San Francisco Office of Labor Standards Enforcement

Seyfarth Synopsis:  June 7, 2018, when the city’s new Paid Sick Leave rules take effect, marks the latest chapter in the City by the Bay’s long history of imposing local employment standards that exceed state requirements. Here’s what you need to know before this latest San Francisco peculiarity begins.

On May 7, 2018, after considering public input on proposed rules to the City’s Paid Sick Leave Ordinance (PSLO), the San Francisco Office of Labor Standards Enforcement (OLSE) published new rules interpreting the PSLO, which is the granddaddy of municipal paid sick leave (PSL) mandates. The OLSE enacted its original interpretative PSL rules in May 2007. More recently, on January 1, 2017, the OLSE amended the PSLO. Now, nearly 18 months later, updated rules will take effect on June 7, 2018. Highlights of some key aspects follow.

Joint Employers

The PSLO broadly defines “Employer” as “any person…who directly or indirectly…employs or exercises control over the wages, hours, or working conditions of an employee.”

The new rules state that if an employee is jointly employed, and at least one employer is covered by the PSLO, each employer must comply with the PSLO. The rules follow California law to determine if an employee is jointly employed. The OLSE notes, by way of example, that joint employment can occur when an employer uses a temporary staffing agency, leasing agency, or professional employer organization. The new rules further state that a “controlled group of corporations” (as defined by the IRS Code), is considered to be a single employer under the PSLO. Employees of unincorporated businesses also are counted as working for one employer if the business satisfies the IRS’s “controlled group of corporations” definition.

Documentation

Under the PSLO, an employer may only take reasonable measures to verify or document an employee’s use of PSL. As stated in the OLSE’s original PSL rules, employers generally can require employees to provide reasonable documentation justifying their use of PSL for absences of more than three consecutive full or partial workdays. The new rules further explain that employer policies requiring a doctor’s note or other documentation when employees use PSL (a) to attend a medical appointment, or (b) in situations of a pattern or clear instance of abuse will be presumptively reasonable even if the use of PSL was for three consecutive workdays or less.

Rate of Pay

The new rules also provide guidance on calculating employees’ rate of pay for used sick leave and generally track the California statewide standards. Like the CA law,  San Francisco’s new PSL rules require different rate of pay calculations for exempt and non-exempt employees. Although the PSLO does not define “regular rate of pay” or “exempt employee,” the new rules defer to the California Division of Labor Standards Enforcement for calculating an employee’s regular rate of pay, and state that an employee’s exempt or non-exempt status is based on whether the employee is exempt from overtime pay under the FLSA and California law. If an individual is exempt, and no other forms of paid leave are provided, the employee must be paid his or her salary without any deduction for sick time taken. However, the time taken can be applied against the employee’s sick leave balance.

Rehired Employees and Breaks in Service

Under the PSLO, employees are entitled to use accrued PSL beginning on the 90th day of employment. For rehired employees, if an employee separates from the employer and is rehired by the same employer within one year, all previously accrued, unused PSL must be reinstated.

In instances where an employee separates from an employer before the 90th day of employment and is rehired within one year, the new rules clarify that the original period of employment is counted toward satisfying the 90-day usage waiting period. For example, if an employee separates from an employer after working for 45 days, and then one month later is rehired, the employee must work another 45 days before the employer needs to permit the employee to use his or her accrued PSL.

Unionized Workforces

The new rules make clear that many PSL practices or policies that have been deemed reasonable in a bona fide collective bargaining agreement (“CBA”) remain so, even if the CBA does not explicitly waive or reference the corresponding PSLO section. This can include practices or policies about notification, verification, increments of time in which paid sick leave must be taken, and sick leave pay rate.

The Upshot

In its introduction to the new rules, the OLSE stated that it was guided by the need to provide clear direction to employers and employees about the PSLO. While these new rules clarify certain gray areas under the PSLO, it remains to be seen whether they will result in further clarification or modifications to the OLSE’s interpretation of the Ordinance.

