San Francisco recently adopted the “Family Friendly Workplace Ordinance,” which prohibits caregiver discrimination and gives employees a right to request “flexible” or “predictable working arrangements” to assist employees with caregiving responsibilities for children, family members with serious health conditions, or parents 65 years or older.¹  The ordinance goes into effect on January 1, 2014, and applies to all employees in the City and County of San Francisco who work for employers with 20 or more employees in the city.²  The ordinance applies to employees who have worked for a covered employer for at least six months and regularly work at least eight hours per week.  The ordinance is based on federal legislation rejected three times by Congress, and a similar statute adopted by Vermont.

The ordinance defines a “flexible working arrangement” as a work arrangement that assists employees with caregiving responsibilities, and includes changes in start and end times, a reduction in the number of hours an employee is required to work, job-sharing, working from home, telecommuting, changes in work duties or part-year employment.  A “predictable working arrangement” is defined as changes in terms and conditions of employment that give employees scheduling predictability to assist employees with caregiving responsibilities.  The ordinance allows employees to request changes in the number of hours they work, the times they work, where they work, and their work assignments.

Employees may make requests for flexible or predictable working arrangements twice every 12 months.  However, if the employee experiences a major life event, such as the birth, adoption or placement of a child, or an increase in the employee’s caregiving duties for a family member with a serious health condition, the employee may make an additional request in the same 12-month period.   

The ordinance sets out detailed procedures for the processing of requests.  The employee must submit a written request.  Within 21 days after receiving the written request, the employer must meet with the employee, consider, and respond to the request.³  The employer must either grant or deny the request in writing.  If the employer denies the request, the employer must (1) explain the bona fide reason for the denial, (2) notify the employee of his or her right to request reconsideration, and (3) provide a copy of the ordinance provision on the process to request reconsideration.⁴  A bona fide reason includes the “identifiable” cost of the proposed change, the detrimental effect on the ability to meet customer or client demands, an inability to organize work among other employees, and the insufficiency of work to be performed at the proposed work time.  Either the employee or the employer may revoke an agreed-upon arrangement on 14 days’ written notice.  If either party revokes, the employee may submit a new request.  If the employer revokes, the employee’s new request is in addition to the two requests permitted per 12-month period. 

Nothing in the ordinance creates a right to be paid when the employer does not have sufficient work for the employee.   

The ordinance prohibits employers from implementing an adverse employment action based on an employee’s caregiver status, or in retaliation for an employee exercising any rights protected by the ordinance, and also prohibits interference with any right protected by the ordinance.  The rights protected include, the right to make a request, the right to request reconsideration, the right to complain about a violation, the right to inform others of a violation or of rights under the ordinance, the right to assist in investigations of alleged violations and the right to oppose policies, practices or acts that are unlawful.

The Office of Labor Standards Enforcement (OLSE) will enforce the ordinance, and for the first 12 months, will issue warnings and notices to correct.  After 12 months, the OLSE may impose administrative penalties of up for $50.00 per day that the violation occurred, payable to the employee.  If prompt corrective action is not taken, the OLSE may file suit for reinstatement, back pay, payment of benefits or pay unlawfully withheld, injunctive relief, liquidated damages of $50.00 per employee/per day, and attorneys’ fees and costs, payable to the city.   Lest employers not take the OLSE administrative enforcement proceedings seriously, the ordinance cuts off the employer’s remedies to complain about administrative actions, if the employer has not fully appealed the OLSE’s determinations through the administrative process described in the ordinance.  Notably, the remedies provided by the ordinance are cumulative to any other legal remedies that might be available against the employer.

The ordinance grants rule-making authority to the OLSE to adopt regulations and issue guidelines to implement the ordinance.  The ordinance also compels the creation of an outreach program to educate employees and employers.

