SEC. 121.2. DEFINITIONS.

“Contract” shall mean an agreement between a Contracting Department and any person or entity that provides for public works or public improvements to be purchased, or for services to be performed, at the expense of the City. The term “Contract” also means an agreement between a Tenant or Subtenant and any person or entity to perform services on property covered by a Lease. The term “Contract” includes “Contract Amendment.” Notwithstanding the foregoing, the term “Contract” does not include the following:

(1) Agreements for a duration of less than one (1) year. Contracting Departments and Tenants and Subtenants are prohibited from entering into multiple contracts of short duration with the proposed Contractor in order to evade the requirements of this Article;

(2) Agreements for the purchase or lease of goods, or for guarantees, warranties, shipping, delivery, installation or maintenance of such goods. Where an agreement is for the purchase or lease of both goods and other services, the agreement shall not be deemed a “Contract” if a preponderance of the contract amount is for goods;

(3) Agreements entered into pursuant to settlement of legal proceedings;

(4) Agreements for urgent or specialized advice, consultation or litigation services for the City Attorney’s Office where the City Attorney finds that it would be in the best interests of the City not to include the requirements of this Article;

(5) Agreements with any person or entity if the amount of the agreement is less than $25,000 (in the case of a for-profit entity or person) or less than $50,000 (in the case of a Nonprofit Corporation). However, if the Contracting Party has multiple agreements with the City in a given fiscal year (which agreements would be considered “Contracts” under this Article except that the individual dollar amounts are below the thresholds set forth in the preceding sentence) and the cumulative amount of such agreements is $75,000 or more, the provisions of this Article shall apply to each such agreement from the date on which the triggering Contract is executed;

(6) Agreements for the investment, management or use of trust assets where compliance would violate the fiduciary duties of the trustee;

(7) Agreements executed prior to the Effective Date (unless and until a Contract Amendment is executed);

(8) Agreements executed after the Effective Date (unless and until a Contract Amendment is entered into) pursuant to, and within the scope of, bid packages or requests for proposals advertised and made available to the public prior to the Effective Date, unless the bid packages or requests for proposals are materially amended on or after the Effective Date;

(9) Agreements involving the expenditure by the City of special funds or other non-General Fund revenues to the extent that application of this Article would require the City to use General Fund monies to supplement the special funds or other non-General Fund revenues to maintain the current level of services;

(10) Agreements that require the expenditure of grant funds awarded to the City by another entity. If a Contract is funded both by grant funds and non-grant funds, the entire Contract is exempt; provided that, if the use of the grant funds is severable from the non-grant funds, the Contract is exempt only with respect to the use of the grant funds;

(11) Agreements pursuant to which the City awards a grant to a Nonprofit Corporation;

(12) Agreements with a public entity, unless the public entity is the San Francisco Redevelopment Agency, the San Francisco LAFCO, the San Francisco Transportation Authority, the San Francisco Parking Authority or the San Francisco Health Authority;

(13) Agreements for employee benefits to be provided to City employees, where the Director of Human Resources finds that no person or entity is willing to comply with this Article and is capable of providing the required employee benefits;

(14) Agreements for the investment, management or use of City monies where the Treasurer finds that requiring compliance with this Article will violate the Treasurer’s fiduciary duties and for the investment of retirement, health or other funds held in trust pursuant to Charter, statute, ordinance or MOU where the official or officials responsible for investing or managing such funds find that requiring compliance with this Article will violate their fiduciary duties;

(15) Loan agreements and agreements made in connection with loans or grants under which the City, as creditor or grantor, is providing funds to be used by the debtor or grantee to

(A) Acquire an interest in real property on which residential improvements for low- or moderate-income households will be constructed;

(B) Construct improvements owned or leased by the debtor or grantee, on condition that residents of the improvements qualify as low- or moderate-income households; or

(16) Agreements between a Tenant or Subtenant and a Contractor to perform services on property covered by a Lease if the Contractor does not provide such services on a regular and on-going basis. For purposes of this exemption, if employees of the Contractor I and any Subcontractors cumulatively work on the Lease property less than 130 days within a 12-month period, the agreement shall not be considered regular and on-going.

