UPDATE: On June 12, San Francisco re-enacted PHELO. The reenacted ordinance took effect June 17, 2020, and will remain in effect until it expires on August 16, 2020.

On April 17, 2020, San Francisco, California Mayor London Breed signed the San Francisco Public Health Emergency Leave Ordinance (PHELO), which took effect immediately. The next day, San Francisco's Office of Labor Standards Enforcement (OLSE) issued guidelines to help employers and employees understand their obligations and rights under the PHELO.

The guidelines provide that the current projected "end" date for PHELO is June 17, 2020 or the end of the public health emergency, whichever occurs first, unless the Board of Supervisors extends it. In some respects, the guidelines mirror various pre-existing standards in San Francisco's separate Paid Sick Leave Ordinance (PSLO), which were to be placeholder guidelines until OLSE adopted PHELO guidance. Some PHELO guidelines, however, differ from their PSLO equivalent. Below we highlight notable clarifications the guidelines provide.

Business Size Calculation: PHELO applies to private employers with 500 or more employees. The guidelines clarify that employers must use worldwide employee numbers to calculate business size. For businesses whose employee numbers fluctuate above and below 500 over a year, the average number of employees per pay period in 2019 will be the employer's business size in 2020. For individually owned franchises, the guidelines clarify business size determination relies on how many employees the franchisee has.

Employees: Generally, PHELO applies to any person providing labor or services for remuneration who is an employee under California law (the AB 5 standard, which creates a presumption that workers are employees), including part-time and temporary employees who perform work as an employee in San Francisco. The guidelines clarify PHELO does not cover the following workers: 1) private-sector employees at San Francisco International Airport (SFO); private-sector employees who work at businesses located in federal enclaves within San Francisco (e.g., the Presidio); and 3) independent contractors.

Under PHELO, all or any portion of the law's requirements do not apply to employees subject to a bona fide collective bargaining agreement (CBA) if the CBA waives the requirements in clear and unambiguous terms. The guidelines clarify waiver can occur via a side letter agreement to the CBA. The guidelines do not require the waiver to include specific language, but OLSE suggests the following:

Waiver of San Francisco Public Health Emergency Leave Ordinance: To the fullest extent permitted, this agreement shall operate to waive any provisions of the San Francisco Public Health Emergency Ordinance, and shall supersede and be considered to have fulfilled all requirements of said Ordinance as presently written, and or amended during the life of this agreement.

PHELO provides that employers may elect to limit their health care worker and/or emergency responder employees' leave, but at a minimum these employees may use leave if they are unable to work or telework because either a health care provider advises them to self-quarantine, or they are experiencing symptoms associated with COVID-19, seeking a medical diagnosis, and do not meet the CDC guidance on return-to-work criteria applicable to health care personnel with confirmed or suspected COVID-19. Although PHELO defines "health care worker" and "emergency responder" according to rules under the federal Families First Coronavirus Response Act (FFCRA), the guidelines do not include the FFCRA rule’s language that says these terms include any individual the highest official of a state determines is a health care provider or emergency responder necessary for the state’s response to COVID-19.

Designated Persons: If employees do not have a spouse or registered domestic partner, they may designate one person for whom they may use leave. The guidelines clarify that a PSLO-designated person will automatically be a PHELO-designated person.

Covered Uses & Using Leave: The guidelines clarify two PHELO provisions concerning covered uses. In part, PHELO allows employees to use leave when they are unable to work or telework because they are caring for a family member whose school or place of care was closed, or whose care provider is unavailable, due to COVID-19. The guidelines provide that employees may choose to use an alternative school or place of care in lieu of using leave, but employers cannot require they do so.

Under PHELO, employees can use leave regardless of whether and when they are scheduled to work. Per the guidelines, leave is not available to laid-off employees, or to those who resign or retire. The guidelines, however, confirm that a separation does not include a furlough, which confirms the understood intent to allow furloughed employees to use leave if they experience a qualifying event.

