San Francisco’s local hire ordinance could be expanded 

click to enlarge San Francisco-based Zendesk is expecting to hire several entry-level workers this year. - GETTY IMAGES FILE PHOTO
  • Getty Images File Photo
  • San Francisco-based Zendesk is expecting to hire several entry-level workers this year.

As tech-sector jobs explode in San Francisco, city officials are considering installing a local-hiring mandate for companies.

The idea for such a requirement follows the success of a 2-year-old local-hire law for city-funded construction projects and a multimillion-dollar investment in training residents for tech jobs.

Companies in the tech sector and other businesses that seek permits, government leases, the mid-Market Street tax break or other government benefits must participate in the First Source Hiring Program. Local-hire advocates say the program, dating to 1998, has various shortcomings.

Currently, businesses only have to show that they are making an effort to hire locals for a limited number of entry-level jobs. Companies are supposed to declare what their existing entry-level jobs are, determine openings and notify The City of those openings so people enrolled in city-funded job-training programs can go in for interviews. But there are no hiring mandates.

Supervisor John Avalos, who took the lead on the local-hire law for construction jobs, said overhauling First Source is on his “legislative agenda.” Avalos said that while tech would be included, he does not want to target only one industry. He said the program should “have some more teeth” and include hiring mandates. He noted that no company has ever been penalized for not adhering to First Source, suggesting there is little enforcement and unclear requirements.  

Joshua Arce, executive director of the local nonprofit Brightline Defense, which helped champion Avalos’ 2010 law, said “good faith” efforts don’t get the job done. He said First Source suffers from a “vague and ambiguous” definition of entry-level jobs. It hasn’t changed since the program’s inception — “those non-managerial positions that require either no education above a high school diploma (or equivalency) or no more than two years of specific training or work experience.”

As San Francisco is investing millions of dollars into training a local workforce to be employable by tech companies, Arce said that “to guarantee as many jobs as possible for folks coming out of these training programs, we ought to take a look at reforming First Source.”

Rhonda Simmons of the Office of Economic and Workforce Development acknowledged that making changes to First Source is “worth examining.”

“It’s a different economy now than in ’96 in many regards,” Simmons said. The City’s program was launched in 1998 based on the 1996 federal Personal Responsibility and Work Opportunity Act.

It might be difficult for tech companies to meet hiring mandates since they seek to hire the most highly skilled workers and have dynamic business models. Twitter’s First Source application for the mid-Market tax break on new hires for the 2012 tax year lists eight entry-level coordinator jobs currently filled, such as event coordinator and office coordinator, and in the next 12 months six more will open up. Zendesk’s application reports 18 entry-level customer advocates with four available slots and 10 more to open within a year.

The local-hire mandate for construction is by most accounts a success. In the first year of the law, 34 percent of city-funded construction jobs went to residents. The law requires that 20 percent of the jobs are hired out to locals in the first year, increasing to 50 percent over time.

Avalos said talks have only just begun and the effort could take as long as a year.

One city job training effort in the new tech economy is TechSF. The first class of 75 unemployed residents 18 years and older will graduate in April, and Simmons hopes they will be placed in jobs by then.  

“Of course you’d want to have a guarantee,” Simmons said. “But that’s not what we have right now.”

jsabatini@sfexaminer.com

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