“Contract Amendment” shall mean a modification to an agreement which extends the term, increases the total amount of payments due from the City (except where such increase is due solely to cost of living adjustments), or modifies the scope of services to be performed by the Contractor; provided that the resulting agreement falls within the definition of “Contract.” Notwithstanding the foregoing, “Contract Amendment” does not include a onetime extension of the term of a Contract for up to 6 months, or a construction change order, modification or amendment to a Contract executed by the City for its benefit (as determined by the Agency Director).

“Contracting Department” shall mean the City department, office, board, commission or other City agency that enters into the applicable Contract or Lease on behalf of the City.

“Contracting Parties” shall mean Contractors, Subcontractors, Tenants, Subtenants, and employers of San Francisco Airport Service Employees.

“Contractor” shall mean the person or entity that enters into a Contract with the City. The term “Contractor” also means any person or entity that enters into a Contract with a Tenant or Subtenant to perform services on property covered by a Lease.

“Covered Employee” shall mean:

(1) An Employee of a Contractor or Subcontractor who works on a City Contract or Subcontract for 20 hours or more per Week in the United States; and

(2) An Employee of a Tenant or Subtenant who works 20 hours or more per Week on property that is covered by a Lease or Sublease; and

(3) An Employee of a Contractor or Subcontractor that has a Contract or Subcontract to perform services on property covered by a Lease or Sublease if the Employee works 20 hours or more per Week on the property; and

(4) A San Francisco Airport Service Employee who works any number of hours during any Week in such capacity.

A Contractor or Subcontractor may not divide an employee’s time between working on a City contract and working on other duties with the intent of reducing the number of Covered Employees working on the Contract to evade compliance with this Article 121. Such action shall constitute a violation of this Article.

Notwithstanding the foregoing, the term “Covered Employee” does not include the following:

(1) Any Employee (A) under the age of eighteen (18) who is a student, provided that the Employee does not replace, displace or lower the wage or benefits of any existing position or Employee, or (B) who is (i) a temporary Employee hired for a time-limited period, and (ii) for that period is receiving academic credit or completing mandatory hours for professional licensure or certification, and (iii) the Employee does not replace, displace or lower the wage or benefits of an existing position or Employee; or

(2) Any Employee employed as a trainee in a bona fide training program consistent with Federal law, which training program enables the Employee to advance into a permanent position, provided that the Employee does not replace, displace or lower the wage or benefits of any existing position or Employee; or

(3) Any Employee that the Contracting Party is required to pay no less than the “prevailing rate of wage” in accordance with Section A7.204 of Appendix A to the City’s Charter or any provision of the San Francisco Administrative Code and Labor and Employment Code; or

(4) Any disabled Employee who:

(A) Is covered by a current sub-minimum wage certificate issued to the employer by the U.S. Department of Labor; or

(B) Would be covered by such a certificate but for the fact that the employer is paying a wage equal to or higher than the minimum wage.

(5) Any Employee of a Nonprofit Corporation who is a temporary employee, hired on an hourly or per diem basis to replace a regular employee during a temporary absence from the workplace.

“Effective Date” shall mean the applicable effective date specified in Section 121.9 1 of this Article.

“Employee” shall mean any person who is employed by a Contracting Party, including part-time and temporary employees.

“Health Director” shall mean the Director of the Department of Public Health.

“Lease” shall mean a written agreement (including, without limitation, any lease, concession or license) in which the City gives to another party the exclusive use of City Property for a term exceeding twenty-nine (29) consecutive days in any calendar year, whether by single or cumulative instruments. “City Property” means real property that is owned by the City or of which the City has exclusive use, if such property is located within the City or is under the jurisdiction of the San Francisco Airport Commission. If cumulative instruments cause the term of the agreement to exceed twenty-nine (29) consecutive 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 (29) consecutive days. For the purposes of this definition and the definition of Sublease, “exclusive use” means the right to use or occupy real property to the exclusion of others, subject to the rights reserved by the party granting such exclusive use. “Lease” includes “Lease Amendment.” Notwithstanding the foregoing, the term “Lease” does not include the following:

(1) Agreements granting a franchise or easement;

(2) Agreements with a public entity, unless the public entity is the San Francisco Redevelopment Agency, the San Francisco LAFCO, the San Francisco Transportation Authority, the San Francisco Parking Authority or the San Francisco Health Authority;

(3) Agreements entered into pursuant to settlement of legal proceedings;

(4) Revocable at-will use or encroachment permits for the use of or encroachment on City Property, regardless of the ultimate duration of such permits;

(5) Street excavation, street construction or street use permits or other regulatory permits;

(6) Agreements for the use of a City right-of-way, including circumstances where a contracting utility has the power of eminent domain;

(7) Agreements governing the use of City Property under the jurisdiction of the Recreation and Park Department primarily for recreational activities.

