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(a) Definitions. The following definitions shall apply to the terms used in this Article VII:
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.
Construction Contract . The construction agreement entered into by the Contracting Party for Covered Construction.
Contracting Party . Any entity or individual, or successor in interest to the rights of any entity or individual, who is (1) the buyer of real property intended for Housing Development under a City-as-seller contract, (2) the landlord under a City-as-tenant lease, or (3) the tenant under a City-as-landlord lease; provided, however, that public entities shall not be considered Contracting Parties.
Contractor . Any person, firm, partnership, owner operator, limited liability company, corporation, joint venture, proprietorship, trust, association, or other entity that directly enters into a Construction Contract to perform Covered Construction work. A Contractor may also be referred to as a "Prime Contractor" or "General Contractor."
Covered Construction . Any project for any erection, construction, renovation, alteration, improvement, demolition, excavation, installation, or repair, including tenant improvements, that meets the following requirements: (1) the real property on which the project is located is within the jurisdictional boundaries of the City; (2) the estimated project cost exceeds the Threshold Amount; and (3) the project is performed on (A) any real property sold to the Contracting Party under a City-as-seller contract for Housing Development; or (B) real property leased by the City as a landlord or leased to the City as a tenant, where the construction is performed before or during the term of the lease in accordance with plans, specifications, or criteria approved by the City.
Housing Development . Any residential or mixed-use project that includes the construction, expansion, or rehabilitation of three or more residential units.
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 a subcontractor to provide construction work on Covered Construction.
Threshold Amount . The Threshold Amount as defined in Section 6.1 of the Administrative Code.
(b) Prevailing Wage and Apprentice Requirements. The City shall include in all real property sales contracts and leases that include or contemplate Covered Construction the requirement that the Contracting Party and each Contractor and Subcontractor performing work on Covered Construction pay prevailing wages and employ Apprentices in accordance with this Section 23.61. Each Contracting Party shall comply with such provisions as if the Covered Construction is a "public work and improvement" under subsection 6.22(e) of this Code and the California Labor Code, and as if the Contractors and Subcontractors are "Contractors" and "subcontractors" under subsection 6.22(e) of this Code.
The following requirements are in addition to any applicable requirements under state and federal law:
(1) Prevailing Wage Rates. Each Contracting Party shall (A) pay, and shall require its Contractors and Subcontractors to pay, all persons performing work on Covered Construction no less than the applicable Prevailing Rate of Wages, and (B) comply with, and require its Contractors and Subcontractors to comply with, the provisions of subsections 6.22(e)(5), (6), (7) and subsection 6.22(f) of this Code. If, under subsection 6.22(e)(6) of this Code, there is no department authorized to award a contract under Chapter 6 of this Code for whom the Contractor or Subcontractor shall maintain weekly certified payroll records for submission, then the Contractor or Subcontractor shall maintain weekly certified payroll records to be submitted to the Office of Labor Standards Enforcement upon request in order to comply with Section 6.22(e)(6) of this Code.
(2) Employment of Apprentices. Each Contracting Party shall require its Contractors and Subcontractors to employ Apprentices in compliance with the requirements of the State Apprenticeship Program as set forth in the California Labor Code, Division 3, Chapter 4 commencing at Section 3070, and Section 1777.5 of the Labor Code, as amended from time to time.
