SEC. 83.13. RECORDS.

(2) To be subject to the procedures governing enforcement of breaches of contracts based on violations of contract provisions required by this Chapter as set forth in this section;

(3) That the contractor's commitment to comply with this Chapter is a material element of the City's consideration for this contract; that the failure of the contractor to comply with the contract provisions required by this Chapter will cause harm to the City and the public which is significant and substantial but extremely difficult to quantify; that the harm to the City includes not only the financial cost of funding public assistance programs but also the insidious but impossible to quantify harm that this community and its families suffer as a result of unemployment; and that the assessment of liquidated damages of up to $5,000.00 for every notice of a new hire for an entry level position improperly withheld by the contractor from the first source hiring process, as determined by the FSHA during its first investigation of a contractor, does not exceed a fair estimate of the financial and other damages that the City suffers as a result of the contractor's failure to comply with its first source referral contractual obligations.

(4) That the continued failure by a contractor to comply with its first source referral contractual obligations will cause further significant and substantial harm to the City and the public, and that a second assessment of liquidated damages of up to $10,000.00 for each entry level position improperly withheld from the FSHA, from the time of the conclusion of the first investigation forward, does not exceed the financial and other damages that the City suffers as a result of the contractor's continued failure to comply with its first source referral contractual obligations;

(5) That in addition to the cost of investigating alleged violations under this Section, the computation of liquidated damages for purposes of this section is based on the following data:

A. The average length of stay on public assistance in San Francisco's County Adult Assistance Program is approximately 41 months at an average monthly grant of $348.00 per month, totaling approximately $14,379.00; and

B. In 2004, the retention rate of adults placed in employment programs funded under the Workforce Investment Act for at least the first six months of employment was 84.4%. Since qualified individuals under the First Source program face far fewer barriers to employment than their counterparts in programs funded by the Workforce Investment Act, it is reasonable to conclude that the average length of employment for an individual whom the First Source Program refers to an employer and who is hired in an entry level position is at least one year;

therefore, liquidated damages that total $5,000.00 for first violations and $10,000.00 for subsequent violations as determined by FSHA constitute a fair, reasonable, and conservative attempt to quantify the harm caused to the City by the failure of a contractor to comply with its first source referral contractual obligations.

(6) That the failure of contractors to comply with this Chapter, except property contractors, may be subject to the debarment and monetary penalties set forth in Sections 6.80 et seq. of the San Francisco Administrative Code, as well as any other remedies available under the contract or at law.

(b) The FSHA shall promulgate appropriate guidelines or rules for the enforcement of this Chapter. Such guidelines or rules may establish procedures for ensuring fair, efficient, and cost-effective implementation of this Chapter, including mechanisms to monitor contractor compliance with the contract provisions required by this Chapter, and for determining whether a contractor has failed to comply with its first source referral contractual obligations.

(c) The FSHA may investigate possible violations of contract provisions required by this Chapter. Where the FSHA, after providing the contractor with the opportunity to respond to the alleged violation, determines that a contractor failed to make available entry level positions to the FSHA for referral of qualified economically disadvantaged individuals, as required by the applicable first source hiring agreement, the FSHA shall provide written notice to the contractor as follows:

(1) The factual basis for the determination;

(2) The corrective action that the contractor must take to remedy the violation;

(3) The amount of liquidated damages that the FSHA has assessed for the contractor's violation of this Chapter;

(4) Notice that the contractor has 15 days to either take the required corrective action, including payment of liquidated damages, or to file an appeal consistent with subsection (5), below;

(5) That the contractor has the right to appeal the FSHA's final determination to the OLSE, including the assessment of liquidated damages and the amount assessed, but that any such appeal must be filed in writing with the OLSE within 15 days of the date of the issuance of FSHA's determination and that a contractor must file an appeal with the OLSE in order to exhaust administrative remedies;

(6) That if the contractor fails to take the required corrective action or file on appeal in writing with the OLSE within 15 days as set forth above, the FSHA's determination shall be the City's final and binding decision which the City may enforce in a court of law, and

(7) That the contractor will be required to comply with the decision within 5 business days of the FSHA's decision becoming final, including payment of liquidated damages, if any, together with simple annual interest of 10% from the date that payment should have been made.

