San Francisco Employment Law: City Ordinances Beyond State Law

San Francisco has been a laboratory for employment law innovation for over two decades. The city enacted the first paid sick leave law in the United States (2007), pioneered employer healthcare spending mandates (2008), and continues to push the boundary on worker protections that often become models for state and federal legislation years later.

For employers, the practical reality is this: complying with California law is not enough if your employees work in San Francisco. The city maintains its own minimum wage, its own sick leave rules, its own healthcare spending mandates, its own scheduling requirements for retail workers, and its own anti-discrimination protections that go beyond both state and federal law. Each of these ordinances is enforced by the San Francisco Office of Labor Standards Enforcement (OLSE), which has the authority to investigate complaints, conduct audits, and impose penalties.

The stakes are real. OLSE has collected millions of dollars in back wages and penalties from employers who failed to comply with local ordinances. Many of these employers were fully compliant with California state law — they simply did not know that San Francisco imposed additional requirements.

This guide covers every major San Francisco employment ordinance that applies to private-sector employers operating within city limits as of 2026.

### San Francisco Minimum Wage Ordinance (SF Admin. Code Ch. 12R)

San Francisco's minimum wage applies to all employees who perform at least two hours of work per week within the geographic boundaries of the City and County of San Francisco — regardless of where the employer is located.

Current rate: $18.67/hr (effective July 1, 2024). The rate is adjusted annually on July 1 based on the prior year's Bay Area Consumer Price Index (CPI-U). Because CPI adjustments are automatic, the rate can increase every year without any legislative action.

• No tip credit. Like California state law, San Francisco prohibits employers from using tips to meet the minimum wage obligation.
• No small employer exemption. The rate applies to every employer regardless of size.
• Applies to all hours worked physically within SF city limits, even if the employer's office is elsewhere.
• Employers must post the current minimum wage rate in a conspicuous location at every SF work site, in English, Spanish, Chinese, and any other language spoken by at least 5% of employees.

Penalties for violation: Employers who fail to pay the SF minimum wage owe back wages plus interest, and face administrative penalties of up to $100 per employee per pay period for the initial violation and $250 per employee per pay period for subsequent violations (SF Admin. Code Sec. 12R.7).

### San Francisco Paid Sick Leave Ordinance (SF Admin. Code Ch. 12W)

San Francisco's Paid Sick Leave Ordinance (PSLO) was the first employer-mandated paid sick leave law in the United States when it took effect in 2007. It remains more generous than California's state sick leave law in several respects.

Accrual: One hour of paid sick leave for every 30 hours worked, with no waiting period. Accrual begins on the first day of employment.

• Employers with 10+ employees: 72 hours (9 days) accrual cap
• Employers with fewer than 10 employees: 40 hours (5 days) accrual cap

Comparison to state law: California's Healthy Workplaces, Healthy Families Act (Labor Code Sec. 245-249) requires 40 hours (5 days) of paid sick leave per year for all employers. San Francisco's 72-hour cap for larger employers significantly exceeds this, meaning SF employers cannot simply rely on state-law compliance.

Permitted uses: Same as state law (employee's own illness, care for family member, domestic violence/sexual assault/stalking recovery), plus public health emergencies and closures of the employee's workplace or child's school by a public official.

Carryover: Unused sick leave carries over from year to year, but the employer can cap the total accrual at 72 hours (or 40 hours for small employers).

Penalties: Administrative penalties of $50-$100 per day per violation, plus back pay of the sick leave wages owed.

### San Francisco Health Care Security Ordinance (SF Admin. Code Ch. 14)

The HCSO is one of the most significant — and most frequently misunderstood — local employment mandates in the country. It requires covered employers to make minimum healthcare expenditures for their San Francisco employees.

• For-profit employers with 20+ employees (worldwide, not just in SF)
• Nonprofit employers with 50+ employees

Who qualifies: Employees who work 8+ hours per week within SF and have been employed for 90+ calendar days.

• Large employers (100+ employees): $3.40/hr per covered employee
• Medium employers (20-99 employees): $2.27/hr per covered employee

Rates are adjusted annually by OLSE.

1. Health insurance premiums (employer's share)
2. Contributions to a health savings account (HSA) or health reimbursement arrangement (HRA)
3. Payments to the SF City Option program (a city-administered healthcare access program)
4. Direct reimbursement of employee medical expenses
5. Any combination of the above

Critical compliance point: The expenditure must be made for each hour the covered employee works (or is paid for, such as PTO) in San Francisco, up to 172 hours per month. Many employers who provide health insurance still fall short because the per-hour value of the employer's premium contribution is less than the required rate. You must calculate the per-hour value of your health plan contribution and top up any shortfall.

Penalties: OLSE can impose penalties of $500-$1,000 per violation per employee plus the amount of the underpayment. Willful violations may result in additional penalties.

