San Francisco Minimum Compensation Ordinance | San Francisco Employee Benefits Agency

City and County of San Francisco Minimum Compensation Ordinance

Any company with 5 or more employees and contracts with the City and County of San Francisco needs to be aware of the wage law that has been in effect for several years, and the recent amendment that now includes stricter enforcement. The Minimum Compensation Ordinance (MCO) covers most City service contractors as well as tenants at the San Francisco International Airport.  The law generally requires covered employers to provide to their covered employees:

  1. No less than the MCO hourly wage in effect:

For contracts entered into on or after October 14, 2017, the minimum hourly compensation rates effective July 1, 2019 are:

  • $17.66/hour – For-Profit entity
  • $16.50/hour – Non-profit entity
  • $16.50/hour – Public entity

For contracts in effect prior to October 14, 2017, the minimum hourly compensation rates effective July 2, 2019 are:

  • $15.59/hour for work performed within the City of San Francisco (SF Minimum Wage)
  • $10.77/hour for work performed outside of the City of San Francisco

Rates are subject to change, refer to the OLSE website for the most current information: www.sfgov.org/olse/mco

  1. 12 paid days off per year (or cash equivalent)

Time off allowed for vacation, sick leave, or personal necessity, and part-time employees are allocated paid days off on a prorated basis.

  1. 10 days off without pay per year.

Days off of for part-time employees are allocated on a prorated basis. The PTO accrual rate is 0.04615 hours per hour worked and can be used as vacation or sick leave. PTO hours are vested and can be cashed out at termination.
Other requirements:

  • The employer must post the Minimum Compensation Ordinance poster in a location where employees can read it easily.
  • Employees must be provided a Know Your Rights form for signature.

Failure to meet the requirements could result in penalties, with a look-back period of 10 years when a complaint is filed. If you are not in compliance and want to avoid penalties, there are options to minimize your liability. Any audit based on a complaint will include a review of your employee handbook and your payroll records.
To review the November 21, 2019 amended rules, Click Here.