Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
On July 3, 2020, San Francisco Mayor London Breed (D) returned unsigned1 File Number 200455, an emergency ordinance that took effect immediately and now requires employers with 100 or more employees to provide written notice when layoffs occur, grants reemployment rights for employees impacted by COVID-19-related job separations, and prohibits discrimination against, and requires reasonable accommodations for, employees who experience a family care hardship. San Francisco joins Long Beach and Los Angeles (city and county), which enacted similar, but not identical, ordinances during the COVID-19 public health emergency.
The ordinance contains many unclear standards and many key terms that are undefined. This makes the ordinance susceptible to multiple interpretations and increases the chances of disputes concerning whether and how it applies, creating yet another unexpected compliance challenge during COVID-19.
Effective Date and Duration: The ordinance took effect on July 3, 2020. It will remain in effect for 60 days unless San Francisco reenacts the measure (as it did with the Public Health Emergency Leave Ordinance).
What Constitutes a Layoff: Under the ordinance, a layoff is a separation (termination or end of employment) of 10 or more employees2 during any 30-day period on or after February 25, 2020 that is caused by an employer's lack of funds or work for employees, resulting from the COVID-19 public health emergency (PHE) and any San Francisco shelter-in-place order, including layoffs in conjunction with San Francisco business operations closing or ceasing operations.
Covered Employers and Employees: Generally, the ordinance applies to private employers that, on or after February 25, 2020, employed or employ 100 or more employees as of the earliest date it separated or separates one or more employees, which subsequently resulted or results in a layoff. There is an exception for healthcare operations, which include hospitals, clinics, COVID-19 testing locations, dentists, pharmacies, blood banks and blood drives, pharmaceutical and biotechnology companies, other healthcare facilities, healthcare suppliers, home healthcare service providers, mental health providers, or any related and/or ancillary healthcare services, as well as veterinary care and all healthcare service providers to animals.
Under the ordinance, an eligible worker is a person employed for at least 90 days of the calendar year preceding the date on which the employer gave written notice of a layoff and who was separated due to a layoff. The ordinance does not apply to eligible workers covered by a bona fide collective bargaining agreement that expressly waives the law's requirements in clear and unambiguous terms.
Notice of Layoff: Under the ordinance, employers must provide a notice of a layoff to current eligible workers, former eligible workers, and the city.
For current eligible workers, when employers implement a layoff after the beginning of the COVID-19 PHE (February 25, 2020), at or before the time the layoff becomes effective they must provide all eligible workers written notice of the layoff in a language the eligible worker understands, which must include: 1) Notice of the layoff and its effective date; 2) A summary of the ordinance's reemployment rights; and 3) The phone number for an Office of Economic and Workforce Development (OEWD) hotline. For former employees, within 30 days of July 3, 2020, employers must provide the notice to eligible workers separated due to a layoff that occurred on or after February 25, 2020 and before July 3, 2020. Additionally, employers must provide written notice of a layoff to OEWD within 30 days of the date they initiate a layoff.
However, if the event was unforeseeable, employers must provide written notice within seven days of separation of the tenth employee in a 30-day period as a result of the COVID-19 PHE and any San Francisco shelter-in-place order. The notice must identify: 1) The total number of San Francisco employees affected; 2) Each eligible worker's job classification; 3) Each eligible worker's hire date; and 4) The separation date for each eligible worker.
For at least 2 years from the date written notice of layoff was provided to an eligible worker, employers that initiate a layoff after the beginning of the COVID-19 PHE (February 25, 2020), begins must keep the following records for each eligible worker: 1) Full legal name; 2) Job classification at the time of separation; 3) Hire date; 4) Last known address; 5) Last known email address; 6) Last known telephone number; and 7) A copy of the written notice of layoff.
Offer of Reemployment: Employers that initiate a layoff after the beginning of the COVID-19 PHE (February 25, 2020) and subsequently seek to hire a person must take the following steps:
- If filling the eligible worker's former position, the employer must first offer the eligible worker an opportunity for reemployment before offering it to another person.
- If filling any position substantially similar to the eligible worker's former position that is also located in San Francisco, the employer must first offer the eligible worker an opportunity for reemployment to this position before offering it to another person. Positions that are "substantially similar" include any of the following: 1) A position with comparable job duties, pay, benefits, and working conditions to the eligible worker's position at the time of layoff; 2) Any position in which the eligible worker worked in the 12 months preceding the layoff; and 3) Any position for which the eligible worker would be qualified, including a position that would necessitate training the employer would otherwise make available to a new employee to the position upon hire.
If an employer intends to offer an eligible worker reemployment and separated more than one eligible worker from the same job classification, it must make offers based on seniority, which is based on the earliest hire date.
Employers can, however, withhold an offer under the following circumstances:
- Misconduct: Based on information learned after a layoff, an employer learns the eligible worker engaged in any act of dishonesty, violation of law, policy, or employer rule, or other misconduct during employment.
