San Francisco, CA Health Care Accountability

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San Francisco, CA, US

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Type: Ordinance

Status: Adopted on 5/31/01 and updated on 3/24/06

Source File: http://www.municode.com/content/4201/14131/HTML/ch012q.html

Text:

Update: Mayor Gavin Newsom announced that as of January 2, 2008 San Francisco residents with annual incomes at or below 300% of the Federal Poverty Level will be eligible to enroll in the Healthy San Francisco program. Healthy San Francisco is a program that provides accessible and affordable health care services to uninsured San Francisco residents. See here

CHAPTER 12Q: HEALTH CARE ACCOUNTABILITY

SEC. 12Q.1. TITLE.
This Chapter shall be known as the "San Francisco Health Care Accountability Ordinance."

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

SEC. 12Q.2. DEFINITIONS.
As used in this Chapter, the following capitalized terms shall have the meanings set forth in the following provisions.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

SEC. 12Q.2.1. AGENCY.
"Agency" shall mean the Office of Labor Standards Enforcement.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001; Ord. 49-06, File No. 051908, App. 3/24/2006)

SEC. 12Q.2.2. AGENCY DIRECTOR.
"Agency Director" shall mean the Director of the Office of Labor Standards Enforcement or his or her designee.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001; Ord. 49-06, File No. 051908, App. 3/24/2006)

SEC. 12Q.2.3. CITY.
"City" shall mean the City and County of San Francisco.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

SEC. 12Q.2.4. CONTRACT.
(a) "Contract" shall mean an agreement between a Contracting Department and any person or entity that provides for public works or public improvements to be purchased, or for services to be performed, at the expense of the City. The term "Contract" also means an agreement between a Tenant or Subtenant and any person or entity to perform services on property covered by a Lease. The term "Contract" includes "Contract Amendment."

(b) Notwithstanding the foregoing, the term "Contract" does not include the following:

(1) Agreements for a duration of less than one (1) year. Contracting Departments and Tenants and Subtenants are prohibited from entering into multiple contracts of short duration with the proposed Contractor in order to evade the requirements of this Chapter;
(2) Agreements for the purchase or lease of goods, or for guarantees, warranties, shipping, delivery, installation or maintenance of such goods. Where an agreement is for the purchase or lease of both goods and other services, the agreement shall not be deemed a "Contract" if a preponderance of the contract amount is for goods;
(3) Agreements entered into pursuant to settlement of legal proceedings;
(4) Agreements for urgent or specialized advice, consultation or litigation services for the City Attorney's Office where the City Attorney finds that it would be in the best interests of the City not to include the requirements of this Chapter;
(5) Agreements with any person or entity if the amount of the agreement is less than $25,000 (in the case of a for-profit entity or person) or less than $50,000 (in the case of a Nonprofit Corporation). However, if the Contracting Party has multiple agreements with the City in a given fiscal year (which agreements would be considered "Contracts" under this Chapter except that the individual dollar amounts are below the thresholds set forth in the preceding sentence) and the cumulative amount of such agreements is $75,000 or more, the provisions of this Chapter shall apply to each such agreement from the date on which the triggering Contract is executed;
(6) Agreements for the investment, management or use of trust assets where compliance would violate the fiduciary duties of the trustee;
(7) Agreements executed prior to the Effective Date (unless and until a Contract Amendment is executed);
(8) Agreements executed after the Effective Date (unless and until a Contract Amendment is entered into) pursuant to, and within the scope of, bid packages or requests for proposals advertised and made available to the public prior to the Effective Date, unless the bid packages or requests for proposals are materially amended on or after the Effective Date;
(9) Agreements involving the expenditure by the City of special funds or other non-General Fund revenues to the extent that application of this Chapter would require the City to use General Fund monies to supplement the special funds or other non-General Fund revenues to maintain the current level of services;
(10) Agreements that require the expenditure of grant funds awarded to the City by another entity. If a Contract is funded both by grant funds and non-grant funds, the entire Contract is exempt; provided that, if the use of the grant funds is severable from the non-grant funds, the Contract is exempt only with respect to the use of the grant funds;
(11) Agreements pursuant to which the City awards a grant to a Nonprofit Corporation;
(12) Agreements with a public entity, unless the public entity is the San Francisco Redevelopment Agency, the San Francisco LAFCO, the San Francisco Transportation Authority, the San Francisco Parking Authority or the San Francisco Health Authority;
(13) Agreements for employee benefits to be provided to City employees, where the Director of Human Resources finds that no person or entity is willing to comply with this Chapter and is capable of providing the required employee benefits;
(14) Agreements for the investment, management or use of City monies where the Treasurer finds that requiring compliance with this Chapter will violate the Treasurer's fiduciary duties and for the investment of retirement, health or other funds held in trust pursuant to Charter, statute, ordinance or MOU where the official or officials responsible for investing or managing such funds find that requiring compliance with this Chapter will violate their fiduciary duties;
(15) Loan agreements and agreements made in connection with loans or grants under which the City, as creditor or grantor, is providing funds to be used by the debtor or grantee to
(A) Acquire an interest in real property on which residential improvements for low- or moderate-income households will be constructed;
(B) Construct improvements owned or leased by the debtor or grantee, on condition that residents of the improvements qualify as low- or moderate-income households; or
(C) Rehabilitate improvements owned or leased by the debtor or grantee; and
(16) Agreements between a Tenant or Subtenant and a Contractor to perform services on property covered by a Lease if the Contractor does not provide such services on a regular and on-going basis. For purposes of this exemption, if employees of the Contractor I and any Subcontractors cumulatively work on the Lease property less than 130 days within a 12-month period, the agreement shall not be considered regular and on-going.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