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Seyfarth Synopsis: In June 2017, the San Francisco Board of Supervisors passed an ordinance requiring employers to provide a private “lactation location” where new mothers can pump their milk as well as a “lactation break” during the work day, in addition to other amenities. The ordinance is effective January 1, 2018 and is more expansive than current state and federal law requiring employers to make reasonable efforts to provide lactation breaks throughout the workday. In the wake of its passage and the approaching effective date, the City’s Office of Labor Standards Enforcement and Department of Public Health are issuing administrative guidance for employers.

San Francisco’s Lactation Ordinance Is More Comprehensive Than State and Federal Law

As we wrote a few months ago, San Francisco’s Lactation in the Workplace Ordinance goes into effect January 1, 2018. Virtually all San Francisco employers are covered; there is no minimum employee threshold that may exempt smaller employers from coverage. This latest ordinance is another example of the City’s ongoing effort to enact employment regulations with the goal of either addressing a perceived need in the absence of state or federal law (such as the City’s 2007 paid sick leave ordinance that went into effect over eight years before the California version) or, in the case of the lactation ordinance, exceed the requirements of existing law.

The ordinance calls for a private “lactation location” that must meet several requirements. The lactation location must not be a bathroom and must be (1) shielded from view, (2) free from intrusion by other employees or the public, (3) available as needed, (4) “in close proximity to employees’ work area,” and (5) safe, clean, and free of toxic hazardous materials. The employer also is required to provide the employee with a place to sit, a table/desk or surface to place a breast pump and personal items, access to electricity, a sink with running water, and a refrigerator. The ordinance also states that lactation break time “shall, if possible” run concurrently with any break time already provided to the employee, such as unpaid rest periods.

The ordinance’s requirements are certainly rooted in an important public policy addressing the health of new mothers and babies.  But potential problems arise from the ordinance’s use of vague phrases such as “close proximity to employees’ work area.” How close does “close proximity” mean: the same room? Down the hall? In the same building? This means the ordinance is in dire need of clarification to help both employers and employees comply with its novel terms. Enter the San Francisco Office of Labor Standards Enforcement and Department of Public Health to provide guidance.

Administrative Guidance Sheds Light On Compliance Expectations

Perhaps recognizing its own shortcomings, the ordinance requires the San Francisco Department of Public Health to provide employers with guidance for best practices for accommodation, as well as a model policy and model lactation accommodation request form.  To that end, the Department recently posted samples of a Lactation Accommodation Policy and Request for Lactation Accommodation that employers may use in its own operations or as guidance to develop its own policies.

The Department also posted a summary of legal requirements and best practices.  The summary is based on the previous public memo issued by Supervisor Katy Tang, who is the supervisor responsible for drafting and proposing the ordinance.  Interestingly, the “best practices” include “optional but highly recommended amenities” such as a hospital-grade breast pump, calendar or room reservation system, a full length mirror, Wi-Fi, “resource station” for educational literature, and lockers to place personal belongings. They also suggest temporary reduced hours, job sharing, flex time, telecommuting, and allowing the caregiver to bring the child to workplace for feedings. The ordinance currently does not require these amenities, but these best practices may foretell an expectation of how the City may interpret (or amend) the ordinance down the road.

City regulators may also issue interpreting regulations, but that would require adherence to a lengthy rulemaking process that would include the opportunity for stakeholders to provide public comment. We have been in frequent contact with the helpful analysts at the OLSE regarding additional guidance, and have been told that they are still working on the guidance in anticipation of the January 1, 2018 effective date.  Of course, we will continue to update readers on any future developments.

Workplace Solutions

The ordinance requires San Francisco employers to issue its lactation accommodation policy to employees, so employers should review and, if necessary, update their policies to comply.  While the City has posted a sample policy and request form, sample policies are not always right for every employer.  As always, employers still should ensure that any policy they implement and enforce is right for their own operations.

If you would like assistance with a review of your policies, please feel free to contact one of Seyfarth Shaw’s attorneys.

