 per hour on January 1, 2017. California’s minimum wage is currently $10.00 per hour, and increases to $10.50 per hour on January 1, 2016 for employers with 26 or more employees, and to $10.00 per hour for employers with 25 or fewer employees on January 1, 2016. The federal minimum wage is currently $7.25 per hour. While employers based in San Francisco must pay the applicable minimum wage for each of their employees who perform any work within the city’s boundaries, some of their employees may be exempt. The City has its own exemption criteria for overtime, which differ slightly from the state and federal regulations. However, the federal Fair Labor Standards Act (FLSA) does not exempt employment performed in San Francisco, and where a worker performs some work outside the city during his or her pay period, employers must also pay him or her according to the higher of the City, State or federal minimum wages for any hours worked within the city.
Salaried Exempt Employees:
Under California law, certain salaried employees may be exempt from overtime requirements even if they do not fit into an "exempt" classification. The exempt salary must exceed twice the minimum wage for full-time employment. For 2016, this means that an employee must earn more than $41.09 per hour ($3,473.33 per month / $41,739.96 per year). Of course, an employee who works fewer than 40 hours per week is entitled to receive at least minimum wage for all hours worked.
Other Wage Rules:
Sick Leave: Employers must allow San Francisco employees to earn and use at least 1 hour of paid sick leave for each 30 hours of work. Employers with 10 or more workers in the city must provide a minimum of one hour of paid sick leave for every 30 hours worked by the employee. The number of hours that an employee may accrue is capped at 40 hours per 12-month period, but there is no limit to the amount of paid sick leave that an employee can accrue overall.
Maternity Leave: Employers in the City are required to grant up to four months of unpaid leave to eligible employees to manage prenatal care, deal with a pregnancy-related disability, give birth, and care for a newborn baby.
Parental Leave: New parents in San Francisco are entitled to up to six weeks of protected leave to bond with a newly born, adopted or fostered child, regardless of whether the birth parent takes advantage of maternity leave.
Criminal Background Check: San Francisco’s Affirmative Furthering Fair Housing and Opening Access to Housing Ordinance (FFC), limits the permissible uses of criminal background information in the housing process. For example, a tenant may not be disqualified from housing based solely on a prior conviction of a sexual offense involving public safety that is more than seven years old.
Paid Sick Leave Obligations
Employees who have worked for the San Francisco office for at least thirty days in a 12-month period are entitled to not less than one hour of paid sick leave for every thirty hours worked, up to a maximum of forty hours per calendar year for employers with less than one hundred employees, or seventy-five hours per calendar year for employers with one hundred or more employees. An employee may carry over to the next calendar year no more than forty hours or accrued paid sick leave.
Employees may use accrued paid sick leave for: Employers are not permitted to require employees to make their own replacements as a condition of using paid sick leave. Moreover, employers may not require certification from the employee’s health-care provider in order for the employee to use paid sick leave unless the employee has been absent for three or more consecutive working days. An employer may not retaliate or discriminate against an employee for using or attempting to use paid sick leave.
Employers are entitled to set a reasonable minimum increment for use of paid sick leave not to exceed one hour. The entitlement to paid sick leave begins when employees have worked at least 90 days. Employers must provide notice of this law to all employees by February 5, 2017.
Family and Medical Leave Regulations
San Francisco follows California law in establishing their family and medical leave policies. California has several laws that outline State Family and Medical Leave laws. The Family Medical Leave Act (FMLA) and the California Family Rights Act (CFRA) provide for qualified leave time for California employees.
In general, almost every employer in California must comply with the provisions of both the FMLA and the CFRA. Under CFRA, employers with 50 or more employees must provide each employee with a right to take up to 12 workweeks of unpaid, job-protected leave during any 12-month period for the birth of a child, for adoption, for certain purposes related to the employee’s own illness and for those of a family member, or in relation to a qualifying exigency related to military service. For employees working in locations with fewer than 50 employees, the employer is only required to allow an employee to take a medical leave if the leave is taken for the serious health condition of the employee or for the serious health condition of a family member.
The FMLA requires employers with 50 or more employees to provide eligible employees up to 12 weeks of unpaid, job-protected leave in a single 12-month period for the birth of a child; for adoption or foster care placement; to recover from an employee’s own serious health condition; to recover from an employee’s own serious health condition; or for a qualifying exigency arising from the covered active duty or call to covered active duty of a spouse, or domestic partner, parent, or child in the armed forces.
Covered employers are not required to compensate the employee for the first three days of leave for purposes of birth or placement of a child, or for the serious illness of a child, parent, spouse, or domestic partner. Time off must be paid for the first three days of leave for the employee’s own serious health condition. San Francisco law takes precedence over state and federal law, creating a number of additional requirements for both employers and employees in the Bay Area.
Anti-Discrimination Protections
The Office of Labor Standards Enforcement ("OLSE") administers the San Francisco nondiscrimination ordinance, which prohibits discrimination in employment, housing, public accommodations and benefits provided by or on behalf of the City. Human Rights Commission ("HRC") regulations also prohibit the use of discriminatory employment tests, and require employers to provide reasonable accommodation for disabilities and for religious observances that do not impose an undue hardship on the employer.