SEC. 12Q.2.5. CONTRACT AMENDMENT.
(a) "Contract Amendment" shall mean a modification to an agreement which extends the term, increases the total amount of payments due from the City (except where such increase is due solely to cost of living adjustments), or modifies the scope of services to be performed by the Contractor; provided that the resulting agreement falls within the definition of "Contract."

(b) Notwithstanding the foregoing, "Contract Amendment" does not include a onetime extension of the term of a Contract for up to 6 months, or a construction change order, modification or amendment to a Contract executed by the City for its benefit (as determined by the Agency Director).

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

SEC. 12Q.2.6. CONTRACTING DEPARTMENT.
"Contracting Department" shall mean the City department, office, board, commission or other City agency that enters into the applicable Contract or Lease on behalf of the City.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

SEC. 12Q.2.7. CONTRACTING PARTIES.
"Contracting Parties" shall mean Contractors, Subcontractors, Tenants, and Subtenants.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

SEC. 12Q.2.8. CONTRACTOR.
"Contractor" shall mean the person or entity that enters into a Contract with the City. The term "Contractor" also means any person or entity that enters into a Contract with a Tenant or Subtenant to perform services on property covered by a Lease.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

SEC. 12Q.2.9. COVERED EMPLOYEE.
(a) "Covered Employee" shall mean:

(1) An Employee of a Contractor or Subcontractor who works on a City Contract or Subcontract for 20 hours or more per Week:
(A) Within the geographic boundaries of the City; or
(B) On real property owned or controlled by the City, but outside the geographic boundaries of the City; or
(C) Elsewhere in the United States; and
(2) An Employee of a Tenant or Subtenant who works 20 hours or more per Week on property that is covered by a Lease or Sublease; and
(3) An Employee of a Contractor or Subcontractor that has a Contract or Subcontract to perform services on property covered by a Lease or Sublease if the Employee works 20 hours or more per Week on the property.
(4) A Contractor or Subcontractor may not divide an employee's time between working on a City contract and working on other duties with the intent of reducing the number of Covered Employees working on the Contract to evade compliance with this Chapter. Such action shall constitute a violation of this Chapter. Beginning on July 1, 2002, the number of hours an employee must work per Week in order to be considered a "Covered Employee" pursuant to this Subsection (a)(1), (2) and (3) shall be 15 or more.

(b) Notwithstanding the foregoing, the term "Covered Employee" does not include the following:

(1) Any Employee (A) under the age of eighteen (18) who is a student, provided that the Employee does not replace, displace or lower the wage or benefits of any existing position or Employee, or (B) who is (i) a temporary Employee hired for a time-limited period, and (ii) for that period is receiving academic credit or completing mandatory hours for professional licensure or certification, and (iii) the Employee does not replace, displace or lower the wage or benefits of an existing position or Employee; or
(2) Any Employee employed as a trainee in a bona fide training program consistent with Federal law, which training program enables the Employee to advance into a permanent position, provided that the Employee does not replace, displace or lower the wage or benefits of any existing position or Employee; or
(3) Any Employee that the Contracting Party is required to pay no less than the "prevailing rate of wage" in accordance with Section A7.204 of Appendix A to the City's Charter or any provision of the San Francisco Administrative Code; or
(4) Any disabled Employee who:
(A) Is covered by a current sub-minimum wage certificate issued to the employer by the U.S. Department of Labor; or
(B) Would be covered by such a certificate but for the fact that the employer is paying a wage equal to or higher than the minimum wage.
(5) Any Employee of a Nonprofit Corporation who is a temporary employee, hired on an hourly or per diem basis to replace a regular employee during a temporary absence from the workplace.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001; Ord. 49-06, File No. 051908, App. 3/24/2006)

SEC. 12Q.2.10. EFFECTIVE DATE.
"Effective Date" shall mean the applicable effective date specified in Section 12Q.9 of this Chapter.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

