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(a) Minimum Compensation shall consist of the following:
(1) (A) For Contracts and Contract Amendments with parties other than Nonprofit Corporations or public entities, hourly gross compensation shall be as follows:
(i) Beginning on November 3, 2018 or the effective date of the ordinance in Board File No. 170297, whichever is later, an hourly gross compensation of $17.00.
(ii) In order to prevent inflation from eroding the value of this rate, on July 1, 2019, the the1 hourly gross compensation rate shall increase by an amount corresponding to the prior year’s increase, if any, in the Consumer Price Index. Annually thereafter on July 1, the hourly gross compensation in effect for the prior calendar year shall increase by an amount corresponding to the prior year’s increase, if any, in the Consumer Price Index.
(B) For Contracts and Contract Amendments with Nonprofit Corporations, hourly gross compensation shall be $18.93 as of July 1, 2023, $20.25 as of July 1, 2024, $21.55 as of July 1, 2025, $23.00 as of January 1, 2026, and annually thereafter on July 1, the hourly gross compensation in effect for the prior fiscal year shall increase by an amount corresponding to the prior calendar year’s increase, if any, in the Consumer Price Index. For the purpose of the annual adjustment on July 1, 2026, the gross compensation rate in effect for the prior fiscal year shall be $23.00.
(C) For Contracts and Contract Amendments with public entities, hourly gross compensation shall be $19.25 as of July 1, 2023, $20.25 as of September 1, 2023, $20.75 as of January 1, 2024, $21.50 as of July 1, 2024, $22.00 as of January 1, 2025, $22.50 as of July 1, 2025, $23.00 as of January 1, 2026, $25.00 as of September 1, 2026, $25.50 as of January 1, 2027, and annually thereafter on July 1, the hourly gross compensation rate in effect for the prior fiscal year shall increase by an amount corresponding to the prior calendar year’s increase, if any, in the Consumer Price Index for urban wage earners and clerical workers for the San Francisco-Oakland-Hayward metropolitan statistical area. For the purpose of the annual adjustment on July 1, 2027, the gross compensation rate in effect for the prior fiscal year shall be $25.00..2
(D) The increases in hourly gross compensation, and Consumer Price Index increases, specified in subsections (a)(1)(B)-(C), shall go into effect only if the City appropriates funds for the increases under the fiscal and budgetary provisions of the Charter, and the Controller certifies that such funds are sufficient to pay for the increased hourly gross compensation. If the Controller certifies that the appropriated funds are sufficient to support a proportion of the increased hourly gross compensation rate and Consumer Price Index increase, then the hourly gross compensation rate shall increase by that proportion only.
(E) For Contracts and Contract Amendments covered by Section 111.4 of this Article 111, hourly gross compensation shall be, as of November 3, 2018 or the effective date of the ordinance in Board File No. 170297, whichever is later, $17.00. In order to prevent inflation from eroding the value of this rate, on July 1, 2019, the hourly gross compensation rate shall increase by an amount corresponding to the prior year’s increase, if any, in the Consumer Price Index. Annually thereafter on July 1, the hourly gross compensation in effect for the prior calendar year shall increase by an amount corresponding to the prior year’s increase, if any, in the Consumer Price Index.
(2) Compensated time off (at the compensation rates specified in subsection (a)(1) of this Section 111.3) in an hourly amount that, on an annualized basis for a full-time employee, equals twelve days per year. Such time off shall vest with the Covered Employee at the end of the applicable Pay Period and may be used, for sick leave, vacation or personal necessity. Notwithstanding the foregoing, if a Contractor reasonably determines, in good faith, that the Contractor cannot comply with this requirement for compensated time off, the Contractor shall provide the Covered Employee with a cash equivalent of such compensated time off.
(3) Uncompensated time off in an hourly amount that, on an annualized basis for a full-time employee, equals ten days per year. Such time off shall vest with the Covered Employee at the end of the applicable Pay Period and may be used, at the option of the Covered Employee, for sick leave for the illness of the Covered Employee or such Covered Employee’s spouse, domestic partner, child, parent, sibling, grandparent or grandchild.
(b) By March 1 of each year, the Agency shall make available at its office and on its website the hourly rates required by this Section 111.3.
(c) When preparing proposed budgets and requests for supplemental appropriations for contract services, City departments that regularly enter into agreements for the provision of services by Nonprofit Corporations shall transmit with their proposal a written confirmation that the department has considered in its calculations the costs that the Nonprofit Corporations calculate that they will incur in complying with the Minimum Compensation Ordinance.