(d) (1) While liquidated damages in the maximum amount set forth in this section are a reasonable estimate of harm to the City caused by the contractor's non-compliance with contract provisions required by this Chapter, the FSHA may determine that less than the full amount is warranted depending on the circumstances of each case. The FSHA shall consider the following factors in determining the amount of liquidated damages, if any, to impose against a contractor who fails to comply with contract provisions required by this Chapter:

(A) The size of the contractor's business;

(B) The contractor's good faith efforts to comply with contract provisions required by this Chapter;

(D) Whether the contractor has a history of violations of contract provisions required by this Chapter;

(E) Whether the contractor has failed to comply with recordkeeping requirements imposed by contract provisions under this Chapter; and

(F) Whether the imposition of liquidated damages would undermine the purpose of this Chapter by imposing unreasonable financial burdens on the contractor, thereby imperiling the contractor's ability to continue complying with contract provisions required by this Chapter.

(e) (1) Within 15 days of receiving an appeal from the FSHA's final determination, the OLSE shall appoint a hearing officer and shall so advise the FSHA and the contractor, and/or their respective counsel or authorized representative.

(2) 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, not including the issuance of a decision, unless all parties agree to an extended period. If a contractor appeals the FSHA's initial determination but fails to attend a hearing set under this subsection, the FSHA's initial determination shall become final.

(3) The FSHA shall have the burden of producing evidence justifying its imposition of liquidated damages under this Chapter, and of the contractor's violation of contract provisions required by this Chapter, and shall have the burden of proving that a violation occurred. The contractor shall have the right to present evidence on its behalf in response to any alleged violation of contract provisions required by this Chapter.

(4) Within 30 days of the conclusion of the hearing, the hearing officer shall issue a written decision affirming, modifying, or vacating the FSHA's determination of whether the contractor violated the first source hiring agreement, of what corrective action that the contractor must take to remedy any violation, and of the amount of liquidated damages to be assessed, if any. The hearing officer's decision shall consist of findings and a determination, which shall be the City's final decision.

(5) The contractor shall comply with the hearing officer's decision within 5 business days of service of the decision. Service shall be made by first class mail to the contractor's address of record. If the hearing officer imposed liquidated damages, the contractor shall pay the liquidated damages within 5 business days of the receipt of the decision. Payment of liquidated damages after that day shall be subject to simple annual interest of 10% from the day that such damages were due.

(6) The contractor may seek review of the hearing officer's decision only by filing in the San Francisco Superior Court a petition for a writ of mandate under California Code of Civil Procedure, section 1094.5, as may be amended from time to time.

(7) When a contractor fails to take corrective action within the time required by the provisions of this section, the City may immediately pursue all available remedies against the contractor for breach of contract, including debarment proceedings where applicable and filing a civil action to recover liquidated damages due under this section.

(8) The failure of the FSHA or OLSE to comply with the time requirements of this Section shall not cause the OLSE or the hearing officer to lose jurisdiction over an appeal from the FSHA's determination filed under this Section.

(f) If the developer fulfills its obligations as set forth in this Chapter, the developer shall not be held responsible for the failure of an employer to comply with the requirements of this Chapter.

(g) Liquidated damages obtained under this Chapter shall be deposited in the general fund.

(Added by Ord. 264-98, App. 8/21/98; Ord. 76-06, File No. 060166, App. 4/20/2006; Ord. 32-09, File No. 081512, App. 3/9/2009)

SEC. 83.11. FIRST SOURCE HIRING REQUIREMENTS FOR PERMITS FOR COMMERCIAL DEVELOPMENT AND RESIDENTIAL PROJECTS.