SEC. 12Q.2.11. EMPLOYEE.
"Employee" shall mean any person who is employed by a Contracting Party, including part-time and temporary employees.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

SEC. 12Q.2.12. HEALTH DIRECTOR.
"Health Director" shall mean the Director of the Department of Public Health.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

SEC. 12Q.2.13. LEASE.
(a) "Lease" shall mean a written agreement (including, without limitation, any lease, concession or license) in which the City gives to another party the exclusive use of City Property for a term exceeding twenty-nine (29) consecutive days in any calendar year, whether by single or cumulative instruments. "City Property" means real property that is owned by the City or of which the City has exclusive use, if such property is located within the City or is under the jurisdiction of the San Francisco Airport Commission. If cumulative instruments cause the term of the agreement to exceed twenty-nine (29) consecutive days, the agreement in question shall be subject to this Chapter only on and after the effective date of the instrument which causes the term to exceed twenty-nine (29) consecutive days. For the purposes of this definition and the definition of Sublease, "exclusive use" means the right to use or occupy real property to the exclusion of others, subject to the rights reserved by the party granting such exclusive use. "Lease" includes "Lease Amendment."

(b) Notwithstanding the foregoing, the term "Lease" does not include the following:

(1) Agreements granting a franchise or easement;
(2) Agreements with a public entity, unless the public entity is the San Francisco Redevelopment Agency, the San Francisco LAFCO, the San Francisco Transportation Authority, the San Francisco Parking Authority or the San Francisco Health Authority;
(3) Agreements entered into pursuant to settlement of legal proceedings;
(4) Revocable at-will use or encroachment permits for the use of or encroachment on City Property, regardless of the ultimate duration of such permits;
(5) Street excavation, street construction or street use permits or other regulatory permits;
(6) Agreements for the use of a City right-of-way, including circumstances where a contracting utility has the power of eminent domain;
(7) Agreements governing the use of City Property under the jurisdiction of the Recreation and Park Department primarily for recreational activities.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

SEC. 12Q.2.14. LEASE AMENDMENT.
(a) "Lease Amendment" shall mean a modification to a Lease that extends the term or materially changes any other provision of the Lease.

(b) Notwithstanding the foregoing, "Lease Amendment" does not include a one-time extension of the term of a Lease for up to 6 months, or relocation of the leased premises at the request of the City for its benefit or convenience (as determined by the Agency Director).

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

SEC. 12Q.2.15. NONPROFIT CORPORATION.
"Nonprofit Corporation" shall mean a nonprofit corporation, duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and (if a foreign corporation) in good standing under the laws of the State of California, which corporation has established and maintains valid nonprofit status under Section 501(c)(3) of the United States Internal Revenue Code of 1986, as amended, and all rules and regulations promulgated under such Section.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

SEC. 12Q.2.16. WEEK.
"Week" shall mean a consecutive seven-day period. If the Contracting Party's regular pay period is other than a seven-day period, the number of hours worked by an employee during a seven-day Week for purposes of this Chapter; shall be calculated by adjusting the number of hours actually worked during the Contracting Party's regular pay period to determine the average over a seven-day Week. However, such period of averaging shall not exceed a duration of one month.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

SEC. 12Q.2.17. SUBCONTRACT.
(a) "Subcontract" shall mean an agreement between a Contractor and a person or entity pursuant to which the person or entity agrees to perform all or a portion of the services covered by a Contract.

(b) Notwithstanding the foregoing, the term "Subcontract" does not include:

(1) Agreements for the purchase or lease of goods, or for guarantees, warranties, shipping, delivery, installation or maintenance of such goods. When an agreement is for the purchase or lease of both goods and other services, the agreement shall not be deemed a "Subcontract" if a preponderance of the Contract amount is for goods;
(2) Agreements with a public entity, unless the public entity is the San Francisco Redevelopment Agency, the San Francisco LAFCO, the San Francisco Transportation Authority, the San Francisco Parking Authority or the San Francisco Health Authority.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

SEC. 12Q.2.18. SUBCONTRACTOR.
"Subcontractor" shall mean a person or entity that enters into a Subcontract.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

SEC. 12Q.2.19. SUBLEASE.
(a) "Sublease" shall mean any agreement with any person or entity for the exclusive right to occupy or use all or any portion of City Property covered by a Lease.

(b) Notwithstanding the foregoing, the term "Sublease" does not include each of the circumstances set forth in Section 12Q.2.13(b) that constitutes an exclusion from the definition of "Lease."