(d) Subject to the budgetary and fiscal provisions of the Charter, it shall be the policy of the City to ensure sufficient funding to prevent a reduction in the services to the community provided by Nonprofit Corporations and public entities.
(Added as Administrative Code Sec. 12P.3 by Ord. 216-00, File No. 001272, App. 8/9/2000; Ord. 212-07, File No. 070921, App. 9/14/2007; amended by Ord. 232-18, File No. 170297, App. 10/12/2018, Eff. 11/12/2018; Ord. 266-18, File No. 170538, App. 11/7/2018, Eff. 12/8/2018; Ord. 163-23, File No. 230646, App. 7/28/2023, Eff. 8/28/2023, Retro. 7/1/2023; redesignated by Ord. 221-23, File No. 230835, App. 11/3/2023, Eff. 12/4/2023, Oper. 1/4/2024)
CODIFICATION NOTES
1. So in Ord. 232-18.
2. So in Ord. 163-23.
The requirements of this Article 111 shall apply to a written agreement (including, without limitation, any lease, concession, franchise or easement agreement) for the exclusive use of real property that is owned by the City or of which the City has exclusive use, if such property is under the jurisdiction of the San Francisco Airport Commission and the term of the agreement exceeds twenty-nine days in any calendar year, whether by single or cumulative instruments. If cumulative instruments cause the term of the agreement to exceed twenty-nine days, the agreement in question shall be subject to this Article only on and after the effective date of the instrument which causes the term to exceed twenty-nine days. The requirements of this Article shall also apply to (i) any sublease or other agreement allowing other parties the exclusive right to occupy or use all or any portion of the property covered by the agreement and (ii) any agreement between a tenant or subtenant and any other person or entity to perform services on the airport property. Contractors who have agreements covered by this Section shall comply with the requirements of this Article insofar as they have “Covered Employees.” For purposes of this Section, “Covered Employee” shall mean an employee who performs any work on the property that is the subject of the agreement in a two-week Pay Period, adjusted proportionately if the Pay Period is other than two weeks. Notwithstanding the provisions of this Section, all exemptions and waivers from the requirements of this Article that apply to Contracts shall also apply to agreements for the use of airport property described in this Section, except that the exemption in Section 111.2(e)(16) does not apply to agreements for the use of real property owned by the City or of which the City has exclusive use if the property is under the jurisdiction of the San Francisco Airport Commission. Except as otherwise specifically provided, all requirements of this Article, and the monitoring and enforcement mechanisms provided in this Article, shall apply to agreements covered by this Section.
(Added as Administrative Code Sec. 12P.4 by Ord. 216-00, File No. 001272, App. 8/9/2000; Ord. 212-07, File No. 070921, App. 9/14/2007; amended by Ord. 232-18, File No. 170297, App. 10/12/2018, Eff. 11/12/2018; redesignated by Ord. 221-23, File No. 230835, App. 11/3/2023, Eff. 12/4/2023, Oper. 1/4/2024)
Every Contract or Contract Amendment entered into on or after the Effective Date shall provide as follows:
(a) For each hour worked by a Covered Employee during each Pay Period during the term of the Contract (as such term may be extended from time to time), Contractor shall provide to such Covered Employee no less than the Minimum Compensation as required in this Article.
(b) Failure to comply with the foregoing requirement shall constitute a material breach by Contractor of the terms of the Contract. Such failure shall be determined by the City in its sole discretion.
(c) If, within thirty (30) days after the Contractor receives written notice of such a breach, Contractor fails to cure such breach or, if such breach cannot reasonably be cured within such period of thirty (30) days, Contractor fails to commence efforts to cure within such period, or thereafter fails diligently to pursue such cure to completion, the City shall have the right to pursue any rights or remedies available under the terms of the Contract or under applicable law.
(d) The Contractor shall not discharge, reduce in compensation, or otherwise discriminate against any Employee for complaining to the City with regard to the employer’s compliance or anticipated compliance with this Article, for opposing any practice proscribed by this Article, for participating in proceedings related to this Article, or for seeking to assert or enforce any rights under this Article by any lawful means.
(e) The Contractor represents and warrants that it is not an entity that was set up, or is being used, for the purpose of evading the intent of this Article.
(f) The Contractor shall keep itself informed of the current Minimum Compensation, and shall provide prompt written notice to all Covered Employees of annual adjustments to the Minimum Compensation, as well as any written communications received by the Contractor from
the City, which communications are marked to indicate that they are to be distributed to Covered Employees.