(a) Developers applying for a Permit as defined in Section 83.4 shall meet with CityBuild, the City's construction training workforce program, prior to submitting an application for a Permit for a development project, and shall provide the estimated number of employees from each trade to be used on the project, including entry and apprentice level, the anticipated wages for those employees, whether or not the developer will pay Prevailing Wage for those employees, and, if known, the estimated number of local residents to be hired. Developers applying for permits as defined in Section 83.4 shall cooperate with the FSHA in establishing first source hiring agreement(s) for the development project. The Planning Commission shall not approve a development project, nor shall any City department issue a permit subject to this Chapter unless the developer or contractor has met with CityBuild to provide the required information and has obtained approval from the FSHA of a first source hiring agreement applicable to the development project or obtained an exemption from the requirements of Chapter 83 pursuant to Section 83.11(d). The FSHA may condition approval of the first source hiring agreement on the City's approval of the development project. In the event the development project approved by the Planning Commission differs substantially from the development project assumed by the FSHA at the time it approved the agreement, the FSHA may approve modifications to the first source hiring agreement if necessary for the agreement to conform to the requirements of this Chapter. Such agreement shall become a condition of the permit, and shall:

(1) Set appropriate hiring and retention goals for entry level positions and, for each trade, set appropriate hiring and retention goals for apprentices enrolled in an apprenticeship program approved by the State of California's Department of Industrial Relations, for all employers engaged in construction work on, and commercial activity(ies) to be conducted in, the development project, including residential services. The developer shall agree to require all such employers to achieve these hiring and retention goals, or, if unable to achieve these goals, to establish good faith efforts as to their attempts to do so, as set forth in the agreement. The agreement shall take into consideration the employer's participation in existing job training, referral and/or brokerage programs. Within the discretion of the FSHA, subject to appropriate modifications, participation in such programs may be certified as meeting the requirements of this Chapter. Failure either to achieve the specified goal, or to establish good faith efforts will constitute noncompliance and will subject the employer to the sanctions provided in Section 83.12 of this Chapter.

(2) Set first source interviewing, recruitment and hiring requirements for all employers engaged in construction work on, and commercial activity(ies) to be conducted in, the development project, including residential services, which will provide the San Francisco Workforce Development System with the first opportunity to provide qualified economically disadvantaged individuals for consideration for employment for entry and apprentice level positions. Employers subject to the agreement shall consider all applications of qualified economically disadvantaged individuals referred by the System for employment; provided however, if the employer utilizes nondiscriminatory screening criteria, the employer shall have the sole discretion to interview and/or hire individuals referred or certified by the San Francisco Workforce Development System as being qualified economically disadvantaged individuals. The duration of the first source interviewing requirement shall be determined by the FSHA and shall be set forth in each agreement but shall not exceed 10 days. During that period, the employer subject to the agreement may publicize the positions in accordance with the agreement. A need for urgent or temporary hires must be evaluated, and appropriate provisions for such a situation must be made in the agreement.

(3) Set appropriate requirements for providing notification of available entry and apprentice level positions to the San Francisco Workforce Development System so that the System may train and refer an adequate pool of qualified economically disadvantaged individuals to employers subject to the agreement. Notification should include such information as employment needs by occupational title, skills, and/or experience required, the hours required, wage scale and duration of employment, identification of entry and apprentice level positions and training positions, identification of English language proficiency requirements, or absence thereof, and the projected schedule and procedures for hiring for each occupation. Employers subject to the agreement should provide both long-term job need projections, and notice before initiating the interviewing and hiring process. These notification requirements will take into consideration any need to protect the employer's proprietary information.

(4) Set appropriate record keeping and monitoring requirements. The First Source Hiring Administration shall develop easy to use forms and record keeping requirements for documenting compliance with the agreement. To the greatest extent possible, these requirements shall utilize the employer's existing record keeping systems, be non-duplicative, and facilitate a coordinated flow of information and referrals.