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

SEC. 12Q.2.20. SUBTENANT.
"Subtenant" shall mean a person or entity that enters into a Sublease.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

SEC. 12Q.2.21. TENANT.
"Tenant" shall mean the person or entity that enters into a Lease with the City. (Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

SEC. 12Q.3. COMPONENTS.
(a) With respect to each Covered Employee who either resides in San Francisco (regardless of where the Covered Employee provides services) or provides services covered by this Chapter in San Francisco, each Contracting Party shall do one of the following, at the Contracting Party's option:

(1) Offer to the Covered Employee health plan benefits that meet minimum standards prepared by the Health Director and approved by the Health Commission. The minimum standards shall provide for a maximum period for each Covered Employee's health benefits to become effective, no later than the first of the month that begins after 30 days from the start of employment on a covered Contract, Subcontract, Lease or Sublease. The Health Commission shall review such standards at least once every two years to ensure that the standards stay current with State and Federal regulations and existing health benefits practices; or
(2) For each Week in which the Covered Employee works the applicable minimum number of hours set forth in Section 12Q.2.9(a) (definition of "Covered Employee"), pay to the City $2.00 per hour for each hour the Covered Employee is employed by the Contracting Party on the Contract or Subcontract or on property covered by a Lease, but not to exceed $80 in any Week. The City shall appropriate money received pursuant to this Subsection (a)(2) for the use of the Department of Public Health. The Department of Public Health shall use the monies appropriated for staffing and other resources to provide medical care for the uninsured. The Health Commission may increase this hourly rate and Weekly maximum in accordance with either the Bureau of Labor Statistics Consumer Price Index for Medical Care in the San Francisco Bay Area or the increase in average Health Maintenance Organization (HMO) premiums in California, depending on which the Health Commission determines better reflects the cost of providing health care in the Bay Area; provided, however, the Health Commission shall take this action no more than once a year and any adjustments in such hourly rate or Weekly maximum must be approved by the Board of Supervisors by resolution; or
(3) Participate in a health benefits program developed by the Health Director in consultation with the Agency. The Health Director shall obtain Health Commission approval of the program before implementing it. The Health Director shall seek such approval within twelve (12) months after this Chapter is finally approved. Prior to implementation of the health benefits program provided in this Subsection (a)(3), each Contracting Party shall comply with Subsection (a)(1) or (a)(2). After the Health Director implements the program, in addition to the options provided in Subsections (a)(1) and (a)(2), Contracting Parties may satisfy their obligations under this Chapter by complying with the requirements of the health benefits program. In developing the program, the Health Director shall (i) attempt to make health coverage available for uninsured Covered Employees and, if feasible, any other person employed by a Contracting Party who works less than 20 hours per week on a City contract, or other uninsured City residents; (ii) use public health facilities to the maximum extent practicable; (iii) make the program economically viable; and (iv) provide a mechanism for funding which relies, as much as possible, on contributions by participating employers and employees.

(b) With respect to each Covered Employee who does not reside in San Francisco, but who provides services covered by this Chapter at the San Francisco Airport or at the San Bruno Jail, each Contracting Party shall do one of the options set forth in Subsection (a), at the Contracting Party's option.

(c) With respect to each Covered Employee who does not reside in San Francisco, and does not provide services covered by this Chapter in San Francisco, at the San Francisco Airport or at the San Bruno Jail, each Contracting Party shall do one of the following, at the Contracting Party's option:

(1) Offer to the Covered Employee health plan benefits that meet minimum standards prepared by the Health Director and approved by the Health Commission pursuant to Subsection 12Q.3(a)(1) above; or
(2) For each Week in which the Covered Employee works the applicable minimum number of hours set forth in Section 12Q.2.9(a) (definition of "Covered Employee"), pay to the Covered Employee an additional $2.00 per hour for each hour the Covered Employee is employed by the Contracting Party on the Contract or Subcontract or on property covered by a Lease, but not to exceed $80 in any Week, to enable the employee to obtain health insurance coverage. This represents the City's current estimate of the average cost of obtaining individual health insurance benefits. The Health Commission may increase this hourly rate and Weekly maximum in accordance with either the Bureau of Labor Statistics Consumer Price Index for Medical Care in the San Francisco Bay Area or the increase in average Health Maintenance Organization (HMO) premiums in California, depending on which the Health Commission determines better reflects the cost of providing health care in the Bay Area; provided, however, the Health Commission shall take this action no more than once a year and any adjustments in such hourly rate or Weekly maximum must be approved by the Board of Supervisors by resolution.

(d) When preparing proposed budgets and requests for supplemental appropriations for contract services, City departments that regularly enter into agreements for the provision of services by nonprofit corporations shall transmit with their proposal a written confirmation that the department has considered in its calculation the costs that the nonprofit corporations calculate that they will incur in complying with the Health Care Accountability Ordinance.