### San Francisco Paid Parental Leave Ordinance (SF Police Code Art. 33H)

Effective January 1, 2017, San Francisco became the first U.S. jurisdiction to require employers to provide supplemental compensation during parental leave.

What it requires: Employers with 20+ employees must provide "supplemental compensation" to employees receiving California Paid Family Leave (PFL) benefits for bonding with a new child. The supplemental compensation bridges the gap between the state PFL benefit (approximately 60-70% of weekly wages, capped) and 100% of the employee's normal gross weekly wage.

Duration: Up to 8 weeks, aligned with the California PFL benefit period.

Who qualifies: Employees who work at least 8 hours per week in SF, have been employed for 180+ days, and are receiving California PFL benefits for baby bonding. The employee must have at least 40% of their weekly hours worked within SF.

• Employers with 50+ employees: effective January 1, 2017
• Employers with 35+ employees: effective July 1, 2017
• Employers with 20+ employees: effective January 1, 2018

Penalties: Administrative citations up to $500 per violation. Retaliation against employees who exercise rights under this ordinance carries additional penalties.

### San Francisco Fair Chance Ordinance (SF Police Code Art. 49)

San Francisco's Fair Chance Ordinance (FCO) restricts employer use of criminal history information in employment decisions. It is significantly broader than California's statewide Fair Chance Act (Labor Code Sec. 432.9 / AB 1008).

Key differences from state law:

• Employers cannot ask about or consider juvenile records, diversionary program participation, or sealed/expunged records
• The ordinance protects applicants for employment, independent contractors, and current employees being considered for promotion
• Employers must conduct and document an individualized assessment considering: the nature and gravity of the offense, time elapsed, and the nature of the job sought

Penalties: $500 for first violation, $1,000 for second violation within the same year, and $2,000 for each subsequent violation within that year — per applicant/employee affected.

### San Francisco Family Friendly Workplace Ordinance (SF Admin. Code Ch. 12Z)

Effective January 1, 2014, this ordinance gives employees the right to request flexible or predictable working arrangements to assist with caregiving responsibilities.

Who is covered: Employers with 20+ employees (all employees, not just SF-based).

Who can make a request: Any employee who has been employed for 6+ months and works at least 8 hours per week, and who is a caregiver for a child, a person with a serious health condition, or a parent aged 65+.

• Meet with the employee within 21 days of the request
• Respond in writing within 21 days of the meeting
• If denying the request, provide a bona fide business reason from the list specified in the ordinance

Protected flexible arrangements include: Changes to start/end times, telecommuting, job sharing, part-time schedules, compressed workweeks, and predictability in scheduling.

Penalties: $50 per day per violation for failure to comply with the procedural requirements.

### Formula Retail Employee Rights Ordinance (SF Police Code Art. 33F) — Predictive Scheduling

San Francisco's predictive scheduling law applies to "formula retail establishments" — businesses with 40+ retail locations worldwide and 20+ employees in SF. This includes chain retailers, chain restaurants, and chain hotels.

• Good faith estimate of schedule: At time of hire, provide a written good faith estimate of the employee's expected work schedule.
• 14-day advance notice: Post the work schedule at least 14 days in advance.
• Predictability pay for changes: If the employer changes the schedule after the 14-day window:
• Right to rest: Employees cannot be scheduled for a shift that begins less than 11 hours after the end of the previous day's shift, unless the employee provides written consent and is paid a time-and-a-half premium.
• Offer hours to existing employees first: Before hiring new employees, the employer must offer additional hours to existing qualified part-time employees.
• Equal treatment for part-time workers: Part-time employees must have the same starting rate and access to time off as full-time employees performing the same job.

Penalties: $50 per employee per day for posting/scheduling violations, plus back pay for any predictability pay owed.

### San Francisco Commuter Benefits Ordinance (SF Environment Code Ch. 4)

Employers with 20+ employees who work in SF must offer at least one of the following commuter benefits:

1. Pre-tax transit/vanpool benefits under IRC Sec. 132(f) — at least the federal maximum ($325/month in 2025)
2. Employer-paid transit pass or vanpool subsidy
3. Employer-provided vanpool at no cost to the employee

Enforcement: The SF Department of the Environment administers this ordinance. Non-compliant employers receive a written warning and 90 days to comply, followed by fines of $100/day for the first violation, $200/day for the second, and $500/day for subsequent violations.

### Weight and Height Anti-Discrimination Protection (SF Police Code Art. 33)

San Francisco prohibits employment discrimination based on weight and height — protections that do not exist under California state law or federal law. These characteristics are included in San Francisco's broader anti-discrimination ordinance alongside race, sex, age, religion, disability, and other protected categories.

Practical implication: Employers cannot use weight or height as employment criteria unless they can demonstrate a bona fide occupational qualification (BFOQ). This applies to hiring, promotion, compensation, and termination decisions.