(5) Establish guidelines for employer good faith efforts to comply with the first source hiring requirements of this Chapter. The FSHA will work with City departments to develop employer good faith effort requirements appropriate to the types of permits handled by each department. Employers shall appoint a liaison for dealing with the development and implementation of the employer's agreement. In the event that the FSHA finds that the employer has taken actions primarily for purpose of circumventing the requirements of this Chapter, that employer shall be subject to the sanctions set forth in Section 83.12 of this Chapter.

(6) Set the term of the requirements.

(7) Set appropriate enforcement and sanctioning standards consistent with this Chapter.

(8) Provide that the agreement shall be recorded.

(9) Set forth the City's obligations to develop training programs, job applicant referrals, technical assistance, and information systems that assist the employer in complying with this Chapter.

(10) Require developer to include notice of the requirements of this Chapter in leases, subleases, and other occupancy contracts.

(b) The employer subject to the agreement shall make the final determination of whether an economically disadvantaged individual referred by the System is "qualified" for the position. Any qualified economically disadvantaged individual who is hired by the employer shall have the same rights and obligations as all other employees in similar positions. The employer shall not discriminate against any employees on the basis of participation in the First Source Hiring Program. Any such discrimination shall be considered a breach of the employer's "good faith" obligations under the agreement, and shall be subject to the sanctions set forth in Section 83.12 of this Chapter.

(c) Compliance by an employer subject to the agreement with a City department's approved plan shall be deemed to be compliance with the requirements of this Chapter. In situations where an employer must comply with the requirements of this Chapter as part of a contract or property contract, and subsequently must apply for permits for the same project that is the subject of the contract or property contract, the employer will be deemed to be in compliance with this Chapter.

(d) In any situation where the FSHA concludes based upon application by the employer that compliance with this Chapter would cause economic hardship or the burden of compliance would be disproportionate to the impacts of the employer's commercial activity(ies) in the City, the FSHA shall grant an exception to any or all of the requirements of this Chapter.

(Added by Ord. 264-98, App. 8/21/98; amended by Ord. 250-04, File No. 041190, App. 10/14/2004; Ord. 76-06, File No. 060166, App. 4/20/2006; Ord. 47-14, File No. 140150, App. 4/18/2014, Eff. 5/18/2014)

SEC. 83.12. VIOLATION OF FIRST SOURCE HIRING REQUIREMENTS IN PERMITS AND IN WORK PERFORMED BY A CITY CONTRACTOR ON NON-CITY PROJECTS IN THE CITY.

(a) (1) The sole financial remedy for violation of the requirements of this Chapter are the penalties set forth below. Additionally, failure to comply with the conditions imposed on a permit may be subject to the provisions of San Francisco Building Code Section 104.2.

(2) Every employer covered by this section shall be subject to the procedures governing enforcement of violations of this Chapter. In addition, the failure of an employer to make entry level positions available to the FSHA for referral of economically disadvantaged individuals, as specified in an employer's first source hiring agreement, shall be subject to a penalty of up to $5,000.00 for every notice of a new hire improperly withheld from the FSHA for this purpose.

(3) In the event that the City is the prevailing party in a civil action to recover a penalty awarded pursuant to this section, the employer will be liable for the City's costs and reasonable attorneys fees.

(b) The FSHA shall promulgate appropriate guidelines or rules for the enforcement of this Chapter. Such guidelines or rules may establish procedures for ensuring fair, efficient, and cost-effective implementation of this Chapter, including mechanisms to monitor employer compliance with this Chapter, and for determining whether an employer has failed to comply with its first source referral contractual obligations.