(e) Notwithstanding the above, if, at the time a Contract, Subcontract, Lease or Sublease is executed, the Contracting Party has 20 or fewer employees (or, in the case of a Nonprofit Corporation, 50 or fewer employees), including any employees the Contracting Party plans to hire to implement the Contract, Subcontract, Lease or Sublease, the Contracting Party shall not be obligated to provide the Health Care Accountability Components set forth in this Section 12Q.3 to its Covered Employees. In determining the number of employees had by a Contracting Party, all employees of all entities that own or control the Contracting Party and that the Contracting Party owns or controls, shall be included.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001; Ord. 49-06, File No. 051908, App. 3/24/2006)

SEC. 12Q.4. CONTRACTUAL OBLIGATIONS.
(a) Each Contracting Party that enters into a Contract, Subcontract, Lease, or Sublease shall agree:

(1) To comply with the requirements of this Chapter, including the requirement to choose and perform one of the Health Care Accountability Components set forth in Section 120.3;
(2) To comply with regulations adopted by the Agency pursuant to this Chapter;
(3) To maintain employee and payroll records in compliance with the California Labor Code and Industrial Welfare Commission orders, including the number of hours each employee has worked on the City Contract or Subcontract. If the Contracting Party fails to maintain records that accurately reflect the number of hours each employee has worked on the City Contract or Subcontract, it shall be presumed that any employee who has worked on a City Contract or Subcontract is a Covered Employee as defined in Section 12Q.2.9.
(4) To provide information and reports to the City in accordance with any reporting standards promulgated by the Agency in consultation with the Director of Health;
(5) To provide the City with access to pertinent payroll records relating to the number of employees employed and terms of medical coverage after receiving a written request to do so and being provided at least ten (10) business days to respond;
(6) To allow the City to inspect Contracting Parties' job sites and have access to Contracting Parties' employees in order to monitor and determine compliance with this Chapter;
(7) To cooperate with the Agency when it conducts audits;
(8) To include in every Contract, Subcontract, Lease, or Sublease subject to this Chapter provisions requiring compliance with this Chapter, consistent with any directives or standards adopted by the Agency;
(9) To notify the Contracting Department promptly of any Subcontractors performing services covered by this Chapter and certify to the Contracting Department that it has notified the Subcontractors of their obligations under this Chapter; and
(10) To represent and warrant that it is not an entity that was set up, or is being used, for the purpose of evading the intent of this Chapter.

(b) A Contracting Party shall not discharge, reduce in compensation, or otherwise discriminate against any Employee for notifying the City regarding the Contracting Party's noncompliance or anticipated noncompliance with this Chapter, for opposing any practice proscribed by this Chapter, for participating in proceedings related to this Chapter, or for seeking to assert or enforce any rights under this Chapter by any lawful means.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001; Ord. 49-06, File No. 051908, App. 3/24/2006)

SEC. 12Q.5. ADMINISTRATION AND ENFORCEMENT.
(a) The Agency, in consultation with the Department of Public Health, shall promulgate regulations for the interpretation and administration of this Chapter, which regulations shall be adopted only after public hearing. The regulations shall establish procedures for monitoring Contractors, receiving and investigating complaints, and providing administrative hearings to determine whether a Contractor has breached a Contract, Subcontract, Lease or Sublease based on the requirements of this Chapter.

(b) The Agency shall monitor Contracting Parties for compliance and investigate complaints of violations. The Agency, in consultation with the City Attorney, shall develop contractual provisions for use by Contracting Departments designed to enable the City to pursue the remedies set forth in this Section against every person or entity required to comply with this Chapter.

(c) The Agency, in consultation with the Department of Public Health, may conduct audits of Contracting Parties, although such audits shall be conducted through an examination of records at a mutually agreed upon time and location within ten (10) days of written notice.

(d) The Agency and the Department of Public Health shall provide an annual joint report to the Board of Supervisors on compliance with this Chapter. Such report shall include cumulative information regarding the number of waivers granted pursuant to this Chapter.

(e) A Covered Employee may report to the Agency in writing any alleged violation of this Chapter by a Contracting Party or other person or entity subject to this Chapter. The Agency shall investigate any such report. If the Agency determines that any person or entity has violated this Chapter, the Agency shall notify the Contracting Department of its, findings. In order to ensure compliance with this Chapter and to enhance the monitoring activities of the Agency, the City encourages reporting by Covered Employees pursuant to this Subsection. The Agency shall keep confidential the Covered Employee's name and other identifying information, to the maximum extent permitted by applicable law.

