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HomeMy WebLinkAboutORD 1662-2024 (24-1043)City of South San Francisco W. City Council Ordinance: ORD 1662-2024 File Number: 24-1043 P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA Enactment Number: ORD 1662-2024 Ordinance of the City of South San Francisco amending Title 8 of the South San Francisco Municipal Code to add Chapter 8.78 to regulate certain private development projects by withholding the certificate of occupancy or building permit final when an owner or contractor has unpaid final wage theft judgments. WHEREAS, the labor advocate Nor Cal Carpenters Union has identified wage theft as an ongoing issue on construction projects and has requested local jurisdictions to take reasonable enforcement action to reduce this type of violation; and WHEREAS, the failure by an employer to pay owed and earned wages by contract can affect the health and welfare of employees and/or residents of South San Francisco; and WHEREAS, in compliance with California State law, the City has drafted a local ordinance for enforcement of final wage theft judgments made by the State of California Labor Commission; and WHEREAS, this ordinance would withhold Certificate of occupancy or Building permit final approvals from a contractor if City staff have sustained a complaint of an unpaid wage theft judgment; and WHEREAS, by withholding Certificate of occupancy or Building permit final, the City will incentivize resolution of an unresolved wage theft judgment since most private contracts require complete approvals prior to final payment; and WHEREAS, this ordinance will be enforceable for new construction meeting certain size and valuation thresholds. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SOUTH SAN FRANCISCO, DOES HEREBY ORDAIN AS FOLLOWS: Section 1. Preamble The City Council finds that the foregoing recitals are true and correct and are incorporated into the Ordinance by this reference. Section 2. Adoption of Chapter 8.78 Wage Theft Ordinance 8.78.010 Title and purpose This chapter provides local enforcement and penalty for any contractor doing a project within the City and deemed to have an unresolved wage theft judgment on their record. The City has the right to withhold a Certificate of occupancy or Building permit final in this circumstance as a local measure to ensure fair and equitable wage payments to employees. City of South San Francisco File Number: 24-1043 Enactment Number: ORD 1662-2024 8.78.020 Definitions The following words and phrases, whenever used in this Part, shall be construed as defined in this section: A. "Certificate of occupancy" means the building official's certification that the project complies with all applicable requirements for occupancy. The building official's signature on the final inspection card may serve as the certificate of occupancy. B. "Building permit final" means all components related to the project are complete: There are no construction crew left on site working, there are no outstanding correction items from any department and all departments have signed off. C. "Contractor" means the prime contractor for the project. D. "Subcontractor" means any business or person that carries out work of the prime contractor or another contractor for the project. E. "Hearing officer" means the City Attorney or designee. F. "Labor Code Section 226(a)" is a provision of the California Labor Code that requires the employer to provide each employee, either bimonthly or at the time of payment of wages, an itemized wage statement that contains certain specified information concerning the employee's wages and deductions. G. "Labor Code Section 2810.5" is a provision of the California Labor Code that requires the employer, at the time of hiring, to provide each employee a written notice containing certain specified information about the employer, the employee's rate of pay, worker's compensation insurance, and sick leave. H. "Mail" means to deposit in United States mail, postage prepaid, unless the parties have agreed in writing to receive notifications by email in lieu of United States mail. I. "New construction" means construction of new buildings or structures including additions to existing buildings and structures. J. "Owner" means the person or persons, firm, corporation, partnership or other legal entity exercising ownership of the project. K. "Remodeling" means internal or external reconstruction, renovation, or improvements to an existing building or structure that does not constitute complete replacement of the existing building or structure. L. "Project" means a construction project that requires a building permit from the City of South San Francisco. M. "Project construction employees" means employees of the contractor or subcontractor. N. "Representative" means a person authorized to legally bind the owner and/or contractor (for example, a corporate officer, general partner, or managing member of a