Enforcement: The San Francisco Human Rights Commission investigates complaints. Remedies include injunctive relief, compensatory damages, and attorney's fees.

### Office of Labor Standards Enforcement (OLSE)

• Minimum Wage Ordinance
• Paid Sick Leave Ordinance
• Health Care Security Ordinance
• Paid Parental Leave Ordinance
• Fair Chance Ordinance
• Family Friendly Workplace Ordinance
• Formula Retail Employee Rights Ordinance
• Commuter Benefits Ordinance (jointly with SF Department of the Environment)

1. Complaint-driven investigations: OLSE accepts complaints from employees, former employees, and third parties. Complaints can be filed online, by mail, or in person, and OLSE accepts them in multiple languages.
2. Proactive audits: OLSE conducts industry-targeted audits, often focusing on sectors with high violation rates (restaurants, retail, janitorial services, hospitality).
3. Penalties and remedies: OLSE can order back pay, interest, administrative penalties per violation, and require changes to employer policies and practices. OLSE can also refer cases to the San Francisco City Attorney for civil enforcement.

Retaliation protections: Every SF employment ordinance includes anti-retaliation provisions. Employers who retaliate against employees for exercising their rights face additional penalties, including reinstatement and back pay.

### Penalty Summary

1. Treating California compliance as sufficient. This is the most common error. An employer provides 40 hours of sick leave, pays $16.50/hr, and believes they are fully compliant. In San Francisco, they are violating the minimum wage ordinance, the sick leave ordinance, and likely the HCSO. Every SF ordinance requires separate analysis on top of state law compliance.

2. Failing to calculate HCSO expenditures correctly. Many employers assume that providing health insurance satisfies the HCSO. It does not, unless the per-hour value of the employer's premium contribution meets or exceeds the required rate ($2.27 or $3.40/hr depending on employer size). An employer paying $600/month toward an employee's health premium for an employee who works 172 hours/month is spending $3.49/hr — which satisfies the large employer rate. But an employer paying $350/month for the same employee is spending only $2.03/hr — below both tiers.

3. Not tracking hours worked within SF city limits. If employees split time between SF and other locations, the employer must track which hours are worked within SF to determine minimum wage, sick leave accrual, and HCSO spending obligations. "We don't track that" is not a defense.

4. Missing the Fair Chance Ordinance's 7-day response requirement. Under state law, employers must give applicants 5 business days to respond to a preliminary decision to deny employment based on criminal history. Under the SF FCO, it is 7 business days. Employers using a statewide process with a 5-day window are violating the SF ordinance.

5. Ignoring predictive scheduling for chain businesses. Employers with 40+ locations nationally often do not realize the Formula Retail Employee Rights Ordinance applies to them. If your SF locations employ 20+ people and you have 40+ locations worldwide, you must comply with the 14-day advance scheduling notice, predictability pay, and offer-hours-first requirements.

6. Not providing the Paid Parental Leave supplement. Employers with 20+ employees who have SF-based workers must supplement California PFL benefits to bring the employee to 100% of gross weekly wages during baby-bonding leave. Many employers are unaware this obligation exists because it sits on top of the state program.

1. Audit your HCSO spending per hour. Pull the annual cost of your employer health plan contribution for each SF-based employee. Divide by the number of hours each employee worked (or was paid for) during the year. If the per-hour amount falls below $3.40 (for 100+ employee companies) or $2.27 (for 20-99 employee companies), you owe the difference. Calculate the shortfall, decide whether to increase plan contributions or make a City Option payment, and close the gap before the next OLSE quarterly reporting deadline.

1. Compare your sick leave policy to SF requirements. If you provide California's statutory minimum of 40 hours, you are out of compliance in San Francisco for employers with 10+ employees. Update your policy to allow accrual up to 72 hours, with carryover. If you front-load sick leave, ensure you front-load at least 72 hours at the start of each year for SF employees.

1. Review your background check process against the SF Fair Chance Ordinance. Confirm you are not asking about criminal history before a conditional offer, that your adverse action notices give applicants 7 business days (not 5) to respond, and that your individualized assessment is documented in writing. Audit your job postings to ensure none state or imply that criminal history is a disqualification.

1. Check whether predictive scheduling applies to your SF locations. Count your total retail/restaurant/hotel locations nationwide. If you have 40+ and employ 20+ people in SF, you must comply with the Formula Retail Employee Rights Ordinance. Implement a system for posting schedules 14 days in advance, tracking schedule changes, and calculating predictability pay for late changes.

1. Post all required SF workplace notices. OLSE publishes a set of mandatory workplace postings for each ordinance. Download the current versions from sf.gov/olse and post them in a conspicuous location at every SF work site. Postings must be in English, Spanish, Chinese, and any language spoken by 5% or more of your workforce. Failure to post is itself a citable violation.