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This Chapter 82 shall be known as and may be cited as the San Francisco Local Hiring Policy for Construction (“Policy”).
(Former Sec. 82.1 added by Ord. 148-99, File No. 990433, App. 6/2/99; repealed by Ord. 171-03. File No. 030422, App. 7/3/2003)
(a) Recognizing that the construction industry is one of the few industries providing a path to middle-class careers for individuals facing barriers to quality employment, the City has supported local hiring requirements since at least 1994 when the Board of Supervisors passed Ordinance No. 286-94. In 2010, after engaging in extensive fact-finding studies and hearings regarding the benefits of supporting hiring of disadvantaged local residents, the City enacted Ordinance No. 311-10, the Local Hiring Policy for Construction, to create mandatory local hiring requirements for its public work contracts. In the years following, the City extended the Policy to apply to construction projects on City-owned property and on City-owned property sold for Housing Development, as defined in Section 23.61 of the Administrative Code, by enacting Ordinance No. 85-14 and Ordinance No. 224-15, respectively. The City has a proprietary interest in the construction contracts it issues, and also has a proprietary interest in the leases and development agreements that it enters that all allow for construction on City-owned property.
(b) The Policy is necessary to counteract the loss of middle-income jobs and disproportionate concentration of high unemployment in several San Francisco neighborhoods, which face concentrated poverty. San Francisco’s job growth rate and changing job base has had major impacts on patterns of income inequality and disparity in the City, with distinctive, adverse, neighborhood-specific effects. The loss of middle-income jobs has been associated with a diminishing middle class in San Francisco, as indicated by rising income inequality. San Francisco’s unequal income distribution threatens the City’s future competitiveness and overall economic stability, and the City’s anti-poverty strategy aims to ensure that the City and its partners are marshaling limited resources in an effective and coordinated way to create economic opportunities in San Francisco’s low-income communities.
(c) The Policy advances the City’s workforce and community development goals, removing obstacles that may have historically limited the full employment of local residents on the opportunities created by covered projects, curbing unemployment, population decline, and reduction in the number of businesses located in certain neighborhoods in the City. Reports show that the Policy has proven to be a highly effective tool in guaranteeing good-paying jobs for local residents.
(d) The Board of Supervisors desires to ensure that employment and training opportunities created by such projects provide consistent and high-quality opportunities to the San Francisco labor pool, especially low-income residents of San Francisco and other disadvantaged residents. The City has made substantial public investments in its workforce development system to create job opportunities in industries such as construction, which are vital to the economic health of the local economy, are accessible to low- and middle-skilled individuals, have career ladder opportunities where workers can move up with additional training and skill development, and provide access to living wage and family-sustaining jobs. Construction projects subject to the Policy provide a crucial opportunity to connect participants to these workforce development programs and to sustained employment and training opportunities.
(e) The Policy initially established a 20% local hiring requirement, with an annual 5% increase towards a 50% requirement. Since its enactment in 2011, the Board of Supervisors has acted twice to maintain the local hiring requirement at 30% through March 24, 2017, by adopting Resolution No. 80-14 and Resolution No. 74-15, based on recommendations of the Mayor’s Construction Workforce Advisory Committee. In order to sustain the Policy’s goals, again based on recommendations from the Advisory Committee, the Board of Supervisors desires to set the local hiring requirement permanently at 30%. The Board of Supervisors, however, has not changed its intent with regard to the aspirational goal of a 50% requirement, and may increase the local hiring requirement through a legislative amendment in response to future market conditions.
(Former Sec. 82.2 added by Ord. 148-99, File No. 990433, App. 6/2/99; repealed by Ord. 171-03. File No. 030422, App. 7/3/2003)
For purposes of this Chapter 82, the following terms shall have the following meanings:
Apprentice. Any worker who is indentured in a construction apprenticeship program that maintains current registration with the State of California’s Division of Apprenticeship Standards.
Area Median Income, or AMI. Unadjusted median income levels derived from the Department of Housing and Urban Development (HUD) on an annual basis for the San Francisco area, adjusted solely for household size, but not high housing cost area.
Awarding Department. A department or commission empowered on behalf of the City to contract for a Covered Project.
City. The City and County of San Francisco, California.
Contractor. Any person, firm, partnership, owner operator, limited liability company, corporation, joint venture, proprietorship, trust, association, or other entity that contracts directly to perform construction work on a Covered Project. A Contractor may also be referred to as a “Prime Contractor” or “General Contractor.”
Core Employee or Worker. An Apprentice or journey level employee, who possesses any license required by Federal or State law for the Project Work to be performed, of a Contractor or Subcontractor, who appears on that Contractor or Subcontractor’s certified payroll 60 of the previous 100 calendar days prior to date of award of a City contract.