(g) The Contractor shall maintain employee and payroll records in compliance with the California Labor Code and Industrial Welfare Commission orders. Where a Contractor does not maintain or retain such records, or does not allow the Agency reasonable access to such records, it shall be presumed that the Contractor paid no more than the minimum wage required under State law. The Contractor shall have the burden of overcoming the presumption by clear and convincing evidence.
(h) The Contractor shall provide reports to the City in accordance with any reporting standards promulgated by the Agency.
(i) The Contractor shall provide the City with access to pertinent records after receiving a written request to do so and being provided at least five (5) business days to respond.
(j) The Agency may conduct random audits of Contractors. Random audits shall be (1) noticed in advance in writing; (2) limited to ascertaining whether Covered Employees are paid at least the minimum compensation required by this Article; (3) accomplished through an examination of pertinent records at a mutually agreed upon time and location within ten (10) days of the written notice; and (4) limited to one (1) audit per Contractor every two (2) years for the duration of the Contract. Nothing in this Section shall be deemed to interfere with the authority of the Agency to investigate any report of an alleged breach of contract as provided in Section 111.7.
(k) Any Contractor subject to the provisions of this Article shall promptly notify the Contracting Department of any subcontractors performing services covered by this Article and shall certify to the Contracting Department that it has notified the subcontractors of their obligations under this Article.
(Added as Administrative Code Sec. 12P.5 by Ord. 216-00, File No. 001272, App. 8/9/2000; Ord. 212-07, File No. 070921, App. 9/14/2007; redesignated by Ord. 221-23, File No. 230835, App. 11/3/2023, Eff. 12/4/2023, Oper. 1/4/2024)
(a) Failure to comply with the requirements of this Article shall constitute a material breach by contractor of the terms of the contract. The City in its sole discretion shall determine such failure.
(b) If a contractor fails to comply with the requirements of this Article, the City shall have the right to pursue any rights or remedies available under this Article, under the terms of the contract, and under applicable law, consistent with the procedures set forth in Section 111.9.
(c) In order to monitor and determine compliance with this Article, employees and agents of the City authorized to assist in the administration and enforcement of this Article, including employees and agents of the agency, shall have the right to (1) engage in inspections of a contractor’s job sites and conduct interviews with a contractor’s employees and (2) conduct audits of contractors, provided that the City gives notice in advance of such audits and the audits are accomplished through an examination of pertinent records at a mutually agreed upon time and location within ten (10) days of the written notice.
(d) (1) Contractor may not interfere with, restrain, or deny the exercise of, or the attempt to exercise, any right protected under this Article.
(2) Contractor may not discharge, threaten to discharge, demote, suspend, or in any manner discriminate or take adverse action against any person in retaliation for exercising rights protected under this Article. Such rights include, but are not limited to, the right be paid the minimum compensation; the right to use compensated and uncompensated time off pursuant to this Article; the right to file a complaint or inform any person about any alleged violation of this Article; the right to cooperate with the agency in its investigations of alleged violations of this Article; and the right to inform any person of his or her potential rights under this Article.
(3) Contractor may not implement any absence control policy to count compensated or uncompensated leave taken under this Article as an absence that may lead to or result in discipline, discharge, demotion, suspension, or any other adverse action.
(4) The provisions of this subsection (d) apply to any person who mistakenly but in good faith alleges violations of this Article.
(5) If the contractor takes any adverse action against any person within 90 days of the person’s doing any of the following, such adverse action shall raise a rebuttable presumption that the contractor has engaged in retaliation against the person for the exercise of one or more of the rights set forth in this Subsection (d): filing a complaint with the agency or a court alleging a violation of any provision of this Article, informing any person about an employer’s alleged violation of this Article; cooperating with the agency or other persons in the investigation or prosecution of any alleged violation of this Article; opposing any policy, practice, or act that is unlawful under this Article; or informing any person of his or her rights under this Article.
