Alert: New Minimum Wage Law Enacted for San Francisco Workers

November 10, 2003

The voters of San Francisco have passed Proposition L, which increases the minimum wage for employees working within the City and County of San Francisco to $8.50 per hour for most workers beginning January 1, 2004.   In every subsequent year, the minimum wage will increase at the same rate as any increase in the Consumer Price Index for urban wage earners and clerical workers in the Bay Area.  The law will be "phased in" for employees working for non-profits or for businesses employing less than ten full-time, part-time, or temporary workers.  For those employers, the minimum wage will increase to $7.75 for one year beginning January 1, 2005, and thereafter will be the same as the general San Francisco minimum wage applying to all other employers. 

The law will be enforced by the Living Wage/Living Health Division of the Office of Contract Administration, which is authorized to order payment to aggrieved employees of back wages and a penalty equal to $50 per day of underpayment, in addition to a penalty of up to $50 per day paid to the city.  Alternatively, workers may bring civil actions to enforce the law, and will be entitled to payment of their attorneys fees if successful.  The measure also contains a number of provisions regarding the posting of the minimum wage laws and protection from retaliation for any worker exercising rights under the new law.   

Importantly, the law is intended to apply to any hours employees work within the City or County of San Francisco, as long as they perform as least two hours within the city or county during any particular week.  As such, the law will apply to employers who are based outside San Francisco, but whose employees perform work within the city.  Due to the extra-territorial nature of the law, it is anticipated that business groups may challenge the legality of the measure in court.

For more information on the new wage law or any other employment law issues, please contact Holly L. Sutton at 415.954.4476, or at hsutton@fbm.com.