Disadvantaged Worker. A Local Resident who (a) resides in a census tract within the City with a rate of unemployment in excess of 150% of the City unemployment rate, as reported by the State of California Employment Development Department; or (b) at the time of commencing work on a Covered Project has a household income of less than 80% of the AMI, or (c) faces or has overcome at least one of the following barriers to employment: being homeless; being a custodial single parent; receiving public assistance; lacking a GED or high school diploma; participating in a vocational English as a second language program; or having a criminal record or other involvement with the criminal justice system.
Local Hiring Incentives. The incentives set forth in Section 82.5 of this Policy.
Local Hiring Requirements. The requirements set forth in Section 82.6 of this Policy.
Local Resident. An individual who is domiciled, as defined by Section 349(b) of the California Election Code, within the City for at least seven days immediately prior to commencing work on the project.
New Hire. Any employee of a Contractor who is not listed on the Contractor’s quarterly tax statements for the tax period and has been hired prior to the commencement of work.
OEWD. The City’s Office of Economic and Workforce Development.
Policy. The Local Hiring Policy set forth in this Chapter 82 .
Project Work. Construction work performed as part of a Covered Project.
Project Work Hours. The total hours worked on a construction contract by all Apprentices and journey level workers, whether those workers are employed by the Contractor or any Subcontractor.
Public Work or Improvement. A Public Work or Improvement as that term is defined in Section 6.1 of the Administrative Code as amended from time to time.
Subcontractor. Any person, firm, partnership, owner operator, limited liability company, corporation, joint venture, proprietorship, trust, association, or other entity that contracts with a Prime Contractor or another subcontractor to provide services to a Prime Contractor or another subcontractor in fulfillment of the Prime Contractor’s or that other subcontractor’s obligations arising from a contract for construction work on a Covered Project.
Targeted Worker. A Local Resident or Disadvantaged Worker.
(Former Sec. 82.3 added by Ord. 148-99, File No. 990433, App. 6/2/99; repealed by Ord. 171-03. File No. 030422, App. 7/3/2003)
(a) Threshold for Public Work and Improvement Projects. This Policy applies to contracts issued by the City with Prime Contractors for Public Works or Improvements estimated to cost in excess of the Threshold Amount set forth in Section 6.1 of the Administrative Code, as that amount may be amended from time to time.
(b) Threshold for Projects Constructed on Property Owned or Sold by the City.
(1) For purposes of this Chapter 82 only, this Policy applies to
(A) all construction projects on real property owned by the City; and
(B) all construction projects on City-owned real property located within the jurisdictional boundaries of the City and County of San Francisco that is sold to private parties, or their successor in interest, for the purpose of Housing Development, as defined in Section 23.61(a) of the Administrative Code;
provided that, under either subsection 82.4(b)(1)(A) or subsection 82.4(b)(1)(B), the project is estimated to cost in excess of the Threshold Amount set forth in Section 6.1 of the Administrative Code, as that amount may be amended from time to time, including construction contracts that are issued by an entity or individual other than the City.
(2) The following construction projects are exempt from this subsection 82.4(b):
(A) tenant improvement projects estimated to cost less than $750,000 per building permit, where the project is undertaken and contracted for by the tenant;
(B) projects for special events where the special event is three or fewer consecutive or non-consecutive days within a two-week period;
(C) construction projects for which the construction work is fully funded and performed by a donor or donor’s agent as a gift-in-place donation, where the gift agreement does not require City funds to be used for the construction and where the gift agreement includes a requirement that workers be paid the same prevailing rate of wages as would be required for a Public Work project; and
(D) projects that as of July 19, 2014, the effective date of a prior amendment to the Policy, have a term sheet that has been endorsed by the Board of Supervisors and have findings of fiscal feasibility, to the extent that such projects agree to be bound by a legally enforceable document, enforceable by OEWD, committing the project to Local Hire mandatory participation level of 30% per trade. All grant agreements, leases, development agreements, and other contracts that the City enters into that allow for such non-exempt construction projects on property owned by the City must contain a provision that such construction shall comply with this Policy.
(c) Projects Constructed Outside the City. Covered Projects constructed outside the jurisdictional boundaries of the City and County of San Francisco shall be governed by the terms of this Policy, except that percentage requirements shall apply in proportion to the City’s actual cost after reimbursement from non-City sources compared to the total cost of the project, and, unless a reciprocity agreement exists, the “local” requirement shall include San Francisco residents, and workers residing within the San Francisco Public Utilities Commission service territory. If a reciprocity agreement with another local agency exists, the terms of that reciprocity agreement shall govern. Awarding Departments shall work with OEWD and regional local hiring programs to comply.
(d) Projects Utilizing Federal or State Funds.
