Voters in Oakland, California recently approved ballot "Measure Z," titled the "Oakland Minimum Wage Charter Amendment."  The measure imposes new minimum wages and employment standards for some hotel workers, authorizes the City to administratively enforce its employment standards through investigations and penalties, and will create a Department of Workplace and Employment Standards (DWES) to carry out such enforcement activities.

This development can be seen as part of a trend that is increasingly impacting many employers in California and across the United States – local cities getting into the business of regulating various aspects of the employment relationships.  We call this the “municipalizaiton” of employment law. 

Measure Z reached the ballot through a successful initiative campaign led and funded by labor unions and employee activist organizations.  Proponents emphasized the plight of hotel workers, with anecdotal evidence of inadequate wages, hard work, and sexual harassment.  The largest donor to the "Yes" campaign adopted the title "Yes on Measure Z Committee for Fair Workplaces & Ending Sexual Assault on the Job."  The results show the electorate found these efforts persuasive.  Of the 141,168 votes cast, 106,966 were in favor of the measure.

The measure might, however, do both less and more than its proponents led voters to believe.  The portions of the measure aimed at protecting hotel workers will apply only to hotels with 50 or more guest rooms.  The administrative enforcement portions of the measure apply to all City employment standards, such as previously-adopted sick leave and minimum wage standards that took effect on March 2, 2015.  The measure gives the City and DWES the authority to pass additional regulations "having the force of law."  The least advertised (but by no means least intended) feature of the measure is to give labor unions the ability to sue employers directly for violations of any city employment standard.

Hotels and Hotel Workers

Covered Employers and Employees

The hotel-specific portions of the measure apply only to "Hotels," "Hotel Employers," and "Hotel Employees" as those terms are specifically defined in Chapter 5.93 of the Oakland Municipal Code. 

The term "Hotels" includes hotels containing 50 or more guest rooms or suites of rooms.  The ordinance applies also to: 1) any contracted, leased, or sublet premises, "connected to or operated in conjunction with" a Hotel; and 2) anyone "providing services at" a Hotel.  This definition covers types of business one would not normally consider a hotel, such as a restaurant leasing space within a hotel.

The term "Hotel Employers" includes anyone who operates a business falling within the definition of the term Hotel.

The term "Hotel Employees" includes any employee or independent contractor employed by a Hotel, who was hired to work or did work an average of at least five hours per week for four weeks at a Hotel.

Minimum Wage

Effective July 1, 2019, Hotel Employers must pay the following minimum hourly wages to all Hotel Employees:

• $15.00 for employees who also receive "health benefits" through their employer; or
• $20.00 for employees who do not also receive health benefits through their employer.

Employers that pay the lower, $15.00 per hour rate, are not required to shoulder the entire cost of the employee's "health benefits."  Rather, the employer meets the requirement of providing health benefits by paying $5.00 per hour toward the provision of health care benefits for the employee and the employee's dependents.

Protection from Assault and Other Threatening Behavior

Hotel Employers must provide a "Panic Button" to all Hotel Employees assigned to work in a guest room or bathroom without other employees present.  The ordinance defines Panic Button as "an emergency contact device carried by the hotel employee" which allows the employee to summon assistance in the event the employee encounters "crime, threat, or other emergency." 

Hotel Employers are prohibited from disciplining an employee for using a panic button, except where the employer has "clear and convincing" evidence that the employee knowingly and intentionally made a false report of an emergency.

Employees who report "violence or threatening behavior, including … indecent exposure" have the following additional rights:

• If the employee has reasonable fear for his or her safety, the employer must reassign the employee to a different floor or different area away from the person who is alleged to have engaged in the improper conduct.
• The employer must allow the employee paid time to contact the police and make a statement and to consult with a "counselor or advisor" of the employee's choice.
• The employer cannot require the employee to make a statement to the police.
• The employer must cooperate with any investigation of the incident by law enforcement or "any attorney for the complaining … employee."

Hotel Employers must place a sign on the back of each guest room door, written in at least 18-point font, that includes:

• The heading "The Law Protects Hotel Housekeepers and Employees From Threatening Behavior."
• A citation to Chapter 5.93 of the Oakland Municipal Code.
• A notice that the hotel provides panic buttons to its housekeepers, room servers, and other hotel employees assigned to work in guest rooms without other employees present.

"Humane" Workload

The measure creates several restrictions on the hours, amount of work, and type of work a Hotel Employer can require of certain employees.