Important Implications

1. Although the ordinance does not provide employees with a private right of action, it is likely to serve as a fertile source for new claims of wrongful termination in violation of public policy.
2. The ordinance is written as if there are no other leave laws, so the employer must determine how flexible and predictable work arrangements will operate in conjunction with the Family and Medical Leave Act (FMLA), the California Family Rights Act (CFRA), and the California Pregnancy Discrimination Act.  The ordinance contemplates changes in working conditions that are broader than those considered under the leave laws or the Americans with Disabilities Act (ADA).  Also, unlike FMLA and CFRA, the ordinance does not cap the duration of flexible or predictable work arrangements.  Employees may exercise the rights of request and reconsideration repeatedly and for indefinite periods.  Employers should require employees to exhaust FMLA and CFRA leave during these arrangements, where available and appropriate.
3. The ordinance is likely to create enforcement actions for tardy or inadequate responses to requests for flexible or predictable work arrangements, and force employers to defend their determination that there is a bona fide business reason for denying a request.
4. Some requests could affect exempt status.  For instance, if a full-time exempt employee requests to work reduced hours, granting the request and reducing the employee’s pay on a prorated basis could destroy the employee’s exempt status because most common exemptions require the employee to be paid on a salaried basis. 
5. One of the bona fide reasons for rejecting an employee’s request is the cost of the proposed change.  The ordinance defines this as “the identifiable cost of the change in a term or condition of employment requested in the application, including but not limited to the cost of productivity loss, retraining or hiring employees, or transferring employees from one facility to another.”   This suggests that to reject a request on the basis of cost, an employer must conduct a sufficient investigation to be able to show identifiable costs associated with the proposed change.  For instance, to claim productivity loss, the employer must determine the productivity loss in a dollar amount.
6. The ordinance applies to employers who exercise control over employees in the city through temporary services or staffing agencies.  Thus, employers may not realize they are covered unless they do an analysis of whether they would be considered an employer of agency workers under the ordinance. 
7. The ordinance is the result of political efforts to implement greater protections for women, who are statistically more likely to be caregivers and to experience employment discrimination based on their caregiver status.  If successful, it is likely to influence legislation in other cities and the State of California as a whole.

Practical Steps for Employers

1. Employers must post a notice informing employees of their rights under the ordinance.  The notice must be posted in a conspicuous place at any workplace or job site where any employee works, and posted in English, Spanish, Chinese, and any language spoken by at least five percent of the employees at the workplace or job site.  The notice is not yet available, but it will be developed by the OLSE.
2.  Employers should train Human Resources personnel, managers, and supervisors on the ordinance, and the requirements for responding to requests.  Employers should develop internal protocols to ensure requests are processed and addressed within the required time limits, and that denials are based on a legitimate reason, and include the proper notice about reconsideration.
3. Employers should revise their handbooks to include the ordinance provisions, and make clear how arrangements will be integrated with rights of employees under leave laws and California Paid Family Leave.
4. Employers must maintain documents concerning requests and responses for three years, and allow the OLSE access to these records.  Under the ordinance, employers may require verification of caregiving responsibilities.  However, these verifications will likely include medical information, so employers must be careful to comply with laws protecting the confidentiality of medical information.  These include the Health Insurance Portability and Accountability Act of 1996 (HIPAA), which protects personal health information, the ADA, which restricts the medical information that may be requested and where it is stored, and the Genetic Information Nondiscrimination Act (GINA), which limits the employer’s ability to request family medical history information.  The CFRA and the California Pregnancy Disability Act also restrict the ability to request information.  As these laws supersede a city ordinance, employers must make sure that any request for verification does not violate these other statutes.

Margaret Hart Edwards is a Shareholder, and Jessica Rothenberg is an Associate, in Littler Mendelson's San Francisco office.  If you would like further information, please contact your Littler attorney at 1.888.Littler or info@littler.com, Ms. Hart Edwards at mhedwards@littler.com, or Ms. Rothenberg at jrothenberg@littler.com.