(1) Segregation of Funds and Contract Awards. Where the application of this Policy would violate Federal or State law, or would be inconsistent with the terms or conditions of a grant or a contract with an agency of the United States or the State of California, the City department or agency receiving the grant or contract shall, where administratively feasible, segregate Federal or State funds from City funds, and/or segregate project administration and contracts, so as to maximize application of this Policy to City-funded construction work.
(2) Alternative Terms in Case of Conflict. Where the provisions of this Policy would be prohibited by Federal or State law, or where the application of this Policy would violate or be inconsistent with the terms or conditions of a grant or a contract with an agency of the United States or the State of California, and where segregation of funds pursuant to subsection 82.4 (d)(1) is not administratively feasible with regard to some or all of the project in question, then OEWD, in consultation with the Awarding Department, shall adapt requirements of this Policy into a set of contract provisions that advance the purposes of this Policy to the maximum extent feasible without conflicting with Federal or State law or with terms or conditions of the State or Federal grant or contract in question. The Awarding Department shall include this set of contract provisions in the contract for the Covered Project with regard to the project or portions of the project for which this Policy would conflict with Federal or State requirements.
(e) Out-of-State Workers. Project Work Hours performed by residents of states other than California shall not be considered in calculation of the number of Project Work Hours to which the Local Hiring Requirements apply. Contractors and Subcontractors shall report to Awarding Departments and OEWD the number of Project Work Hours performed by residents of states other than California.
(Former Sec. 82.4 added by Ord. 148-99, File No. 990433, App. 6/2/99; repealed by Ord. 171-03. File No. 030422, App. 7/3/2003)
(a) For each Covered Project, the following requirements shall apply to each Prime Contractor and Subcontractor that performs Project Work in excess of the Threshold Amount set forth in Section 6.1 of the Administrative Code, as that amount may be amended from time to time, with regard to Project Work actually performed by the Prime Contractor and work included under any subcontract, including all work performed by a Subcontractor and all lower-tier Subcontractors under the subcontract:
(1) The mandatory participation level shall be 30% of all Project Work Hours within each trade performed by Local Residents, with no less than 15% of all Project Work Hours within each trade performed by Disadvantaged Workers.
(2) At least 50% of the Project Work Hours performed by Apprentices within each trade shall be performed by Local Residents, with no less than 25% of Project Work Hours performed by Apprentices within each trade to be performed by Disadvantaged Workers.
(b) Pipeline and Retention Compliance. Contractors and Subcontractors may use one or more of the following pipeline and retention compliance mechanisms to receive a conditional waiver from the Local Hiring Requirements on a project-specific basis:
(1) Specialized Trades. Every two calendar years, OEWD shall publish a list of trades designated as “Specialized Trades,” for which the Local Hiring Requirements of this Policy shall not be applicable. Prior to designating a trade as a Specialized Trade, OEWD shall have made findings that: (A) considering all referral sources and best estimates of workers residing in the City, there will be insufficient numbers of qualified and available Local Residents and Disadvantaged Workers to enable Contractors and Subcontractors to satisfy the Local Hiring Requirements for such trade; and (B) best estimates indicate that on all Covered Projects during those calendar years, in the aggregate, demand for work hours in such trade will not exceed a maximum number of hours as determined by OEWD through the regulatory process set forth in subsection 82.9(a). All Contractors and Subcontractors shall report to OEWD the Project Work Hours utilized in each designated Specialized Trade.
(2) Credit for Hiring on Non-covered Projects. Contractors and Subcontractors may accumulate credit hours for hiring San Francisco Disadvantaged Workers on non-covered projects in the nine-county San Francisco Bay Area and apply those credit hours to contracts for Covered Projects to meet the applicable minimum mandatory hiring requirements set forth above or to work off penalties assessed under subsection 82.8(f). OEWD shall establish criteria for credit hours and their application to meet the minimum participation requirements. OEWD shall consider credit hours to be accumulated for work on non-covered projects performed by San Francisco Disadvantaged Workers only if (A) the San Francisco Disadvantaged Worker performing work on the non-covered project is paid prevailing wages for such work; and, (B) in the case of non-covered projects in the City, the number of hours to be credited for the non-covered project in question exceeds one-half of the number of Disadvantaged Worker hours that would be required if the project were a Covered Project.
(3) Sponsoring Apprentices. A Contractor or Subcontractor may avoid the assessment of penalties under subsection 82.8(f) for failing to meet applicable hiring requirements by demonstrating the high impracticality of complying with the mandatory participation level for a particular contract or classes of employees before project commencement by agreeing to sponsor an OEWD-specified number of new Apprentices in trades in which noncompliance is likely and retaining those Apprentices for the entire period of a Contractor’s or Subcontractor’s work on the project. OEWD will verify with the California Department of Industrial Relations Division of Apprenticeship Standards that the OEWD-specified number of new Apprentices are registered and active Apprentices prior to issuing a release from penalties.