(c) (1) The FSHA may investigate possible violations of this Chapter. Where the FSHA, after providing an employer with the opportunity to respond to the alleged violation, determines that an employer failed to make available entry level positions to the FSHA for referral of qualified economically disadvantaged individuals, as required by the applicable first source hiring agreement, the FSHA shall provide written notice to the employer as follows:

(A) The factual basis for the determination;

(B) The corrective action that the employer must take to remedy the violation;

(D) Notice that the employer has 15 days to either take the required corrective action, including payment of the penalty, or to file an appeal consistent with subsection (5), below;

(E) That the employer has the right to appeal the FSHA's final determination to the OLSE, including the assessment of a penalty and the amount assessed, but that any such appeal must be filed in writing with the OLSE within 15 days of the date of the issuance of FSHA's determination and that an employer must file an appeal with the OLSE in order to exhaust administrative remedies; and

(F) That if the employer fails to take the required corrective action or file an appeal in writing with the OLSE within 15 days as set forth above, the FSHA's determination shall be the City's final and binding decision which the City may enforce in a court of law, and

(G) That the employer will be required to comply with the decision within 5 business days of the FSHA's decision becoming final, including payment of the penalty, if any, together with simple annual interest of 10% from the date that payment should have been made.

(d) (1) While the maximum amount set forth in this section is a reasonable measure of the harm to the City caused by the employer's non-compliance, the FSHA may determine that less than the full amount is warranted depending on the circumstances of each case. The FSHA shall consider the following factors in determining the amount of the penalty, if any, to impose against an employer who fails to comply with this Chapter:

(A) The size of the employer's business;

(B) The employer's good faith efforts to comply with this Chapter;

(D) Whether or not the employer has a history of violations under this Chapter;

(E) Whether or not the employer has failed to comply with recordkeeping requirements under this Chapter; and

(F) Whether the imposition of a penalty would undermine the purpose of this Chapter by imposing unreasonable financial burdens on the employer, thereby imperiling the employer's ability to continue complying with the obligations of this Chapter.

(e) (1) Within 15 days of receiving an appeal from the FSHA's final determination, the OLSE shall appoint a hearing officer and shall so advise the FSHA and the employer, and/or their respective counsel or authorized representative.

(2) 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, not including the issuance of a decision, unless all parties agree to an extended period. If an employer appeals the FSHA's initial determination but fails to attend a hearing set under this subsection, the FSHA's initial determination shall become final.

(3) The FSHA shall have the burden of producing evidence justifying its imposition of a penalty under this Chapter, and of the employer's violation of the requirements of this Chapter, and shall have the burden of proving that a violation occurred. The employer shall have the right to present evidence on its behalf regarding an alleged violation of this Chapter.

(4) Within 30 days of the conclusion of the hearing, the hearing officer shall issue a written decision affirming, modifying, or vacating the FSHA's determination of whether the employer violated the first source hiring agreement, of what corrective action that the employer must take to remedy any violation, and of the amount of a penalty to be assessed, if any. The hearing officer's decision shall consist of findings and a determination, which shall be the City's final decision.

(5) The employer shall comply with the hearing officer's decision within 5 business days of service of the decision. Service shall be made by first class mail to the employer's address of record. If the hearing officer imposed a penalty, the employer shall pay the penalty within 5 business days of the receipt of the decision. Payment of a penalty after that day shall be subject to simple annual interest of 10% from the day that such penalty was due.

(6) The employer may seek review of the hearing officer's decision only by filing in the San Francisco Superior Court a petition for a writ of mandate under California Code of Civil Procedure, Section 1094.5, as may be amended from time to time.

(7) When an employer fails to take corrective action within the time required by the provisions of this section, the City may immediately pursue all available remedies against the employer, including filing a civil action to recover any penalty due under this section.

(8) The failure of the FSHA or the OLSE to comply with the time requirements of this section shall not cause the OLSE to lose jurisdiction over an appeal from the FSHA's determination filed under this section.

(f) If the developer fulfills its obligations as set forth in this Chapter, the developer shall not be held responsible for the failure of an employer to comply with the requirements of this Chapter.

(g) All penalties obtained under this Chapter shall be deposited in the general fund.

(Added by Ord. 264-98, App. 8/21/98; Ord. 76-06, File No. 060166, App. 4/20/2006)

SEC. 83.13. RECORDS.

The employers subject to provisions of this Chapter shall maintain and provide the FSHA with the records necessary to document compliance with the requirements of this Chapter as determined in the first source agreement.