Notably, under the guidelines, employers need not permit employees to use leave when they work or the company schedules them to work outside San Francisco. Additionally, per the guidelines, employers cannot require employees to use leave in full-day increments; they can require employees to use leave in one-hour increments only, as PHELO provides. The guidelines also provide that, notwithstanding PHELO allowing employers to require employees to follow reasonable notice procedures when requesting leave for a foreseeable absence, an advance notification requirement may be unreasonable because the time required is excessive or the method required is unnecessarily burdensome.

Amount of Leave: PHELO provides a different amount of leave to full- and part-time employees (as of February 25, 2020). Per the guidelines, a full-time employee works 40 hours per week, so it appears other employees are "part" time. For those employees hired after February 25, 2020, the guidelines use a variation of the part-time employee standard for calculating the amount of leave, i.e., the average number of hours over a two-week period the employer scheduled the employee to work from the time of hiring to the date leave begins, including leave hours taken.

The guidelines also address how PHELO will operate for employees covered by California Governor Newsom's Executive Order (EO) N-51-20, which took effect on April 16, 2020, and requires certain food-sector workers to receive COVID-19 supplemental paid sick leave (CPSL) during the pendency of any statewide stay-at-home orders by California’s Public Health Officer. Per the guidelines, for each CPSL hour an employer provides an employee, it can reduce the amount of PHELO leave employees must receive. So, if PHELO requires 80 hours to be available to an employee, and the employee takes 40 hours of CPSL, the employer would be obligated to provide, at most, 40 PHELO hours for a qualifying event.

The guidelines further clarify that employers cannot offer bonuses or raises to employees in lieu of providing PHELO leave.

The guidelines provide some clarification concerning how much leave employees can use per day or week. The guidelines say employees can use leave for scheduled overtime hours, but employers may pay such hours at the regular rate instead of at an overtime-premium rate. If employees will not work any hours in a week because they take leave, employers can limit weekly use to the average number of hours over a one-week period the employer scheduled the employee to work, including hours the employee took leave. For employees hired on or before February 25, 2020, employers use the six-month period ending on February 25. For employees hired after February 25, employers use the time between the hire date and the date the employee takes leave. The amount of leave hours an employee can use in a week cannot exceed what would be the employee's weekly hours had a qualifying event not occurred or an employer did not reduce an employee's hours. For example, if a 40-hour-per-week employee can only work 20 hours because of a qualifying childcare event or because the employer reduces the employee's schedule to 20 hours, an employer can limit an employee's use to 20 leave hours that week.

Rate of Pay: If an employee has two jobs with different pay rates, or fluctuating pay for the same job, the guidelines create a unique pay calculation: the average hourly rate for the six months before the date an employee takes leave. This period is notably longer than the general standard under the PHELO for non-exempt employees, i.e., either the workweek's regular rate, or the average rate the employee earned during the prior 90 days of employment based on dividing total wages (excluding overtime premium pay) by total hours worked. Additionally, the guidelines confirm that employers can exclude tips when calculating an employee's PHELO pay rate.

Recordkeeping: The guidelines require employers to keep, for four years, records documenting work scheduled, leave taken, and hours worked (except for overtime-exempt employees).

Prohibitions: In addition to PHELO's prohibition against requiring employees to find replacement workers to cover shifts when they use leave, under the guidelines employers cannot require employees to change their schedule in lieu of using leave.

Benefits: Finally, per the guidelines, if an employer provides benefits on an hourly basis, it must provide the same benefits when employees use leave.

Next Steps: Given PHELO immediately took effect, employers should review the OLSE guidelines to determine whether and how they must revise any policies, practices, or procedures they prepared in anticipation of the mayor's signature. If both PHELO and California Executive Order N-51-20 apply, employers should determine how they will address compliance challenges both directives present, especially those with only certain employees covered by either.