(4) Direct Entry Agreements. OEWD is authorized to negotiate and enter into direct entry agreements with apprenticeship programs that are registered with California Department of Industrial Relations’ Division of Apprenticeship Standards, and, if OEWD is successful in such negotiations, to develop standards and procedures through which Contractors and Subcontractors may avoid assessments of penalties by hiring and retaining Apprentices who enrolled through such direct entry agreements. Such standards and procedures shall allow avoidance of penalty assessments only where OEWD has made a project-specific determination that compliance with Local Hiring Requirements would be impractical for that Contractor or Subcontractor. Direct entry agreements negotiated pursuant to this subsection 82.5(b)(4) shall: (A) be enforceable contracts; (B) require apprenticeship programs to enroll a class of Apprentices no less frequently than every 365 days; (C) specify all admissions standards related to applicants’ training and skills; (D) specify a minimum number of Local Residents and Disadvantaged Workers meeting those standards who shall be admitted in each class of Apprentices; and (E) be on file with and deemed permissible by the Division of Apprenticeship Standards. OEWD’s annual report to the Board of Supervisors as required by subsection 82.9(f) shall include the number of releases from penalties granted based on this subsection 82.5(b)(4), the number of Local Residents enrolled as Apprentices based on direct entry agreements, and the number of direct entry agreements in effect, and shall identify the trades in question.
(Former Sec. 82.5 added by Ord. 148-99, File No. 990433, App. 6/2/99; repealed by Ord. 171-03. File No. 030422, App. 7/3/2003)
(a) Incentive Criteria. Contractors and Subcontractors may receive financial and non-financial incentives for exceeding the Local Hiring Requirements on a Covered Project. Project Work Hours credited under subsection 82.5(b) shall not be the basis for any financial or non-financial incentive payment or entitlement.
(b) Administration. Awarding Departments will work in consultation with OEWD to establish the operation and amounts of the incentives, if any.
(1) Any financial incentives provided on a Covered Project shall comply with applicable law and shall not exceed 1% of the estimated cost of the project. If financial incentives are made available for a Covered Project, Awarding Departments shall pay such incentives, if earned by a Contractor or Subcontractor, only after a Contractor or Subcontractor has completed work on the project and OEWD has approved the Contractor’s or Subcontractor’s request for incentive payment. Subcontractors requesting incentive payments shall submit requests to the Awarding Department and OEWD through the Prime Contractor, not directly to the Awarding Department or OEWD. Payment of Subcontractor incentives shall be paid to the Prime Contractor for the benefit of the appropriate Subcontractor(s). The Prime Contractor must pay Subcontractor(s) within 10 days of receipt of financial incentives from the City.
(2) OEWD shall, by regulation, develop non-financial incentives such as expedited permitting and reduced administrative burden.
(Former Sec. 82.6 added by Ord. 148-99, File No. 990433, App. 6/2/99; repealed by Ord. 171-03. File No. 030422, App. 7/3/2003)
(a) Local Hiring Plan for Large Projects. For Covered Projects estimated to cost more than $1,000,000, the Prime Contractor shall prepare and submit to the Awarding Department and OEWD for approval a local hiring plan for the project. The local hiring plan shall be a written plan for implementation of the requirements of this Policy, including an approximate time frame for hiring decisions of Subcontractors, a description of the hiring processes to be utilized by Subcontractors, an estimate of numbers of Targeted Workers needed from various referral sources, qualifications needed for such Targeted Workers, and a recruitment plan detailing an outreach strategy for candidates representative of local demographics. An Awarding Department shall not issue a Notice to Proceed (NTP) without receiving the local hiring plan. The Awarding Department may issue a NTP upon submittal of the plan, but in no case may any payment be made until such time as it has verified in writing that OEWD has approved the Prime Contractor’s local hiring plan.
(b) Referral Sources. Where a Contractor’s or Subcontractor’s preferred hiring or staffing procedures for a Covered Project do not enable that Contractor or Subcontractor to satisfy the Local Hiring Requirements of this Policy, the Contractor or Subcontractor shall use other procedures to identify and retain Targeted Workers. These procedures shall include requesting workers from CityBuild, San Francisco’s centralized referral program, and considering Targeted Workers who are referred by CityBuild within three business days of the request and who meet the qualifications described in the request. Such consideration shall include in-person interviews. Qualifications described in the request shall be limited to skills directly related to performance of job duties. When a Contractor or Subcontractor has taken these steps and a Local Resident or Disadvantaged Worker is not available, Contractor or Subcontractor may request a conditional waiver as described in subsection 82.5(b).
(c) Hiring Discretion. This Policy does not limit Contractors’ or Subcontractors’ ability to assess qualifications of prospective workers, and to make final hiring and retention decisions. No provision of this Policy shall be interpreted so as to require a Contractor or Subcontractor to employ a worker not qualified for the position in question, or to employ any particular worker.
