What to do
1. Check if you need to file the labor compliance bond
You must file this bond if your project:
- Is considered Residential Group R
- Will construct, enlarge, alter, repair, improve, or convert a building (or part of a building)
- Creates or adds 10 or more residential or sleeping units
You do not have to file the bond if the project is residential development subject to any of the following:
- Local, state, or federal prevailing wage requirements
- A valid Project Labor Agreement
- A valid Community Workforce Agreement
Filing for Exemptions
A residential development project may be exempt if it is already subject to local, state, or federal Prevailing Wage Requirements, a valid Project Labor Agreement, or a valid Community Workforce Agreement.
If your project is tagged in the Department of Building Inspection's Permit Tracking System as being subject to the Residential Construction Wage Theft Prevention Ordinance Labor Compliance Bond, and you want to file for an exemption, the Project Owner should submit documentation that explains why the project is exempt directly to: OLSE.Laborbond@sfgov.org. The Office of Labor Standards Enforcement (OLSE) will review your documentation to confirm that your project is exempt under an eligible or valid:
- Prevailing Wage Requirement (local, state, or federal)
- Project Labor Agreement, or
- Community Workforce Agreement provision that is already in effect.
IMPORTANT: Only the Office of Labor Standards Enforcement can confirm exemption, and they will notify the Controller’s Office as to whether the Controller's Labor Compliance Bond station hold should be released.
Ordinance Amendment - April 21, 2023
On February 7, 2023, Supervisor Mandelman introduced a proposed amendment to the Residential Construction Wage Theft Prevention Ordinance that would not require projects to post the labor compliance bond until the issuance of the first construction document, and clarify that the ordinance does not apply to projects that submitted a building permit application or preliminary permit application pursuant to Government Code 65941.1 on or before June 6, 2022. The ordinance amendments passed on April 12, 2023 and the Mayor signed the ordinance on April 21, 2023. Please see File No. 230134 here.
2. Refer to labor compliance bond requirements
The minimum bond requirements depends on your project cost:
- Up to a $5 million project, secure a minimum $500,000 bond
- $5 million to $7.5 million project, secure a minimum $750,000 bond
- Between $7.5 million and $10 million project, secure a minimum $1 million bond
- More than $10 million project, secure a minimum $1.25 million bond
Splitting a project permit across two or more permits to circumvent this requirement shall not be allowed.
3. Secure your labor compliance bond or irrevocable standby letter of credit
Use a bond issuer with an AM Best Issuer Credit Rating of bbb- or better (Good, Excellent, Superior, or Exceptional) or a letter of credit issuer with an S&P, Moody’s, Fitch or Bauer Financial ratings of BBB-, Baa3, BBB-, 3 Stars or better, respectively.
The labor compliance bond or irrevocable standby letter of credit must:
- Name the City as exclusive beneficiary
- Include conditions that require the Owner holding the Bond to comply fully with all provisions of the RCWTO and acknowledge that the Bond or portions thereof may become payable to the City, to be used to satisfy a determination of violation of a City labor protection for work on the Project, under the conditions set forth in Police Code Section 3300O.5(d)
4. File the labor compliance bond with the Controller’s Office
You can mail the bond or deliver it in-person.
5. Acknowledgement Form
Once the bond is posted and permit is issued, an Acknowledgement Form must be signed, scanned, and submitted by Project Owner and all Covered Contractors with any required attachments to the Office of Labor Standards Enforcement at OLSE.email@example.com.
6. Request the release of the bond
To request release of the bond, no sooner than 90 days after the final Certificate of Completion and Occupancy or an amended Certificate of Completion and Occupancy, first the Project Owner and all Covered Contactors must sign, scan, and submit the Certification Form with any required attachments to the Office of Labor Standards Enforcement at OLSE.firstname.lastname@example.org.
7. Bond will be released
Provided all documents are complete and there are not open labor investigations by the Office of Labor Standards Enforcement or the State Division of Labor Standards Enforcement on a project, the bond will be released.
In May of 2022, the City approved a new law to ensure construction workers receive their full wage. Read FAQs from the Office of the Controller for more information.
- Labor Compliance Bond Form
- Labor Compliance Irrevocable Standby Letter of Credit Template
- FAQs for the RCWTPO (10/14/2022)
- Contractor Acknowledgement Form
- Contractor Certification Form
- Project Owner Acknowledgement Form
- Project Owner Certification Form
- Contact the Controller’s Office using NextRequest
- Email: CON.LaborBond@sfgov.org
Last updated September 28, 2023