(f) In addition to any other rights or remedies available to the City under the terms of any agreement of a Contracting Party or under applicable law, the City shall have the following rights:

(1) The right, at the discretion of the Agency, to charge the Contracting Party for any amounts that the Contracting Party should have paid to the City for hours worked by Covered Employees pursuant to Section 12Q.3(a)(2) and (b), or to Covered Employees pursuant to Section 12Q.3(c)(2), together with simple annual interest of 10% on such amount from the date payment was due;
(2) The right, at the discretion of the Agency, to assess liquidated damages as provided in Section 12Q.5.1 and 12Q.5.2;
(3) The right, at the discretion of the Agency, to set off all or any portion of the amount that a Contracting Party is required to pay to the City pursuant to preceding Subsections (g)(1) and (2) against amounts due to a Contracting Party;
(4) The right, at the discretion of the Contracting Department, to terminate the Contract or Lease in whole or in part;
(5) The right, at the discretion of either the Contracting Department or the Agency, to bar a Contracting Party from entering into future Contracts or Leases with the City for three (3) years.
(6) The right to bring a civil action against the Contractor to pursue the remedies provided by this Chapter and other applicable law. The prevailing party shall be entitled to all costs and expenses, including reasonable attorney's fees.

(g) Each Contractor shall be responsible for its Subcontractors with respect to compliance with this Chapter. If a Subcontractor fails to comply, the City may pursue the remedies set forth in this Section against the Contractor based on the Subcontractor's failure to comply, provided that the Contracting Department has first provided the Contractor with notice and an opportunity to obtain a cure of the violation.

(h) Each Tenant shall be responsible for each Subtenant, Contractor and Subcontractor performing services on property covered by the Tenant's Lease, with respect to compliance with this Chapter. If any Subtenant, Contractor or Subcontractor fails to comply, the City may pursue the remedies set forth in this Section against the Tenant based on the Subtenant's, Contractor's or Subcontractor's failure to comply, provided that the Contracting Department has first provided the Tenant with notice and an opportunity to obtain a cure of the violation.

(i) Each of the rights set forth in this Section 12Q.5 shall be exercisable individually or in combination with any other rights or remedies available to the City. Any amounts realized by the City pursuant to this Section shall be used first to cover the costs of enforcing this Chapter and thereafter appropriated for the use of the Department of Public Health.

(j) The Agency may compromise and settle unlitigated claims against Contracting Parties for violations of contractual provisions required by this Chapter.

(k) All Contracting Parties and Contracting Departments shall cooperate fully with the Agency in connection with any investigation of an alleged violation of this Chapter or with any inspection conducted by the Agency.

(l) When this Chapter authorizes the Agency to charge interest (not to exceed 10%), in determining whether to charge the interest, the Agency shall give due consideration to the size of the Contractor's business, the Contractor's good faith, the gravity of the violation, and the history of previous violations.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001; Ord. 49-06, File No. 051908, App. 3/24/2006)

SEC. 12Q.5.1. ADDITIONAL CONTRACT REQUIREMENTS; LIQUIDATED DAMAGES.
Every Contract, Contract Amendment, Lease and Lease Amendment entered after January 1, 2006 shall contain provisions in which the Contracting Party agrees:

(1) To be liable to the City for liquidated damages as provided in this Section;

(2) To be subject to the procedures governing enforcement of a breach of the terms of a Contract, Contract Amendment, Lease or Lease Amendment which terms are required by this Chapter, as set forth in Section 12Q.5.2;

(3) That the commitment of Contracting Parties to comply with the requirements of this Chapter is a material element of the City's consideration for the agreement and that the failure of a Contracting Party to comply will cause significant and substantial harm to the City and the public, which is extremely difficult to determine or quantify, and that the liquidated damages set forth in this Section are reasonable amounts to pay for the harm caused by the Contracting Party's non-compliance;

(4) That for failure to comply with the requirements of this Chapter, the Agency may require the Contracting Party to pay the City liquidated damages of up to one hundred dollars ($100) for each one-week pay period for each employee for whom the Contracting Party has either not offered health plan benefits or made payments as required by Section 12Q.3. The Agency shall adjust this amount proportionately for Contracting Parties that use a pay period other than one week;

(5) That for any failure to provide reports to the City or access to pertinent records, or any failure to cooperate with any audit, inspection or investigation conducted by the Agency, the Agency may require the Contracting Party to pay the City liquidated damages of up to one thousand dollars ($1000); and

(6) That while liquidated damages in the maximum amounts set forth in this Section are a reasonable estimate of the harm caused by the Contracting Party's non-compliance with contractual provisions required by this Chapter, the Agency may determine that less than the full amount is warranted depending on the circumstances of each case. The Agency shall give due consideration to the following factors in determining the amount of liquidated damages: the size of the Contracting Party's business, the Contracting Party's good faith, the gravity of the violation, the history of previous violations, the failure to comply with record-keeping, reporting and anti-retaliation requirements, and the extent to which the imposition of liquidated damages would undermine the purpose of this Chapter by imposing unreasonable financial burdens on the Contracting Party, thereby restricting its ability to fulfill its obligations under this Chapter.

