Human Resources News & Insights

One to watch: Interesting new HR law to hit the books in San Jose

Here’s an ordinance that HR pros nationwide will want to keep a close eye on. 

Voters in San Jose, CA, just approved a ballot measure that’s unlike anything else in the country to date.

It requires San Jose employers to offer work hours to part-time employees before hiring new employees.

As The Mercury News reported last January, the thinking behind the ordinance is it’ll help more part-time workers qualify for work benefits, which tend to be offered to full-time employees. And, naturally, it’s also meant to help boost take-home pay for many part-timers.

The ordinance is expected to take effect on March 8, 2017, and it’ll apply to all employers conducting business within San Jose’s city limits that have 36 or more employees. The rule will require those businesses to offer additional work hours to qualified existing employees before hiring new employees, subcontractors or temporary workers.

One saving grace for city employers: The work hours do not have to be offered to existing employees if it would require an employee to work overtime or be paid at a premium rate.

Penalties and poster

Under the ordinance, applicable employers must display a poster that employees can see describing the requirements. Employers will also have to create and retain records proving that the hours new hires are scheduled to work were first offered to existing employees — and if not, why.

Some hardship exemptions are available for employers that can show they’ve taken good-faith steps to comply with the ordinance and for those who can prove compliance would be “impracticable, impossible or futile,” according to Alicia J. Farquhar and Michael D. Schlemmer, attorneys for the firm Morgan, Lewis & Bockius LLP, who outlined the ordinance on their firm’s blog.

What will non-compliance cost employers? Nothing for initial violations. But subsequent violations could result in fines of $50 per day per employee, administrative proceedings that could cost up to $2,500 per day per violation and $100,000 for serious violations.

Keep an eye on this

California has a reputation for being the birthplace of HR laws and business regulations that end up making their way to other parts of the country. As a result, employers and HR professionals will want to keep an eye on how this regulation plays out, and how businesses react to it.

No doubt, the record keeping requirements alone will be an administrative burden for employers. The ordinance also runs the risk of making hiring a lot more complicated. Now, San Jose employers will have to ask, “Is there anyone here who could take on this work and hours before we initiate a candidate search?”

The ordinance was approved by 63% of San Jose voters, according to Farquhar and Schlemmer.

Stay tuned.

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  • mikehcm

    Just another example of the ignorance of the California legislators and voters regarding regulating business and free choice.