“Lease Amendment” shall mean a modification to a Lease that extends the term or materially changes any other provision of the Lease. Notwithstanding the foregoing, “Lease Amendment” does not include a one-time extension of the term of a Lease for up to 6 months, or relocation of the leased premises at the request of the City for its benefit or convenience (as determined by the Agency Director).

“Nonprofit Corporation” shall mean a nonprofit corporation, duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and (if a foreign corporation) in good standing under the laws of the State of California, which corporation has established and maintains valid nonprofit status under Section 501(c)(3) of the United States Internal Revenue Code of 1986, as amended, and all rules and regulations promulgated under such Section.

“San Francisco Airport Service Employees” shall mean Employees who are covered employees under the Quality Standards Program adopted by the San Francisco Airport Commission, as may be amended from time to time.

“Subcontract” shall mean an agreement between a Contractor and a person or entity pursuant to which the person or entity agrees to perform all or a portion of the services covered by a Contract. Notwithstanding the foregoing, the term “Subcontract” does not include:

(1) Agreements for the purchase or lease of goods, or for guarantees, warranties, shipping, delivery, installation or maintenance of such goods. When an agreement is for the purchase or lease of both goods and other services, the agreement shall not be deemed a “Subcontract” if a preponderance of the Contract amount is for goods;

“Subcontractor” shall mean a person or entity that enters into a Subcontract.

“Sublease” shall mean any agreement with any person or entity for the exclusive right to occupy or use all or any portion of City Property covered by a Lease. Notwithstanding the foregoing, the term “Sublease” does not include each of the circumstances set forth in Section 121.2 that constitutes an exclusion from the definition of “Lease.”

“Subtenant” shall mean a person or entity that enters into a Sublease.

“Tenant” shall mean the person or entity that enters into a Lease with the City.

“Week” shall mean a consecutive seven-day period. If the Contracting Party’s regular pay period is other than a seven-day period, the number of hours worked by an employee during a seven-day Week for purposes of this Article 121 shall be calculated by adjusting the number of hours actually worked during the Contracting Party’s regular pay period to determine the average over a seven-day Week. However, such period of averaging shall not exceed a duration of one month.

(Added as Administrative Code Secs. 12Q.2 – 12Q.2.22 by Ord. 116-01, File No. 010848, App. 5/31/2001; amended by Ord. 49-06, File No. 051908, App. 3/24/2006; Ord. 69-09, File No. 090130, App. 5/1/2009; Ord. 235-20, File No. 201133, App. 11/20/2020, Eff. 12/21/2020, Oper. 3/21/2021; redesignated by Ord. 221-23, File No. 230835, App. 11/3/2023, Eff. 12/4/2023, Oper. 1/4/2024)

CODIFICATION NOTE

1. So in Ord. 49-06.

Editor’s Notes:

As part of its redesignation of Administrative Code Chapter 12Q to Labor and Employment Code Article 121, Ord. 221-23 consolidated former Administrative Code Sections 12Q.2 – 12Q.2.22 into a single section, Section 121.2 above. Previously, the chapter (now article) definitions had been codified under separate section numbers.

For the purpose of retaining the legislative histories of the now superseded Chapter 12Q definition provisions, the terms formerly defined in Administrative Code Sections 12Q.2 – 12Q.2.22 are set out below, along with their history notes as they existed immediately prior to the effectiveness of Ord. 221-23.

SEC. 12Q.2. DEFINITIONS.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001; amended by Ord. 235-20, File No. 201133, App. 11/20/2020, Eff. 12/21/2020, Oper. 3/21/2021)

SEC. 12Q.2.1. AGENCY.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001; Ord. 49-06, File No. 051908, App. 3/24/2006)

SEC. 12Q.2.2. AGENCY DIRECTOR.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001; Ord. 49-06, File No. 051908, App. 3/24/2006)

SEC. 12Q.2.3. CITY.