(Added by Ord. 49-06, File No. 051908, App. 3/24/2006)

SEC. 12Q.5.2. INVESTIGATION AND DETERMINATION OF VIOLATIONS.
(a) Determination of Violation. Upon determining that a Contracting Party may have violated the terms of a Contract, Contract Amendment, Lease or Lease Amendment required under this Chapter, the Agency shall send written notice to the Contracting Party of the possible violation and of the Contracting Party's right to respond to the Agency's initial determination by submitting pertinent documents and other information. The written notice shall also notify the Contracting Party that the Agency is authorized to direct the Controller to withhold payment otherwise due to the Contracting Party pursuant to the provisions of Subsection (d). If after providing the Contracting Party with a reasonable opportunity to respond to the allegations the Agency makes a final determination that a violation has occurred, the Agency shall provide a written notice of violation to the Contracting Party.

(b) Right to Appeal. The Contracting Party may appeal the Agency's final determination. The Contracting Party must file an appeal with the Agency in writing, specifying the basis for contesting the determination, no later than 15 days after the date of the notice of determination. Failure to file an appeal in writing with the Controller within 15 days shall cause the Agency's determination to be deemed a final administrative decision by the City.

(c) Administrative Hearing.

(1) Within 15 days after the Agency receives an appeal, the Controller shall appoint a hearing officer and shall notify the Agency and the Contracting Party.
(2) The hearing officer shall promptly set a date for a hearing. The hearing shall commence within 45 days of the notification of the appointment of the hearing officer and conclude within 75 days of such notification unless all parties agree to an extended period.
(3) The Agency shall have the burden of producing evidence that the Contracting Party has violated the requirements of this Chapter and the burden of proving the violation.

(d) Hearing Officer's Decision.

(1) Within 30 days of the conclusion of the hearing, the hearing officer shall issue a written decision affirming, modifying, or vacating the Agency's determination. If the hearing officer vacates the Agency's determination in its entirety, that decision shall also vacate any assessment of liquidated damages. If the hearing officer affirms the Agency's determination, the hearing officer shall issue a decision upholding the Agency's determination, including the amount of the liquidated damages assessed by the Agency. With respect to liquidated damages, the hearing officer's jurisdiction to modify the Agency's assessment is limited and the following procedures apply. If the hearing officer modifies the Agency's determination, the hearing officer shall transmit the decision to the Agency, which shall within five business days modify the assessment of liquidated damages consistent with the hearing officer's decision based on the criteria set forth in Section 12.Q.5.1(6) and transmit the modified assessment to the hearing officer. Upon receiving the modified assessment from the Agency, the hearing officer shall within three business days issue a final decision, which shall include the amount of the liquidated damages assessment as modified by the Agency.
(2) The hearing officer's decision shall consist of findings and a determination, which shall be final. The Contracting Party may seek review of the hearing officer's decision only by filing in the San Francisco Superior Court a petition for a writ of mandate under California Code of Civil Procedure, section 1094.5, as may be amended from time to time.
(3) The failure of the Controller or hearing officer to comply with the time requirements of this Section shall not cause the Controller or the hearing officer to lose jurisdiction over an appeal from the Agency's determination filed under this Section.
(4) Upon the hearing officer's decision affirming or modifying the Agency's determination, the Contracting Party shall take the corrective action, including the payment of liquidated damages, if any, within 14 days of receiving the hearing officer's decision. When a Contracting Party fails to take corrective action within the time required by the provisions of this Section, the City may immediately pursue all available remedies against the Contracting Party.

(e) Withholding of Payments by Controller.

(1) When the Agency sends notice to a Contracting Party of its final determination that the Contracting Party has violated the requirements of this Chapter and of the Contracting Party's right of appeal to the Controller, the Agency may direct the Contracting Department and the Controller to deduct from the payments otherwise due to the Contracting Party the amounts that the Agency has determined the Contracting Party must pay to the City under Section 12Q.3(a)(2) and as liquidated damages. The Controller, in issuing any warrant for any such payment, shall deduct the amounts specified by the Agency.
(2) The Controller shall withhold these funds until (A) the hearing officer issues a decision finding that the Contracting Party does not owe all or a portion of the amount withheld, in which case the Controller shall release funds to the Contracting Party consistent with the hearing officer's decision or (B) the Contracting Party consents to the use of the funds to pay the City the amounts that the Agency or hearing officer found due. As to any funds being withheld for which neither (A) nor (B) applies, the Controller shall retain the funds until the hearing officer's decision is no longer subject to judicial review, at which time the Controller shall distribute amounts owed under Section 12Q.3(a)(2) in the appropriate account for the use of the Department of Public Health and amounts due as liquidated damages in the General Fund, provided that this action is consistent with any final determination of a court of competent jurisdiction. Notwithstanding the provisions of this subsection, the Agency may authorize the release of payments withheld from the Contracting Party under this Section if the Agency determines that the continued withholding of funds imposes a substantial risk of endangering public health or safety, interfering with a service or project that is essential to the City, or having an unreasonable adverse financial impact on the City.