 

On April 5, 2016, San Francisco became the first American jurisdiction to mandate fully paid parental leave for parents to bond with their child.  California already provided six weeks of partially paid leave through the state disability insurance program (55% of pay, up to $1,129 per week).  But the Paid Parental Leave Ordinance passed by the San Francisco Board of Supervisors compels employers to make up the difference, providing full pay for all six weeks of leave for most employees. The ordinance is effective January 1, 2017.

Why Does The Ordinance Only Apply To Most Employees? 

Employees must have been employed by their employer for at least 180 days before starting the leave period to be eligible.  Covered employees can be part-time or temporary employees, but they must spend at least 40% of their total weekly hours (and 8 hours per work week) for the employer within the geographic boundaries of San Francisco. Also, employees who qualify for the maximum state benefit are entitled only to a maximum benefit derived by dividing the state’s maximum benefit by the percentage of wage replacement under the California Paid Family Leave Law.  To be eligible for the supplemental compensation under the ordinance, employees must agree to allow their employer to apply up to two weeks of unused accrued vacation leave to help meet the employer’s obligation to provide supplemental compensation.

Which Employers Does The Ordinance Cover?

As of January 1, 2017, the ordinance will apply to all employers who regularly employ 50 or more employees, regardless of location.  Over the following year, the ordinance will be phased in until employers with just 20 employees or more must comply after January 1, 2018.

Where an employee works for more than one covered employer, the employers must contribute pro-rata based on the gross weekly wages received from each employer.  If an employer terminates an employee during the California Paid Family Leave period, then, under the ordinance, the employer must continue to pay supplemental compensation for the remainder of the leave period.

Note that rights under the ordinance can be waived through collective bargaining.

So What Happens Next?

Employers need to be aware that the ordinance includes notice and posting requirements, employer recordkeeping requirements, and anti-retaliation provisions.  The ordinance provides for regulatory implementation and enforcement by the San Francisco Office of Labor Standards Enforcement, as well as a private right of action.  Remedies include restitution, liquidated damages, and injunctive relief, plus attorneys’ fees.

Many larger employers already have leave policies that comply with the ordinance, but many other employers do not.  Employers need to make sure that they have compliant policies in place by the time the law goes into effect next year.  And employers not based in San Francisco, but who have employees who work there, must be especially careful not to run afoul of the new requirements.

If you have any questions about the new San Francisco Paid Parental Leave Ordinance, please reach out to Scott Atkinson or another member of our California Workplace Solutions group for additional guidance.

Edited by David Kadue and Coby Turner.

By Duwayne A. Carr and Laura J. Maechtlen

We previously blogged about pending legislation in San Francisco titled the “Retail Workers Bill of Rights,” a comprehensive set of policies introduced as two separate pieces of legislation (here and here) by San Francisco Supervisors Eric Mar and David Chiu

We learned that the Board of Supervisors tentatively—and unanimously—passed both  pieces of proposed legislation this week.  A confirmation vote is scheduled to occur on November 25, 2014, and, if the legislation passes at that time, the ordinances will become law in San Francisco 180 days after the effective date. 

While amendments might be considered prior to the final confirmation vote, we summarize the notable aspects of the two pieces of legislation here, in anticipation of that vote.  Of particular note to employers, the legislation provides a private right of action.  Any person aggrieved by a violation of the ordinance, any entity a member of which is aggrieved by a violation, or any other person or entity acting on behalf of the public, may bring a civil action in court against an employer for violating the ordinance.

Board of Supervisors File No. 140880:  Hours and Retention Protections for Formula Retail Employees

This proposed ordinance would apply to Formula Retail employers with 20 or more employees in the City.  “Formula Retail” establishments are defined for purposes of the new legislation as businesses with at least 20 retail sales establishments located worldwide. 

The proposed ordinance would require employers to: Continue Reading San Francisco Board of Supervisors Tentatively Passes “Retail Workers Bill Of Rights” – Final Vote Expected On November 25