Employment Law Alert: San Jose Law Requires Offering More Hours to Part-Time Employees Before Hiring

Coverage

The Ordinance applies to private and non-profit employers with 36 or more employees and who are subject to the San Jose Business License Tax or have a place of business in the City of San Jose. Employers with 35 or fewer employees are exempt from the Ordinance. However, chain businesses and franchisees must count the total number of  employees at every location (whether or not located within San Jose) when determining whether they meet the threshold of 36 employees.

The Ordinance provides an exemption where its provisions are expressly waived in a collective bargaining agreement. Also, the Ordinance includes a “hardship exemption” for up to 12 months if the employer can show that it has taken reasonable steps to comply but full and immediate compliance would be “impracticable, impossible, or futile.”

Requirements

The Ordinance requires that, before hiring additional employees, including subcontractors or use of temporary services of staffing agencies, an employer must offer additional hours of work to existing employees. An “employee” under the Ordinance is defined as a person who performs at least two (2) hours of work within a calendar week for the employer within the geographic boundaries of San Jose and is entitled to payment of minimum wage under California law.

The additional hours must be offered to those employees who, in the employer’s good faith and reasonable judgment, have the skills and experience to perform the work. Employers are required to use transparent and nondiscriminatory processes to distribute the hours of work among those employees. The Ordinance clarifies that an employer does not have to offer an employee additional work hours if it would cause the employee to incur overtime or other premium rates under any law or collective bargaining agreement.

Notice & Recordkeeping

Employers must post an Official Notice of employee rights under the Ordinance. In addition, employers must retain the following records for at least four (4) years:

• For new hire of employees or subcontractors, documentation of the offer of additional hours of work to existing employees prior to completing the hire;
• Employee work schedules; and,
• Any other records the Office of Equality Assurance may require that employers maintain to demonstrate compliance.

Enforcement

The Office of Equality Assurance is responsible for administration and enforcement of the Ordinance. The Ordinance provides the Office with authority to issue Administrative Citations and Compliance Orders for violations. The Office and/or complaining employee may also file a civil lawsuit to enforce the Ordinance. Remedies under the Ordinance include award of back wages, civil penalties in the amount of $50 per day to each employee harmed, and attorney’s fees and costs. The Ordinance provides that no fines, fees, or civil penalties will be imposed for an employer’s first violation of the additional hours provision of the Ordinance.

Finally, employers are prohibited from retaliating against an individual for exercising rights under the Ordinance. There is a rebuttable presumption that any adverse action taken against an individual within 90 days of exercising his or her rights is in retaliation for the exercise of such rights.