(d) Subcontractor Compliance. Each Contractor and Subcontractor shall ensure that all Subcontractors agree to comply with applicable requirements of this Policy. All Subcontractors agree as a term of participation on a Covered Project that the City shall have third party beneficiary rights under all contracts under which Subcontractors are performing Project Work. Such third party beneficiary rights shall be limited to the right to enforce the requirements of this Policy directly against the Subcontractors. All Subcontractors on a Covered Project shall be responsible for complying with the recordkeeping and reporting requirements set forth in this Policy. Subcontractors with work in excess of the Threshold Amount shall be responsible for ensuring compliance with the Local Hiring Requirements set forth in Section 82.5 based on Project Work Hours performed under their Subcontracts, including Project Work Hours performed by lower tier Subcontractors with work less than the Threshold Amount.
(Former Sec. 82.7 added by Ord. 148-99, File No. 990433, App. 6/2/99; repealed by Ord. 171-03. File No. 030422, App. 7/3/2003)
(a) Role of OEWD. OEWD is authorized to enforce all terms of this Policy. Awarding Departments shall work cooperatively with OEWD to implement requirements of this Policy, to include the provisions of the Policy in every contract for which inclusion is required, to assist Contractors and Subcontractors in complying with the Policy, and to assist OEWD in furthering the purposes of the Policy through monitoring and enforcement activities. OEWD shall determine the records required to be verified and/or provided by Contractors and Subcontractors to establish workers’ qualifications and status relevant to this Policy.
(b) Role of Community-Based Partners. OEWD shall be authorized to engage its community-based partners in the City’s workforce development system to assist with the recruitment and retention of Targeted Workers. OEWD shall, through the existing Workforce Investment Board, provide a forum for community members, community-based organizations, and representatives of all stakeholders affected by or interested in this Policy to exchange information and ideas and to advise OEWD staff concerning the operation and results of the Policy.
(c) Recordkeeping. Each Contractor and Subcontractor shall keep, or cause to be kept, for a period of four years from the date of substantial completion of Project Work on a Covered Project, certified payroll and basic records, including time cards, tax forms, and superintendent and foreman daily logs, for all workers within each trade performing work on the Covered Project. Such records shall include the name, address and social security number of each worker who worked on the Covered Project, his or her classification, a general description of the work each worker performed each day, the Apprentice or journey-level status of each worker, daily and weekly number of hours worked, the self-identified race, gender, and ethnicity of each worker, whether or not the worker was a Local Resident or Disadvantaged Worker, and the referral source or method through which the Contractor or Subcontractor hired or retained that worker for work on the Covered Project (e.g., core workforce, name call, union hiring hall, City-designated referral source, or recruitment or hiring method). Contractors and Subcontractors may verify that a worker is a Local Resident through the worker’s possession of a valid SF City ID Card or other government-issued identification. OEWD and Awarding Departments may require additional records to be kept with regard to Contractor or Subcontractor compliance with this Policy. All records described in this section shall at all times be open to inspection and examination by the duly authorized officers and agents of the City, including representatives of the Awarding Department and the OEWD.
(d) Reporting. The OEWD shall establish reporting procedures for Contractors and Subcontractors to submit to OEWD and the Awarding Department the records described above, for purposes of monitoring compliance with and effectiveness of this Policy and monitoring operation of the City’s public construction sector for other valid purposes. All records submitted by Contractor or Subcontractor shall be accompanied by a statement of compliance signed by an authorized representative of Contractor or Subcontractor indicating that the records are correct and complete.
(e) Monitoring. From time to time and in its sole discretion, OEWD and/or the Awarding Department may monitor and investigate compliance of Contractor and Subcontractors working on Covered Projects with requirements of this Policy. OEWD and Awarding Departments shall have the right to engage in random inspections of job sites, subject to construction schedule and safety concerns. Each Contractor and Subcontractor shall allow representatives of OEWD and the Awarding Department, in the performance of their duties, to engage in random inspections of job sites and to have access to the employees of the Contractor and Subcontractor and the records required to be kept by this Policy. The OEWD shall establish an administrative procedure for OEWD monitoring of compliance with this Policy and to address allegations of noncompliance. The OEWD shall have sole authority over the administration of this procedure. Except as prohibited by law, OEWD will make data collected under subsections 82.8(c) and (d) of this Policy available on-line to the public in real-time and create a process for members of the public to submit complaints regarding alleged violations of this Policy. The OEWD shall investigate all complaints filed by members of the public; the scope, methods, and conclusions of all such complaint-driven investigations shall be within the discretion of OEWD, with no right of the complaining party to determine the scope or methods of the investigation. All Contractors, Subcontractors, and Awarding Departments shall cooperate fully with OEWD in monitoring and compliance activities. OEWD may interview, either at the worksite or elsewhere, any witness who may have information related to a complaint.