San Francisco has enacted equality provisions relating to a number of protected categories, including race, color, ancestry, age, religion, marital status, sexual orientation, gender identity, medical conditions, pregnancy, disability and parental status. Employers must not discriminate in hiring, training, promotion, transfer, demotion, compensation, discipline, layoff or termination because of such category or characteristic.
The City implements the provisions of these laws through its various agencies. Employees who claim to be victims of unlawful discrimination are encouraged to seek administrative relief through complaint and investigation procedures administered by the OLSE and the HRC. Remedies may include back pay, front pay, reinstatement and other forms of affirmative relief.
Predictable Scheduling Law
The Paid Sick Leave and Predictable Scheduling Ordinances supplement a city-wide minimum wage (rising to $15 on July 1, 2018) and establishes rules for how and when employees should be compensated if their schedules change. The Paid Sick Leave Ordinance provides for paid sick leave for workers in the city, while the Predictable Scheduling Ordinance provides certain protections for employees who have "variable schedules , " meaning consistent but unpredictable work schedules such as part-time or on-call employment. It covers all employees who work in San Francisco (including private and nonprofit sector workers), but does not cover employees covered by a collective bargaining agreement that includes premium wage rates, overtime differentials and a regular premium rate of pay for hours worked on a day off. It also does not cover employees covered by a collective bargaining agreement that expressly waives the provisions of the Ordinance, if the waiver is approved by the SF Office of Labor Standards Enforcement (OLSE).
Worker Entitlements and Employer Obligations
In California, San Francisco city ordinances supplement the protections and benefits provided by California law. These laws establish and extend workplace rights and employers must comply with these laws in order to avoid appropriate penalties and safeguards. The San Francisco City provisions include employee protection when dealing with immigration and language barriers, paid sick leave, paid parental leave, family friendly workplace policies, use of supplemental and mandatory sick leave and health care security, and use of SF sick leave. Employers must comply with general Fair Employment and Housing Act (FEHA) provision that prohibit discrimination based on "sex", defined to include gender, gender identity, and gender expression. This means that an employer may not implement a dress code, grooming standard, or other policy that is more burdensome for one gender than the other, or otherwise more burdensome for a transgender employee than a non-transgender employee. Employers in San Francisco must comply with San Francisco’s Fair Chance Ordinance (FCO) which places restrictions on inquiries regarding and use of criminal history of job applicants. Employers in San Francisco must allow employees to request accommodations for medical or religious reasons and engage in a good faith interactive dialogue regarding the request. Further, San Francisco employees are entitled to:
Employers and industries covered: all employers in San Francisco (regardless of the size of the business, nonprofit organization or public agency) and all persons performing services within the geographic boundaries of San Francisco (e.g. janitors, gardeners, food service workers, etc.) in exchange for wages, including temporary and leased workers. Does San Francisco require paid sick days for employees? Yes, San Francisco requires employers to provide paid sick leave to their employees in San Francisco.
Navigating Compliance with San Francisco Labor Laws
Employers and employees should keep abreast of the updates to San Francisco’s labor laws by routinely checking the Office of Labor Standards Enforcement ("OLSE") website, which has links to the San Francisco Municipal Codes and other sources of information.
Additionally, the OLSE publishes FAQs on a number of issues for employers and employees. For instance, the OLSE updates a minimum wage FAQ as each increase (January 1) approaches. The latest minimum wage FAQ is available here.
The Department of Elections maintains a database of all filed forms for required San Francisco labor law posters, including a list of annual and new forms for each year.
Finally, the legal aid arm of the Bar Association of San Francisco puts out a comprehensive Employee Handbook Toolkit that guides users through the process of constructing a San Francisco-compliant employee handbook. The toolkit includes comprehensive guides to San Francisco law addressing wages, health care security, family leave, a notice and agenda for discussing workplace policies, forms, a guide to creating a handbook, and templates for creating job duties and responsibilities, a statement of at-will employment, a grievance procedure, and an acknowledgment of understanding the handbook and its policies.
Frequent Violations and Remedies
Despite the efforts of the Office of Labor Standards Enforcement, labor law violations in the City are still not uncommon. Given the breadth of the frequently violated laws, employers may benefit from a discussion with a San Francisco employment law attorney regarding compliance, and employees seeking employment in San Francisco would be wise to educate themselves on their rights and obligations.
Common violations of the San Francisco Minimum Wage Ordinance include:
Disaffected San Francisco employees should first raise their concerns with their human resources department or manager. If this does not resolve the issues, they can file a complaint with the OLSE online. The OLSE will investigate the complaint, and if it is substantiated, it will order payment to the employees. An employer who violates any OLSE enforcement order can be fined $50 a day for each day of non-compliance, in addition to the amount of compensation owed under the order . You can appeal the OLSE’s findings but it is a challenging and expense process.
If the OLSE finds a violation and issues an enforcement order, you can also file a civil action in Superior Court to recover: (1) all amounts due to you plus interest, (2) liquidated damages (100% of wages for Ordinance violations not to exceed a maximum of $10,000), and (3) attorney’s fees. You can do so without pre-filing any complaint with the OLSE if the OLSE has not already issued a final order in your favor. However, if the OLSE has heard the complaint and issued an order in your favor, the law requires that you wait at least 15 days before you can file your own lawsuit which would essentially seek the same damages as the administrative order.
Claimants have 4 years from the violation to file a claim for unpaid wages, and 3 years from the violation to file a claim for other unpaid or underpaid benefits or penalties.