(c) City as Third Party Beneficiary. Each Construction Contract will (1) require the payment of the Prevailing Rate of Wages and employment of Apprentices in all contracts and subcontracts for the Covered Construction, with specific reference to this Section 23.61, (2) name the City and County of San Francisco, affected workers, and employee organizations formally representing affected workers, as third party beneficiaries for the limited purpose of having the right to enforce the prevailing wage and apprenticeship requirements, including the right to file charges and seek penalties against any Contractor or Subcontractor in accordance with this Article VII and (3) require the Contracting Party to reasonably cooperate with the City in any action or proceeding against a Contractor or Subcontractor that fails to pay the Prevailing Rate of Wages or employ Apprentices as required. A Contracting Party that requires the payment of prevailing wages and employment of Apprentices in the Construction Contract and reasonably cooperates with the City in any enforcement action shall not be in breach of the applicable sales contract or lease with the City due to a Contractor's or Subcontractor's failure to pay the Prevailing Rate of Wages or employ Apprentices. So long as the Contracting Party satisfies the requirements of the previous sentence, any enforcement action by the City, through the City's Labor Standards Enforcement Officer or otherwise, shall be directly against the Contractor or Subcontractor that failed to pay prevailing wages or employ Apprentices as required. Nothing in this Section 23.61 shall limit the remedies available to a City department, as set forth in the applicable sales contract or lease, for a Contracting Party's failure to require the payment of the Prevailing Rate of Wages or the employment of Apprentices in a Construction Contract, or for a Contracting Party's failure to reasonably cooperate with the City in any enforcement action as set forth above.
(d) Enforcement. The City's Labor Standards Enforcement Officer shall have the authority to enforce the prevailing wage and apprenticeship requirements against a Contractor or Subcontractor as set forth in this Section 23.61.
(1) Penalty and Forfeiture. Any Contractor or Subcontractor that fails to pay the Prevailing Rate of Wages or fails to employ Apprentices as required under this Section 23.61 shall (A) pay and, in the case of any Subcontractor so failing, the original Contractor and the Subcontractor shall be jointly and severally liable to pay the City back wages due plus penalties in amounts consistent with analogous provisions of the California Labor Code as amended from time to time, including Sections 1775, 1813 and 1777.7, but not less than the sum of $50 for each day or portion thereof for each violation, and (B) be subject to the penalties set forth in Article V of this Chapter 6,1 including debarment.
(2) The Labor Standards Enforcement Officer shall determine whether a contractor or Subcontractor has failed to comply with the prevailing wage and apprenticeship requirements of this Section. If after conducting an investigation, the Labor Standards Enforcement Officer determines that a violation has occurred, the Officer shall issue and serve a Determination of Violation on the Contractor or Subcontractor that sets forth the basis of the determination and orders payment of back wages due plus the penalty sum set forth in subsection 23.61(d)(1). Service of the Determination of Violation shall be made by United States mail and the date of service shall be the date of mailing.
(3) Recourse Procedure. A Contractor and/or a Subcontractor may appeal from a Determination of Violation. The Controller shall adopt and maintain rules and regulations for any appeal under this subsection 23.61(d)(3), which rules shall be consistent with the following parameters:
(A) Any Appeal from a Determination of Violation (referred to in this subsection 23.61(d)(3) as the "Appeal") shall be filed in writing by the Contractor and/or Subcontractor (referred to in this subsection 23.61(d)(3), whether singular or plural, as the ‘'Appellant") within 15 days of the date of service of the Determination of Violation. Appellant shall serve the Appeal on the Controller and the Labor Standards Enforcement Officer. Failure by the contractor or Subcontractor to serve a timely, written Appeal shall constitute concession to the Determination of Violation, and that determination shall be deemed final upon expiration of the 15-day period.
(B) The Office of Labor Standards Enforcement shall promptly afford Appellant an opportunity to meet and confer in good faith regarding possible resolution of the Determination of Violation in advance of further proceedings under this subsection 23.61(d)(3), with the intention that such meeting occur within 30 days of the date the Appeal is filed.
(C) After the expiration of 30 days following the date the Appeal is filed, any party may request in writing, with concurrent notice to all other parties, that the Controller appoint a hearing officer to hear and decide the Appeal. If no party requests appointment of a hearing officer, the Determination of Violation shall be deemed final on the 60th day after the date the Appeal is filed.