(f) Compliance Procedures.
(1) Consequences of Noncompliance. Awarding Departments and OEWD have the authority to seek for violations of this Policy all of the consequences imposed by or described in this Policy, in the contract for a Covered Project, or by statute, including the authority to assess penalties as described herein, assess damages for other violations of terms of this Policy, and/or seek penalties set forth in Article V of Chapter 6 of the Administrative Code, including debarment.
(2) Penalties Amount. Any Contractor or Subcontractor who fails to satisfy Local Hiring Requirements of this Policy applicable to Project Work Hours performed by Local Residents shall forfeit to the City, and, in the case of any Subcontractor so failing, the Contractor and Subcontractor shall jointly and severally forfeit to the City, an amount equal to the journeyman or Apprentice prevailing wage rate, as applicable, with such wage as established by the Board of Supervisors or the California Department of Industrial Relations under subsection 6.22(e)(3) of the Administrative Code, for the primary trade used by the Contractor or Subcontractor on the Covered Project for each hour by which the Contractor or Subcontractor fell short of the Local Hiring Requirement. The assessment of penalties under this subsection 82.8(f) shall not preclude the City from exercising any other rights or remedies to which it is entitled.
(3) Assessment of Penalties.
(A) For a Covered Project undertaken by a Contractor with the City where the City makes payments directly to the Contractor(s) using City funds, it shall be the duty of the Awarding Department, when certifying to the Controller any payment which may become due under a contract, to deduct from said payment or payments the total amount of penalties due under this subsection 82.8(f). In doing so, the department head must also notify OEWD of his or her action. OEWD may also upon written notice to the Awarding Department, certify to the Controller any forfeiture to deduct from any payment as provided for in this subsection 82.8(f). Certification of forfeitures under this subsection 82.8(f) shall be made only upon an investigation by the Awarding Department or OEWD and upon written notice to the Contractor or Subcontractor identifying the grounds for the forfeiture or forfeitures, and providing the Contractor or Subcontractor with the opportunity to respond according to the procedures prescribed in subsection 82.8(f)(4). The Controller, in issuing any warrant for any such payment, shall deduct from the amount which would otherwise be due on said payment or payments the amount of said forfeiture or forfeitures as so certified. Any retainage to cover contract performance that may become due to Contractor under subsection 6.22(j) of the Administrative Code may be withheld by the City pending a determination by the Awarding Department or OEWD as to whether a Contractor or Subcontractor must pay a penalty or penalties.
(B) For any other Covered Project for which Local Hiring Requirements are required under this Chapter 82, OEWD shall determine whether a Contractor and/or any Subcontractor has failed to comply with the Local Hire Requirement. If after conducting an investigation, OEWD determines that a violation has occurred, it shall issue and serve an assessment of penalties to the Contractor and/or any Subcontractor that sets forth the basis of the assessment and orders payment of penalties in the amounts equal to the journeyman or apprentice prevailing wage rates, as applicable, for the primary trade used by the Contractor or Subcontractor on the Covered Project for each hour by which the Contractor or Subcontractor fell short of the Local Hiring Requirement. Assessment of penalties under this subsection 82.8(f)(3)(B) shall be made only upon an investigation by OEWD and upon written notice to the Contractor or Subcontractor identifying the grounds for the penalty and providing the Contractor or Subcontractor with the opportunity to respond pursuant to the procedures prescribed in subsection 82.8(f)(4).
(C) For Covered Projects under subsection 82.4(b) where the construction contract is issued by an entity or individual other than the City, and that entity or individual includes such requirements in a construction contract for a Covered Project and reasonably cooperates with the City in any enforcement action of such requirements, the entity or individual shall not be in breach of its contract with the City due to the failure of a Contractor or Subcontractor to comply. Provided that the entity or individual who issues the construction contract complies with the provisions in the previous sentence, any enforcement action by the City, through OEWD or otherwise, shall be directly against the Contractor or Subcontractor that failed to apply the Local Hire Requirements. Nothing in this Chapter 82 shall limit the remedies available to a City department, as set forth in the applicable sales contract or lease, for a purchaser’s or tenant’s failure to require compliance with this Chapter 82 in a construction contract for a Covered Project or to reasonably cooperate with the City in any enforcement action as set forth above.
(4) Recourse Procedure. If the Contractor or Subcontractor disagrees with the assessment of penalties as so provided in this subsection 82.8(f), then the following procedure applies:
(A) The Contractor or Subcontractor may request a hearing in writing within 15 days of the date of the final notification of assessment. The request shall be directed to the City Controller. Failure by the Contractor or Subcontractor to submit a timely, written request for a hearing shall constitute concession to the assessment and the forfeiture shall be deemed final upon expiration of the 15-day period. The Contractor or Subcontractor must exhaust this administrative remedy prior to commencing further legal action.