(Added by Ord. 49-06, File No. 051908, App. 3/24/2006)

SEC. 12Q.6. WAIVERS BY THE AGENCY DIRECTOR.
(a) The Agency Director or designee, in consultation with the Department of Public Health, shall waive the requirements of this Chapter when the Contracting Department has provided justification to the Agency Director, and the Agency Director has found that one of the following circumstances exists:

(1) The needed service, project or property arrangement under the Contract or Lease is available only from a sole source;
(2) Pursuant to Chapter 6 or 21 of the Administrative Code, the Contract or Lease is necessary to respond to an emergency that endangers the public health or safety;
(3) There are no qualified responsive bidders or prospective vendors or tenants that comply with the requirements of this Chapter and the agreement is for a service, lease or project that is essential to the City or the public;
(4) The public interest warrants the granting of a waiver because application of this Chapter would constitute an adverse impact on services or an unreasonable adverse financial impact on the City; or
(5) (A) The services to be purchased are available under a bulk purchasing arrangement with a federal, state or local governmental entity;

(B) Purchase under such arrangement will substantially reduce the City's cost of purchasing such services; and

(C) Purchase under such an arrangement is in the best interest of the City or the public.

(b) Each waiver shall be effective for the duration of the Contract or Lease. Subsequent waivers may be requested and either granted or denied.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001; Ord. 49-06, File No. 051908, App. 3/24/2006)

SEC. 12Q.7. SPECIAL WAIVER BY THE PUBLIC UTILITIES COMMISSION.
The General Manager of the Public Utilities Commission may waive the requirements of this Chapter where the Contractor or Subcontractor is providing to or on behalf of the San Francisco Public Utilities Commission services relating to:

(a) The provision, conveyance or transmission of wholesale or bulk water, electricity or natural gas; or

(b) Ancillary requirements such as spinning reserve, voltage control, or loading scheduling, as required for ensuring reliable services in accordance with good utility practice; provided, however:

(1) The purchase of such services may not practically be accomplished through the City's standard competitive bidding procedures; and
(2) The Contractor or Subcontractor is not providing direct, retail services to end users within the geographic boundaries of the City.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

SEC. 12Q.8. WAIVER THROUGH COLLECTIVE BARGAINING.
All or any portion of the applicable requirements of this Chapter may be waived in a bona fide collective bargaining agreement, provided that such waiver is explicitly set forth in such agreement in clear and unambiguous terms.

(Added by Ord. 49-06, File No. 051908, App. 3/24/2006)

SEC. 12Q.9. PREEMPTION.
Nothing in this Chapter shall be interpreted or applied so as to create any power or duty in conflict with any Federal or State law.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001; Renumbered by Ord. 49-06, File No. 051908, App. 3/24/2006)

SEC. 12Q.10. EFFECTIVE DATE.
This Chapter shall become effective, and its requirements shall be included in all covered Contracts, Subcontracts, Leases and Subleases, 30 days after it is adopted or July 1, 2001, whichever occurs later. This Chapter is intended to have prospective effect only.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001; Renumbered by Ord. 49-06, File No. 051908, App. 3/24/2006)

SEC. 12Q.11. PERIOD OF SUSPENSION.
Contracting Parties shall not be required to provide any of the Health Care Accountability Components provided in Section 12Q.3 to their Covered Employees until such time as the Health Director has prepared, and the Health Commission has approved, minimum standards for health plan benefits pursuant to Section 12Q.3(a)(1). The Health Director and Health Commission shall proceed promptly to take these actions. From the date upon which the Health Commission approves such minimum standards forward, Contracting Parties shall provide the Health Care Accountability Components set forth in Section 12Q.3 to their Covered Employees.

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001; Renumbered by Ord. 49-06, File No. 051908, App. 3/24/2006)

SEC. 12Q.12. SEVERABILITY.
If any part or provision of this Chapter, or the application of this Chapter to any person, location or circumstance, is enjoined or held invalid by a court of law, the remainder of this Chapter, including the application of such part or provisions to other persons, locations or circumstances, shall not be affected by such action and shall continue in full force and effect. To this end, the provisions of this Chapter are severable. Further, to the extent Section 12Q.3(a)(2) may be enjoined or held invalid by a court of law, the Contracting Party may alternatively comply in accordance with Section 12Q.3(c)(2).

(Added by Ord. 116-01, File No. 010848, App. 5/31/2001; Renumbered by Ord. 49-06, File No. 051908, App. 3/24/2006)

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