(Added as Administrative Code Sec. 12P.5.1 by Ord. 212-07, File No. 070921, App. 9/14/2007; and by Ord. 226-07, File No. 071193, App. 10/2/2007; redesignated by Ord. 221-23, File No. 230835, App. 11/3/2023, Eff. 12/4/2023, Oper. 1/4/2024)
(a) The Agency shall monitor Contractors for compliance with the requirements of this Article and investigate complaints of violations. The Agency shall promulgate guidelines or rules for the administration of this Article. Such guidelines and rules shall not be adopted finally by the Agency until the Agency has held a public hearing. The guidelines and rules shall establish procedures for monitoring Contractors, receiving and investigating complaints, and determining whether a Contractor has breached a Contract based on the Minimum Compensation requirements of this Article. The guidelines and rules shall also establish procedures permitting Contractors to provide payroll information in confidence to the City for purposes of monitoring compliance under this Article and authorizing disclosure of the information by the City only when necessary for enforcement purposes. Upon the request of a Contracting Department, the Agency shall also issue a determination as to whether a particular instrument constitutes a Contract or agreement is subject to the requirements of this Article. The Agency shall report annually on compliance with this Article to the Board of Supervisors. Such report shall include cumulative information regarding the number of waivers granted by the Agency pursuant to Sections 111.10 and 111.11 of this Article and statistical data regarding such waivers.
(b) If the Agency determines that a Contractor is in breach of any term required to be contained in the Contract under this Article, the Agency shall notify the Contracting Department of its findings and of any action that the Agency requests the Contracting Department to take with respect to such breach. In order to ensure compliance with this Article and to enhance the monitoring activities of the Agency, the City desires to encourage reporting by Covered Employees of any breach. The Agency shall investigate any such report, The Agency shall keep confidential, to the maximum extent permitted by applicable laws, the Covered Employee’s name and other identifying information.
(c) In addition to any other rights or remedies available to the City under the term of the Contract or under applicable law, the City shall have the following rights, in the event of such failure by the Contractor:
(1) The right, at the discretion of the Agency, to charge the Contractor an amount equal to the difference between the Minimum Compensation levels required by this Article and any compensation actually provided to each Covered Employee who was not paid in accordance with the terms of this Article, together with simple annual interest of ten (10) percent on such amount from the date payment was due;
(2) The right, at the discretion of the Agency, to set off all or any portion of the amount described in the preceding clause (1) of this Subsection against amounts due to Contractor under the Contract;
(3) The right, at the discretion of the Contracting Department, to terminate the Contract in whole or in part;
(4) In the event of a breach by Contractor of the covenant referred to in Section 111.5(d), the right, at the discretion of the Agency, to require reinstatement of the affected Covered Employee and, if necessary, seek a court order for such reinstatement or to obtain other appropriate equitable relief and, in addition, to require payment of any wages lost because of the Contractor’s discriminatory or retaliatory action, together with simple annual interest of up to ten (10) percent from the date payment should have been made; and
(5) The right, at the discretion of the Agency or the Contracting Department, to bar a Contractor from entering into future contracts with the City for three (3) years.
(6) The City may bring a civil action against the Contractor to pursue the remedies provided by this Article and other applicable law. The prevailing party shall be entitled to all costs and expenses, including reasonable attorneys’ fees.
Each of these rights shall be exercisable individually or in combination with any other rights or remedies available to the City. Any amounts realized by the City pursuant to this subsection shall be paid to each applicable Covered Employee.
When this Article authorizes the Agency to charge interest, in determining the appropriate amount to charge the Agency shall give due consideration to the size of the Contractor’s business, the Contractor’s good faith, the gravity of the violation, and the history of previous violations.
(d) Each Covered Employee shall be a third-party beneficiary under the Contract as set forth in this subsection and in subsection (e) of this Section, and may pursue the following remedies in the event of a breach by the Contractor of any contractual covenant described in Section 111.5(a) or Section 111.5(d), but only after the Covered Employee has provided the notice and participated in the administrative review hearing provided in this subsection. The Covered Employee shall give written notice of a breach to the Contractor and to the Agency. If the Agency and the Contracting Department determine that no breach has occurred, or if the Contracting Department fails to obtain the cure of a breach by the Contractor within sixty (60) days after receipt of notice by the Covered Employee, the Covered Employee may request an administrative review hearing. The Covered Employee must request such a hearing within ninety (90) days after giving written notice of the breach. Unless the Covered Employee withdraws the request for a hearing, the Agency shall conduct, or arrange to have conducted, a hearing. The Employee shall have the right to attend the hearing personally or through a designated representative. The Agency shall notify the Contractor of the hearing so that the Contractor may attend and present evidence. After the hearing is completed, the person conducting the hearing shall determine whether the Contractor has breached the Contract. Upon the issuance of a written decision finding a breach, and after a waiting period of twenty-one (21) days, the Covered Employee may bring an action against the Contractor for such breach in the Superior Court of the State of California, as appropriate, unless the City has commenced an action against the Contractor based on the breach, or obtained compliance, within the twenty-one-day waiting period and provided notice to the Covered Employee of that action. If the Covered Employee prevails in such action, the Covered Employee may be awarded: (1) an amount equal to the difference between the Minimum Compensation and any compensation actually provided to the Covered Employee, together with simple annual interest of ten (10) percent on such amount from the date payment was due; and (2) in the event of a breach by Contractor of the covenant referred to in Section 111.5(d), the right to seek reinstatement or to obtain other appropriate equitable relief.