- Severance Agreement: For eligible workers separated between the beginning of the COVID-19 PHE (February 25, 2020) and July 3, 2020 as part of a layoff, if the parties executed a severance agreement before July 3, 2020 that, in exchange for adequate consideration, the eligible worker agreed to a general release of claims.
- Hired Another Before July 3, 2020: Eligible worker was separated between the beginning of the COVID-19 PHE (February 25, 2020) and July 3, 2020 as part of a layoff, and before July 3, 2020, the employer hired a person for the eligible worker's former position or a substantially similar position.
Employers must make good-faith efforts to notify an eligible worker by phone and email of a reemployment offer. If the employer does not have phone or email contact information or is unable to make contact by those means, it must attempt to make contact by certified mail or courier delivery. If more than one eligible worker exists, employers must transmit offers in the order of seniority.
- By Phone: If an employer has a record of an eligible worker's last known phone number, it must attempt to notify the eligible worker of a reemployment offer at that number. The employer must notify the eligible worker that: 1) It wishes to extend an offer of reemployment; and 2) It seeks the eligible worker's consent to transmit a written offer by email.
- By Email: If an employer has a record of the eligible worker's last known email address, it must attempt to notify the eligible worker of the offer by email. The employer must notify the eligible worker that: 1) It wishes to extend an offer of reemployment; and 2) It seeks the eligible worker's consent to transmit a written offer by email.
Eligible Worker Consent to Offer by Email: An eligible worker must provide written confirmation of consent by text message or email by 5 p.m. PST on the business day immediately following the contact date. The employer must transmit the offer by 5 p.m. PST of the first business day following receipt of consent. If the eligible worker does not give timely consent, the employer must transmit a written offer to the eligible worker's last known address by certified mail or courier delivery, which must remain open for at least two business days following delivery (a courier can deliver the offer without obtaining proof of receipt by the eligible worker).
Acceptance of Offer: The eligible worker must accept the offer in writing by reasonable means an employer identifies, including, without limitation, returning a signed version of an offer letter by any reasonable method of delivery or, if the employer authorizes, by e-signing and transmitting acceptance by email or other reasonable electronic method. If by other means, including but not limited to phone or text message, the eligible worker notifies the employer of their intent to accept, an employer must allow the eligible worker two business days from that date to respond by reasonable written means the employer identifies.
If an eligible worker fails to respond to an offer within the timeframe, the eligible worker has rejected the offer and the employer can offer the position to the next most senior eligible worker or, if there are no alternative eligible workers, then to an alternative job candidate. However, the parties can mutually agree to extend the acceptance period.
Notice to City: Employers must notify OEWD, in writing, of all offers made, acceptances and rejections.
Family Care Hardship (FCH) Non-Discrimination / Reasonable Accommodation: Under the ordinance, an employer cannot discriminate or take adverse action against an eligible worker due to the eligible worker experiencing a family care hardship, i.e., the eligible worker is unable to work due to either: 1) The need to care for a child whose school or place of care has been closed, or whose childcare provider is unavailable, due to the COVID-19 PHE, and no other suitable person is available to provide care during the leave period; or 2) Any reason the San Francisco Paid Sick Leave Ordinance covers to provide care for others. Additionally, eligible workers are entitled to reasonable accommodation of a job duty or requirement if a family care hardship impacts their ability to perform a job duty or satisfy a job requirement.
In response to a reasonable accommodation request, an employer must make good-faith efforts during the period in which the eligible worker experiences a family care hardship to reasonably accommodate the eligible worker, which includes, without limitation, modifying the eligible worker's schedule or the number of work hours, or permitting telework, to the extent operationally feasible. The duty to accommodate ends when the ordinance expires.
Regulation and Enforcement: San Francisco's Office of Labor Standards Enforcement (SF OLSE) can issue regulations implementing the ordinance. Eligible workers may file a lawsuit and, if successful, be awarded: 1) Hiring and reinstatement rights; 2) Back pay for each day of a violation, and front pay for each day a violation continues; 3) The value of benefits they would have received via an employer's benefit plan had the violation not occurred; and 4) Reasonable attorneys' fees and costs.
Next Steps: Given the ordinance's unclear nature, and the fact it took effect immediately, employers should actively monitor SF OLSE's website for guidance and model layoff notices, and consult with knowledgeable employment counsel to determine whether and how the ordinance might apply and to develop procedures to comply with the ordinance as well as related obligations that might exist under the federal and/or state Worker Adjustment and Retraining Notification (WARN) laws.
1 When the Board of Supervisors approves legislation, the mayor can either sign the bill, veto the bill, or return the bill unsigned, which allows the bill to take effect. For all intents and purposes, this has the same effect as the mayor signing the bill: it is deemed enacted.
2 The ordinance does not address whether this threshold includes employees who are not “eligible workers.”