Discussion and Possible Action to Introduce Service Worker Retention Ordinance
Christine Velasquez, Economic Development Manager
October 6, 2026
2City of Sunnyvale – Service Worker Retention Ordinance – October 2026 Council Direction on September 20, 2025
Direct Staff to coordinate a Service Worker Retention Ordinance with the following:
• Clarify how ordinance applies to federal contracts or to businesses that have the Federal Government as a client or a funding source;
• Apply the ordinance to businesses with over 50 employees; • Clarify for-cause termination provisions;
• Conduct outreach to business and labor groups;
• Return to Council within one year with the draft ordinance; and • Contract Threshold for building and/or food services to $50,000 or more 3City of Sunnyvale – Service Worker Retention Ordinance – October 2026 What is a Worker Retention Ordinance?
Requires successor
contractors to
retain existing
employees for 90
days
Purpose: worker
stability, service
continuity,
institutional
knowledge
Typically adopted
in large cities
with convention
centers/event
facilities
4City of Sunnyvale – Service Worker Retention Ordinance – October 2026 Businesses Labor Organizations
Stakeholder Feedback
• Reported that they already implement worker
retention practices during vendor transitions
• Questioned the need for an SWRO given the
lack of identified worker-retention issues in
Sunnyvale
• Raised concerns about operational and
compliance burdens, increased business
costs, enforcement ambiguity and legal risk
• Raised concerns about impacts on small
businesses' ability to compete for contracts
• Supports an SWRO as additional protection for
service workers during contractor transitions
• Identified low-wage workers and workers of
color as particularly affected
• Stated that an SWRO could provide greater
employment stability and continuity of services
• Acknowledged that enforcement would occur
through legal remedies rather than City
enforcement
5City of Sunnyvale – Service Worker Retention Ordinance – October 2026 Staff Analysis
• No demonstrated problem in Sunnyvale
• Comparable jurisdictions with a similar ordinance do not report any activity around their ordinances
• The City has limited visibility into private service contracts • Enforced through private legal action rather than by the City • Stakeholder outreach reflected differing perspectives but did not identify a documented local problem
• The City would not have a direct role in monitoring or enforcing the ordinance
6City of Sunnyvale – Service Worker Retention Ordinance – October 2026 Staff’s Recommendation
ALTERNATIVES
1. Introduce a Service Worker Retention Ordinance as proposed
2. Introduce a Service Worker Retention Ordinance with modifications
3. Do not Introduce a Service Worker Retention Ordinance
4. Other Council Direction
No Recommendation