(B) Within 15 days of receiving a proper request, the Controller shall appoint a hearing officer with knowledge and not less than five years’ experience in labor law, and shall so advise the enforcing official and the Contractor or Subcontractor, and/or their respective counsel or authorized representative.
(C) The hearing officer shall promptly set a date for a hearing. The hearing must commence within 45 days of the notification of the appointment of the hearing officer and conclude within 75 days of such notification unless all parties agree to an extended period.
(D) Within 30 days of the conclusion of the hearing, the hearing officer shall issue a written decision affirming, modifying, or dismissing the assessment. The decision of the hearing officer shall consist of findings and a determination. The hearing officer’s findings and determination shall be final.
(E) The Contractor or Subcontractor may appeal a final determination under this Section 82.8 only by filing in the San Francisco Superior Court a petition for a writ of mandate under California Code of Civil Procedure Section 1084 et seq., as applicable and as may be amended from time to time.
(5) Remedies for Non-Compliance with Penalty Assessments. No later than 30 days after receipt of a final assessment of penalties by OEWD or, in the case of an appeal, after an adverse final determination by a hearing officer, the Contractor and/or Subcontractor shall comply with the assessment by paying the amounts due. The Contractor and/or Subcontractor shall, in addition, be subject to the penalties set forth in Article V of Chapter 6, including debarment. If any Contractor and/or Subcontractor fails to pay the amounts required under this subsection 82.8(f)(5) within the required 30 days, the City may bring a civil action in a court of competent jurisdiction against the non-complying party and, upon prevailing, shall be entitled to such legal and equitable relief as may be appropriate to remedy the violation including, without limitation:
(A) damages in the amount of wages due for violation of the Local Hiring Requirement as calculated under subsection 82.8(f)(3), and
(B) an award of reasonable attorney’s fees and costs.
(6) Distribution of Penalties. The Controller shall withhold any penalties assessed as provided in the foregoing subparagraphs until such time as either the Contractor or Subcontractor has conceded to the penalties or, in the event of an objection, there is a determination no longer subject to judicial review. The Controller shall then deposit the amounts withheld into a special account which shall be created for the sole purpose of receiving said funds. The funds deposited into this account shall be used to support the enforcement of this Policy and the further development of workforce development initiatives to train and prepare Local Residents for careers in construction. This subsection 82.8(f)(6) also shall be applicable to damages obtained as a result of an enforcement action pursuant to subsection 82.8(f)(5).
(7) Other Violations; Repeated Violations. Violations of this Policy for which penalties or other remedies are not specified above constitute violations of contract terms, for which the full range of remedies under the contract may be invoked, including but not limited to withholding of progress payments in amounts deemed proportional to the violation. Awarding Departments shall comply with and implement damages claims and other noncompliance consequences assessed or required by OEWD.
(Former Sec. 82.8 added by Ord. 148-99, File No. 990433, App. 6/2/99; repealed by Ord. 171-03. File No. 030422, App. 7/3/2003)
(a) Regulations and Administrative Guidance. OEWD shall be the primary department authorized to implement and enforce this Policy. OEWD shall issue regulations and/or administrative guidance regarding implementation of the Policy, including (1) documentation and recordkeeping requirements, (2) incentive payments, (3) monitoring and compliance activities, (4) project and/or contract coverage determinations, (5) designated referral sources, (6) bid and contract documents implementing the Policy, (7) procedures for application of the Policy to alternative competitive bidding processes set forth in Article IV of Chapter 6 of the Administrative Code, (8) procedures for monitoring and enforcement of the Policy where the construction contract is issued by an entity or individual other than the City, and (9) other matters related to implementation of this Policy. Awarding Departments shall cooperate with and assist in implementation of OEWD actions and determinations regarding this Policy. For projects where the construction contract is issued by an entity or individual other than the City, OEWD may grant conditional waivers on a project specific basis if it finds that the Contractor has participated to the extent feasible in available pipeline and retention mechanisms, the Contractor has undertaken all corrective actions issued by OEWD, and considering all referral sources and estimates of workers residing in the City, there will be insufficient numbers of qualified and available Local Residents and/or Disadvantaged Workers to enable the Contractor or Subcontractor to satisfy the Local Hiring Requirements.
(b) Assistance in Monitoring, Investigations, and Implementation. In accordance with applicable law, the City may enter into one or more contracts for investigative and monitoring services to further the purposes of this Policy, or to assist OEWD or Awarding Departments in developing and implementing systems needed to advance the purposes of this Policy.
(c) Departmental Assistance with Monitoring and Enforcement Costs. Subject to the fiscal and budgetary provisions of the City Charter and applicable Federal and State laws and regulations, OEWD is authorized to receive from Awarding Departments the amount reasonably calculated to pay for the costs, including litigation costs, of monitoring and enforcing requirements of this Policy. OEWD shall supervise the expenditure of all funds appropriated for these purposes.