(e) In the event of any legal action or proceeding between Contractor and a Covered Employee arising from this Agreement, the unsuccessful party to such action or proceeding shall pay to the prevailing party all costs and expenses, including reasonable attorneys’ fees and disbursements, incurred by such prevailing party in such action or proceeding and in any appeal in connection with such action or proceeding; provided, however, that a Contractor shall be entitled to such costs and expenses only if the court determines that the Covered Employee’s action or proceeding was frivolous, vexatious or otherwise an act of bad faith. If such prevailing party recovers a judgment in any such action, proceeding or appeal, such costs, expenses and attorneys’ fees and disbursements shall be included in and as a part of such judgment.
(f) The City shall maintain the confidentiality of payroll information obtained in the course of monitoring compliance with this Article and shall disclose such information only as necessary for enforcement purposes.
(g) The Agency shall develop a procedure for obtaining an assurance from Contractors when they sign an agreement subject to this Article that they comply with the requirements of this Article, such as the signing of an affidavit of compliance.
(h) The Agency may compromise and settle unlitigated claims that Contractors have violated the requirements of this Article, including Contractors that have agreements for real property as set forth in Section 111.4.
(i) All Contractors and Contracting Departments shall cooperate fully with the Agency in connection with any investigation of an alleged violation of this Article or with any inspection conducted by the Agency.
(Added as Administrative Code Sec. 12P.6 by Ord. 216-00, File No. 001272, App. 8/9/2000; Ord. 212-07, File No. 070921, App. 9/14/2007; redesignated by Ord. 221-23, File No. 230835, App. 11/3/2023, Eff. 12/4/2023, Oper. 1/4/2024)
Every Contract and Contract Amendment entered into on or after the Effective Date of the Amendment shall contain a provision in which the Contractor agrees:
(a) To be liable to the City for liquidated damages as provided in this Section;
(b) To be subject to the procedures governing enforcement of a breach of the terms of a Contract, which terms are required by this Article, as set forth in Section 111.9;
(c) That Contractor’s commitment to pay the Minimum Compensation as required in this Article is a material element of the City’s consideration for the Contract and that the failure of Contractor to comply will cause significant and substantial harm to the City and the public which is extremely difficult to determine or quantify, and that the liquidated damages set forth in this Section are reasonable amounts to pay for the harm caused by the Contractor’s non-compliance;
(d) That for any failure to provide the required Minimum Compensation (hourly wage and time off), the Agency may require the Contractor to pay the City liquidated damages of up to one hundred dollars ($100.00) for each one-week pay period for each employee not provided the required compensation. The Agency shall adjust this amount proportionately for Contractors that use a pay period other than one (1) week;
(e) That for any failure to provide reports to the City or access to pertinent records, or any failure to cooperate with any audit, inspection or investigation conducted by the Agency, the Agency may require the Contractor to pay the City liquidated damages of up to one thousand dollars ($1,000.00);
(f) That while liquidated damages in the maximum amounts set forth in this Section are a reasonable estimate of the harm caused by the Contractor’s non-compliance with contractual provisions required by this Article, the Agency may determine that less than the full amount is warranted depending on the circumstances of each case. The Agency shall give due consideration to the following factors in determining the amount of liquidated damages: the size of the Contractor’s business, the Contractor’s good faith, the gravity of the violation, the history of previous violations, the failure to comply with record-keeping, reporting, anti-retaliation or other non-wage requirements, and the extent to which the imposition of liquidated damages would undermine the purpose of this Article by imposing unreasonable financial burdens on the Contractor, thereby restricting its ability to fulfill its obligations under this Article.
(Added as Administrative Code Sec. 12P.6.1 by Ord. 212-07, File No. 070921, App. 9/14/2007; redesignated by Ord. 221-23, File No. 230835, App. 11/3/2023, Eff. 12/4/2023, Oper. 1/4/2024)
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