[Update: The Ordinance was enacted on July 3, 2020.]
In an unprecedented move, on June 23, 2020 the San Francisco Board of Supervisors voted in favor of legislation that requires San Francisco employers with 100 or more employees to “offer a right to reemployment” to certain workers whom the employer laid off due to the COVID-19 pandemic and its resulting shelter-in-place orders. According to the city’s rules, this ordinance goes into immediate effect upon signature by San Francisco Mayor London Breed, which must occur within 10 calendar days of receipt of legislation. Unless reenacted, the ordinance will expire on the sixty-first day after its enactment.
Employees eligible for the “right of reemployment” include those employed for at least 90 days before the notice of a “layoff,” which is defined as a “separation from employment of 10 or more eligible employees due to the emergency” and which occurred “within a 30-day period commencing on or after February 25, 2020” – the day Mayor Breed proclaimed a state of emergency. Additionally, the layoff must have been due to lack of funds or lack of work due to COVID-19 or related shelter-in-place orders. Employers who initiated covered layoffs after February 25, 2020 and subsequently want to replace the same or “substantially similar” positions of eligible laid off workers must first offer the workers an opportunity for reemployment to their former position(s). If multiple workers were laid off in the same job classification, employers should make reemployment offers based on seniority, defined as the earliest date of hire.
The ordinance excludes from coverage employers who work in healthcare operations (as defined by the ordinance), as well as federal, state, and local public agencies.
Other key provisions for employers include:
Notably, the ordinance does not limit employees’ ability to pursue any rights and remedies afforded to them under the law, including but not limited to wrongful termination and discrimination claims.
The ordinance states it is intended to address the City’s 12 percent unemployment rate, public health concerns, and other potential long-term consequences imposed by the pandemic to the City’s economic and financial health. It further states it is intended to “support the reemergence of all non-essential businesses operating in the City . . . [,] provide economic relief directly to the affected employees and their families, . . . strengthen and provide continuity for the communities in which they live . . . . [and] aid in the revitalization of the City’s economy and the greater local economy.” Additionally, workers’ rights organizations have expressed support for the bill, the final version of which also includes amendments supported by the San Francisco Chamber of Commerce.
The ordinance is not without controversy, however. In the days and weeks leading to its passage, the business community in San Francisco voiced strong opposition to the legislation, and in the public comment period, multiple businesses heavily criticized the ordinance on the basis that it “places a significant administrative, bureaucratic and legal burden on businesses during a time when they are struggling to stay open.” Companies admonished the Board to consider the pressures they continue to face in “keeping their staff safe and surviving the adverse economic impact that the pandemic has had on them.” Many letters suggested relieving the burden this law places on businesses by instead requiring health insurers to provide discounts or reduced premiums to impacted workers, making government funds available to workers for COBRA premiums, and/or expanding access or reduced premiums to Healthy SF, a subsidized medical care program, for impacted workers.
Although the suggestions described above were not incorporated into the ordinance, the Board did make some compromises. First, it exempted small businesses. As initially drafted, the ordinance would have applied to employers with 10 or more employees. Second, it removed the requirement that employers maintain the employment relationship for at least 90 days following reemployment.
The final vote in favor of the ordinance was 10-1 among the Board of Supervisors. The ordinance will now go to Mayor Breed’s desk for signature. She has the option to sign it within 10 days, return it unsigned, or veto it (although any veto may be overturned by the Board). Stay tuned for further details.