(d) Effective Date, Operative Date, and Prospective Application. This Policy initially became effective on January 23, 2011 and applied to Covered Projects first advertised for bids by Awarding Departments on or after March 25, 2011. The amendment to the Policy in subsection 82.4(b), enacted in Ordinance No. 85-14, became operative on September 17, 2014. The amendment of subsection 82.4(b) in Ordinance No. 85-14 was intended to have prospective effect only, and shall not be interpreted to impair the obligations of any pre-existing grant agreement, lease, development agreement, or other contract entered into by the City before September 17, 2014. Notwithstanding the prior sentence, the amendment in subsection 82.4(b), enacted in Ordinance No. 85-14, shall apply to newly included work in pre-existing grant agreements, leases, development agreements, or other contracts amended on or after September 17, 2014. The amendment in subsection 82.4(b), enacted in Ordinance No. 85-14, shall apply to grant agreements, leases, development agreements, and other contracts entered into by the City on or after September 17, 2014.
(e) Existing Project Labor Agreements. This Policy shall not apply to project labor agreements entered into by Awarding Departments prior to the effective date of the Policy, January 23, 2011 (“Existing PLAs”). This Policy shall not apply to Public Work or Improvement contracts advertised for bids after March 25, 2011, that are covered by Existing PLAs, where the terms of the Existing PLAs and this Policy are in conflict. Notwithstanding the foregoing sentence, this Policy shall apply to (1) any material amendment to an Existing PLA if that amendment is executed by an Awarding Department on or after January 23, 2011; (2) any new Public Work or Improvement contract over the Threshold Amount set forth in subsection 82.4(a) that is added to the scope of an Existing PLA based on a discretionary decision by the Awarding Department on or after January 23, 2011.
(f) Annual Report To Board of Supervisors. Annually on April 1, the Director of OEWD shall submit a written report to the Board of Supervisors. That report shall document each Awarding Department’s performance under the terms of this Policy, including, among other things, the compliance of each department’s Contractors and Subcontractors with the requirements of this Policy, any significant challenges experienced by OEWD or Awarding Departments in implementing or enforcing this Policy, and proposed remedies to address any such challenges. That report shall include documentation, organized by Awarding Department, of the overall percentage of Project Work Hours on Covered Projects performed by Local Residents, Disadvantaged Workers, Local Resident Apprentices, and residents of states other than California. The report shall also compare the demographics of workers performing work on Covered Projects, using data collected under the Policy, to the demographics of the qualified labor pool. Awarding Departments shall cooperate with requests by OEWD for information needed by the Director to make such reports to the Board.
(g) Material Term; Contractors’ Agreements. All contracts and subcontracts for performance of Project Work shall include compliance with this Policy as a material term, directly enforceable by the City as described herein. As a condition of performance of Project Work, each Contractor and Subcontractor agrees: to comply with all provisions of this Policy; that provisions of this Policy are reasonable and are achievable by the Contractor or Subcontractor, including the reporting requirements and consequences for noncompliance described herein; and that the Contractor or Subcontractor had a full and fair opportunity to review and understand terms of this Policy, in consultation with counsel if so desired.
(h) Severability. If any provision of this Policy or any application thereof to any person or circumstances is held invalid by final judgment of any court of competent jurisdiction, such invalidity shall not affect other provisions or application of this Policy which can be given effect without the invalid provision or application, and to this end the provisions of this Policy are declared to be severable.
(i) Conflicting Agreements. In case of conflict between terms of this Policy and a contractual agreement entered into by a Contractor, Subcontractor, or Awarding Department, terms of this Policy shall govern. Each party to a contract incorporating terms of this Policy agrees through that contract that either it is not a party to such a conflicting agreement, or that it will comply with terms of this Policy as incorporated into the contract, rather than with any conflicting agreements. On or after January 23, 2011, no Awarding Department may enter into a project labor agreement or other contract relating to or applying to the performance of Project Work on a Covered Project that conflicts with or precludes Contractor and Subcontractor compliance with terms of this Policy.
(j) Reciprocity. An Awarding Department or OEWD may negotiate reciprocity agreements with other local jurisdictions that maintain local hiring programs, provided that such agreements advance the policy goals of this Chapter 82 . Any such reciprocity agreement shall allow Targeted Workers residing in each jurisdiction to utilize and benefit from Local Hiring Requirements and referral systems in the other jurisdiction on the same terms as do the workers residing in that jurisdiction. When such a reciprocity agreement is in effect, residents of another jurisdiction may be counted toward satisfaction of the Local Hiring Requirements of this Policy. Any reciprocity agreement negotiated by an Awarding Department or OEWD shall be subject to the approval of the Board of Supervisors by resolution.