Hotel Employers are prohibited from allowing employees to work more than 10 hours per day, unless the employees give voluntary "informed consent" to work additional hours.  In order for "informed consent" to be valid, it must meet the following requirements:

• Be in writing, signed by the employee, or "communicated electronically through an account or number particular to the hotel employee."
• The employer must have informed the hotel employee, within the previous 30 days and also in writing, (a) that the employee may decline to work more than 10 hours in any workday; and (b) that the employer will not subject the hotel employee to any adverse action for declining.
• Be provided in each language spoken by more than 10% or 10 hotel employees at the hotel, whichever is less.

The ordinance provides an exception to the above requirements for emergency situations involving "an immediate threat to public safety" or "substantial risk of property loss or destruction."

Hotel Employers cannot require a room cleaner to clean more than 4,000 square feet of floor space in an eight-hour period unless the employee is paid double his/her regular rate for all hours worked during that day.  If a room cleaner works less than eight hours in a work day, then the amount of square feet is proportionally reduced.  For example, an employee working a six-hour shift cannot be required to clean more than 3,000 square feet.  If a room cleaner is required to clean more than six checkout rooms, the maximum square footage is reduced by 500 square feet for each additional room.  For example, an employee cleaning nine rooms in an eight-hour shift cannot be required to clean more than 2,500 square feet.

Preservation of Records

Employers subject to the above provisions must keep records of compliance for at least three years.  The records must include the following:

• For room cleaners, a daily record of each employee's name, rate of pay, number of rooms cleaned per day, and square footage cleaned per day;
• For all employees working more than 10 hours during a work day, records showing the required notices were given and informed consents obtained.
• For all employees, a record of each employee's name, hours worked, rate of pay, and proof that the employer complied with the "health benefits" requirements.

Employers are required to produce the above records for inspection and copying by "hotel employees or their representatives" for inspection and copying.  When any employee or representative is requesting information regarding other employees, the employer must redact the other employees' names, addresses, and social security numbers from the copies that are produced. 

Where the employer fails to maintain or to produce the records required, the employer is presumed to have violated the corresponding requirements.

Retaliation

The measure contains a particularly broad anti-retaliation provision.  Employers are prohibited from retaliating against employees who assert their rights under these ordinances.  In addition, an employer cannot discharge an employee within 120 days of being notified the employee engaged in any such activity, unless the employer has "clear and convincing evidence of just cause for such discharge."  This provision may become a de facto requirement of "just cause" for any termination of any employee who regularly asserts their rights under these ordinances.

Notice of Rights

Hotel Employers must give written notification to all current employees of their rights under Chapter 5.93.  The notification must be provided in each language spoken by more than 10% or 10 hotel employees at the hotel, whichever is less.  Employers must give newly hired employees the same notification at the time of hire.

Joint Liability

Employers that contract with staffing agencies and other employers for the services of hotel employees share all civil liability for violations affecting the employees working under the contract. 

Administrative Enforcement by the City

The measure amends Oakland Municipal Code section 5.92.050 to authorize the city to investigate violations of any employment standards within the Code.  Alleged violators are entitled to "a hearing that affords … due process."  (The measure does not contain any provision specifically delineating any hearing procedure.)  Once given a hearing, the alleged violator is subject to the City's determination of whether a violation occurred.  The City may then order "appropriate relief," including reinstatement, back pay, and civil penalties (payable to the employees) of $50 per employee per day.  The City may also order the employer to pay the City $50 for each day and for each employee the violation occurred.  The funds paid to the City shall be used to offset the cost of enforcing the ordinances.

Administrative Enforcement by Others

The measure authorizes private employees and employee organizations (e.g., labor unions) to sue employers in civil court for violations of any City employment standard.  The suing party may recover back pay, reinstatement, and injunctive relief, as well as a civil penalty of $50 for each day and for each employee the violation occurred, up to a maximum of $1,000 per employee.

Department of Workplace and Employment Standards

The ordinance provides for the creation of the Department of Workplace and Employment Standards.  Effective July 1, 2020, the DWES shall enforce all City employment standards and shall have the full authority of the City to impose penalties, adopt rules and regulations consistent with the employment standards, and to enforce provisions of the California Labor Code "to the extent permitted by law."

Regulations

The measure gives the City and the DWES authority to create and enforce "rules and regulations" and to issue "determinations and interpretations" which will, themselves, have the force of law.  So far, there has been no indication of what additional "rules and regulations" will extrapolate from the measure. 

Consequences for Employers

Measure Z will certainly have consequences for employers operating within the City of Oakland.  The full extent of those consequences will depend on whether the new ordinances survive potential future legal challenges on constitutional and other grounds.