San Jose, California Ordinance Aims to Increase Job Opportunities for Low-Income Workers
Author: Rena Pirsos, XpertHR Legal Editor
December 13, 2016
San Jose, California voters have approved the Opportunity to Work ordinance, which is intended to provide part-time, low-income workers with more job opportunities that will help them increase their earnings and access benefits. Under the new ordinance (aka Measure E on the San Jose ballot), before certain employers may hire new part-time or temporary workers, they will be required to offer additional hours of work to current part-timers who they believe have the skills and experience to do the work. According to Silicon Valley Rising, the group that authored the ordinance, the measure will curtail the practice of large- and medium-sized Silicon Valley employers limiting workers' hours to avoid paying for health insurance and other benefits (like paid sick days).
The measure, which is the first of its kind at the federal, state and municipal levels, requires employers to use a transparent and nondiscriminatory process to distribute any additional hours to existing employees. However, employers will not be required to offer additional work hours to existing employees if doing so would entitle those employees to overtime pay or some other premium pay rate by law or under a collective bargaining agreement.
An employer is required to comply with the ordinance if it exercises direct or indirect control over employees' wages, hours or working conditions and is either:
- Subject to the San Jose business tax; or
- Operates a business in the city that is exempt from the tax under California law (e.g., banks, insurance companies, certain nonprofits).
Employers with 35 or fewer employees are exempt from the measure's requirements. In calculating the number of employees for coverage purposes, employers must include those who have worked for them for at least two hours or are entitled to be paid the California minimum wage.
Non-franchise chain employers must calculate the total number of employees based on the combined number of employees at every location of the chain. Franchise employers must base their calculation on the total number of employees at every location owned and operated under the franchise. For both of these types of employers, the calculation must include locations both within and outside of San Jose.
The city's Office of Quality Assurance (OQA) has the authority to issue guidelines to encourage employers to create training opportunities for existing employees to qualify them for potential additional work hours.
The OQA is permitted to grant hardship exemptions for up to 12 months to employers that demonstrate that full and timely compliance with the ordinance would be impractical, impossible or futile despite having taken reasonable steps to do so. In addition, the ordinance does not preempt federal laws allowing a waiver of all or any part of the additional work-hours requirement in a collective bargaining agreement.
Notice and Recordkeeping
The OQA is required to issue an annual bulletin regarding the additional work-hours requirement, in various languages, which employers will have to post in their workplaces. Employers will also be required to keep records proving that they met the additional work-hours requirement before hiring a new employee.
Enforcement and Penalties
The OQA is required to establish guidelines for monitoring, investigating and enforcing the additional work-hours requirement. It will also have the authority to issue administrative fines and penalties for noncompliance. Aggrieved employees will be entitled to sue noncompliant employers in civil court. However, to give employers time to comply with the new ordinance, penalties will not be imposed for first-time violations.
The San Jose Registrar of Voters certified the approved ordinance on December 8. The ordinance goes into effect 90 days later, on March 8, 2017.