(D) Within 15 days of receiving a written request for appointment of a hearing officer under subsection 23.61(d)(3)(C), the Controller shall appoint an impartial hearing officer and immediately notify the enforcing official and Appellant, and their respective counsel or authorized representative if any, of the appointment. The appointed hearing officer shall be an Administrative Law Judge with at least 10 years' experience with the City and not less than two years' experience in labor law, prevailing wage, and/or wage and hour matters, or shall be an attorney with knowledge of and not less than five years' experience in labor law, prevailing wage, and/or wage and hour matters.
(E) The hearing officer shall promptly set a date for a hearing. The hearing must commence within 45 days of the date of the notification of the hearing officer appointment, and conclude within 75 days of such notice. The hearing officer shall conduct a fair and impartial evidentiary hearing in conformance with the time limitations set forth in this subsection 23.61(d)(3) and in the rules and regulations, so as to avoid undue delay in the resolution of any appeal. The hearing officer shall have the discretion to extend the times under this subsection 23.61(d)(3), and any time requirements under the rules and regulations, only upon a showing of good cause.
(F) Appellant has the burden of proving by a preponderance of the evidence that the basis for the Determination of Violation is incorrect, including any back wage and penalty assessments that are at issue in the Appeal.
(G) Within 30 days of the conclusion of the hearing, the hearing officer shall issue a written decision affirming, modifying, or dismissing the Determination of Violation. The decision of the hearing officer shall consist of findings and a determination. The hearing officer's findings and determination shall be the final determination of the City.
(H) Appellant may appeal a final determination under this subsection 23.61(d)(3) 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 amended from time to time.
(4) Remedies for Non-Compliance with Determination of Violation. No later than 30 days after receipt of a Determination of Violation or, in the case of an Appeal, after an adverse final determination by a hearing officer, the Contractor or Subcontractor shall comply with the Determination of Violation by paying the amounts due for back wages and any penalty amount as set forth therein. The Contractor or Subcontractor shall, in addition, be subject to the penalties set forth in Article V of Chapter 6 of this Code, including debarment. If any Contractor or Subcontractor fails to pay the amounts required under this Section 23.61 within the required 30 days, it shall be subject to enforcement actions, including the following:
(A) 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: (i) damages in the amount of back wages and any penalty amounts due to workers for violation of the prevailing wage and/or apprenticeship requirements, which amounts the City shall, on receipt, distribute to workers following the procedures in subsection 23.61(d)(5); and (ii) an award of reasonable attorney's fees and costs;
(B) Each worker entitled to back pay as set forth in the Determination of Violation or, where a hearing officer has decided the matter, as set forth in the decision of the hearing officer, 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: (i) damages in the amount of back wages due to such workers for violation of the prevailing wage and/or penalties due for violation of the apprenticeship requirements; and (ii) an award of reasonable attorney's fees and costs. An employee organization that formally represents a worker or workers entitled to bring a civil action under this subsection 23.61(d)(4)(B) may do so on behalf of the worker or workers, with the same range of possible legal and equitable relief as would be available in an action brought by the worker or workers.
(5) Distribution of Damages. Upon payment of back wages and/or penalties, as provided in the foregoing paragraphs, the City shall distribute the amounts in the following order: (A) the Labor Standards Enforcement Officer shall make reasonable best efforts to distribute back wages withheld to the individual workers identified as not having been paid the proper wage rate; (B) the assessed penalties shall inure to the benefit of the general fund of the City; (C) the Controller shall hold the balance of any back wages in escrow for workers whom the Labor Standards Enforcement Officer, despite his or her reasonable best efforts, cannot locate. In the event back wages are unclaimed for a period of three years, the Controller shall undertake administrative procedures for unclaimed funds in conformance with California Government Code Section 50050 et seq., as may be amended from time to time. This subsection 23.61(d)(5) also shall be applicable to damages obtained as a result of an enforcement action pursuant to subsection 23.61(d)(4), as applicable.
(Added by Ord. 224-15, File No. 150817, App. 12/22/2015, Eff. 1/21/2016, Oper. 4/20/2016)