limited liability company). O. "Unpaid wage theft judgment" means a judgment, decision or order, for which all appeals have been exhausted or the time to appeal has expired, that was issued by a court of law or an investigatory government agency authorized to enforce applicable federal, state and local wage and hour laws, including, but not limited to, the Federal Fair Labor Standards Act, the California Labor Code, and the City of South San Francisco Minimum Wage Ordinance (Chapter 8.71), and which has not been fully paid or satisfied. As used in this subsection, "investigatory government agency" includes the United States Department of Labor, the California Division of Labor Standards Enforcement, the city of South San Francisco, or any other governmental entity or division tasked with the investigation and enforcement of wage and hour laws. 8.78.030 Exemptions A project that meets any of the following criteria is exempt from the requirements of this chapter. A. The project consists of less than five thousand square feet of new construction or remodeling. City of South San Francisco File Number: 24-1043 Enactment Number: ORD 1662-2024 8.78.040 Acknowledgement of responsibility As a condition of approval for any building permit required for a project, an applicant shall sign an acknowledgement that: A. The owner, contractor, and all subcontractors on the project will comply with all applicable provisions of this chapter and the California Labor Code, including Labor Code Sections 2810.5 and 226a. B. The owner and contractor are responsible for ensuring that the contractor and all subcontractors on the project pay any wage theft judgments that have been entered against them either before or during the construction of the project. C. A violation under Section 8.78.070 will result in withholding of the certificate of occupancy/building permit final, whichever is applicable, at the conclusion of the project. 8.78.050 Posting Each day that work is performed on the project, the contractor shall post, in a conspicuous place at each job site where work takes place, the notice published each year by the city informing employees of their rights under this chapter. The notice shall be written in the top three languages spoken in the city based on the latest available census information for the City. 8.78.060 Pay transparency certification Prior to issuance of approval of certificate of occupancy or building permit final for a project, for each contractor or subcontractor whose portion of the work exceeds one hundred thousand dollars or one percent of the value of the construction cost of the project, whichever is greater, owner shall provide to the city a pay transparency certification ("certification"), signed by a representative of the owner, the contractor and any subcontractor under penalty of perjury under the laws of the state of California. The certification required under this section shall be in a form approved by the city and contain the following. A. A statement that the owner, contractor, and any subcontractors have no unpaid wage theft judgments; and B. A statement that: (1) Project construction employees of the contractor and any subcontractors received written notice of the employers' pay practices as required by California Labor Code Section 2810.5 and wage statements under Labor Code Section 226(a); or (2) Project construction employees of the contractor and/or any subcontractors are covered by a valid collective bargaining agreement that expressly provides for the wages, hours of work, and working conditions of the employee, and the agreement provides premium wage rates for all overtime hours worked and a regular hourly rate of pay for those employees of not less than thirty percent more than the state minimum wage. (See Labor Code Section 2810.5(c)). 8.78.070 Violations A. The building official shall not issue a certificate of occupancy or building permit final under either of the following circumstances: (1) The owner has failed to submit the pay transparency certification required by Section 8.78.060. (2) The City Attorney has sustained a complaint of an unpaid wage theft judgment pursuant to Section 8.78.080, and the owner or contractor has neither cured the unpaid wage theft judgment nor reversed the City Attorney's determination by appeal pursuant to Section 8.78.090. City of South San Francisco File Number: 24-1043 Enactment Number: ORD 1662-2024 8.78.80 Unpaid wage theft iudament - Complaint A. Any person who is aware of an unpaid wage theft judgment against the contractor or a subcontractor on a project whose portion of the work exceeds one hundred thousand dollars or one percent of the value of the construction cost of the project, whichever is greater, may submit a complaint to the building official. The complaint must include: (1) a copy of a labor commissioner's order, decision or award; (2) a copy of the judgment entered by a court of law that the specified contractor or subcontractor is the subject of an unpaid wage theft judgment; and (3) a declaration signed under penalty of perjury from the person that is owed the unpaid wages under the final wage theft judgment against the specified contractor or subcontractor that the judgment has not been satisfied. B. The complaint must be received by the building official before the building official has issued a certificate of occupancy or building permit final. After receiving a complaint, the building official shall not issue the certificate of occupancy or building permit final if the City Attorney finds that the complaint is sustained. C. The City Attorney shall, within 10 working days, mail written notice of the complaint to the owner and contractor at the address(es) on file with the city for the project. If the review of the complaint will delay issuance of the certificate of occupancy or building permit final, the City Attorney shall notify the owner and contractor as soon as practicable. D. The owner or contractor may provide a written response to the complaint within 30 working days of the mailing of the notice of alleged violation. Failure to respond may be deemed an admission to the truth of the facts alleged in the complaint. E. After consideration of the complaint and the owner or contractor's response, if any, the City Attorney shall make a finding that the complaint is either sustained or not sustained. The City Attorney's decision shall be mailed to owner, contractor, complaining party, and the person that is owed the unpaid wages under the final wage theft judgment. 8.78.090 Unpaid wage theft iudgment - Appeal A. If an owner or contractor is aggrieved by a decision of the City Attorney pursuant to Section 8.78.080, the aggrieved owner or contractor may appeal the decision by submitting a written appeal with the hearing officer within 10 working days of the mailing of the City Attorney's decision. The appeal shall contain the facts and basis for the appeal. The appeal shall be accompanied by payment of the appeal fee adopted by the city council. B. The hearing shall be heard by the hearing officer within 60 working days of receipt of the appeal, or at a date and time agreed to by the parties. The complaining party shall be the respondent at the appeal hearing. C. All parties involved shall have the right to offer testimonial, documentary, and tangible evidence bearing on the issues, to be represented by counsel, and to confront and cross-examine witnesses. Testimony may be taken on oath or affirmation. The hearing shall not be conducted according to formal rules of evidence. Any relevant evidence may be admitted if it is the sort of evidence upon which reasonable persons are accustomed to relying in the conduct of serious affairs. D. The hearing shall be de novo. The complaining party must prove by a preponderance of the evidence that the contractor or a subcontractor on the project is the subject of an unpaid wage theft judgment. E. The hearing officer shall issue a written decision within 10 working days of the hearing. The decision shall be final and shall be subject to judicial review according to the provisions and time limits set forth in Code of Civil Procedure Section 1094.6. City of South San Francisco File Number: 24-1043 Enactment Number: ORD 1662-2024 8.78.100 Cure of violation The owner, contractor, or subcontractor may cure a violation of this chapter at any time, including a violation related to an unpaid wage theft judgment, by providing evidence that the judgment has been paid, or that it has been secured by a labor payment bond, lien release bond, or similar security instrument in a form and amount sufficient to ensure that any wage claims and penalties can be fully paid. 8.78.110 No private right of action Nothing in this chapter shall be interpreted to authorize a right of action against the city. Section 3. Publication and Effective Date Pursuant to the provisions of Government Code Section 36933, a summary of this Ordinance shall be prepared by the City Attorney. At least five (5) days prior to the Council meeting at which this Ordinance is scheduled to be adopted, the City Clerk shall (1) publish the Summary, and (2) post in the City Clerk's Office a certified copy of this Ordinance. Within fifteen (15) days after the adoption of this Ordinance, the City Clerk shall (1) publish the summary, and (2) post in the City Clerk's Office a certified copy of the full text of this Ordinance along with the names of those City Council members voting for and against this Ordinance or otherwise voting. At a meeting of the City Council on 10/23/2024, a motion was made by Councilmember Addiego, seconded by Councilmember Nicolas, that this Ordinance be adopted. The motion passed. Yes: 5 Mayor Coleman, Vice Mayor Flores, Councilmember Addiego, Councilmember Nagales, and Councilmember Nicolas Attest by sa Govea Acosta, City Clerk U--- JameslColeman,— � - Mayor City of South San Francisco