New York City Enacts Fair Workweek Legislation for Retail and Fast Food Employers

Mayor de Blasio recently signed into law five bills collectively called the “Fair Workweek” legislative package, which will significantly impact employers in the retail and fast food industries. The laws are scheduled to take effect on November 26, 2017 – just after Thanksgiving.

The New Laws Aim to Provide Predictable Schedules and Paychecks to Retail and Fast Food Workers

The Fair Workweek legislation amends the administrative code of the City of New York, and aims primarily at providing predictable schedules and paychecks for employees in the retail and fast food industries. The City’s Office of Labor Policy and Standards (OLPS), part of the Department of Consumer Affairs (DCA), will be responsible for enforcement.

New York is not the first city to implement such legislation – San Francisco was first to do so in 2015, and Seattle followed suit in 2016. In June 2017, the state of Oregon passed such a bill which is expected to be signed by Governor Kate Brown in the coming weeks. Other jurisdictions considering scheduling laws include Albuquerque, N.M., San Jose, Calif., Washington, D.C., Chicago, Ill., and the states of California, Connecticut, Illinois, Indiana, Maine, Minnesota, New York, and Rhode Island.

The New Laws Capture Sufficiently-Sized Retailers and Fast Food Establishments

The term “retail employer” is defined as any employer in the “retail business,” which is “any entity with 20 or more employees that is engaged primarily in the sale of consumer goods at one or more stores within the city.” For stores in a retail chain, the total number of employees in the group of establishments is counted towards the 20 employee threshold.

The term “fast food establishment” is defined as “any establishment: (i) that has as its primary purpose serving food or drink items; (ii) where patrons order or select items and pay before eating and such items may be consumed on the premises, taken out or delivered to the customer’s location; (iii) that offers limited service; (iv) that is part of a chain; and (v) that is one of 30 or more establishments nationally.”

For purposes of the laws governing work schedules and shifts at fast food establishments, the definition of “fast food employee” excludes salaried employees. For purposes of the law permitting pay deductions for not-for-profit organizations, the definition of “fast food employee” does not exclude salaried employees.  Further, salaried employees are not excluded from the definition of “retail employee.”

What the New Laws Require:

The legislative package consists of the following five bills:

Introduction 1387-A prohibits “on-call scheduling” for retail employees. Specifically, it:

• Prohibits employers from scheduling an employee for an on-call shift;
• Prohibits employers from canceling a shift with fewer than 72 hours’ notice;
• Prohibits employers from requiring an employee to work with fewer than 72 hours’ notice (unless the employee consents in writing); and
• Prohibits employers from requiring an employee to contact the employer to confirm whether they are scheduled to work within 72 hours before the start of the shift.

There are limited exceptions to the scheduling rule: the law permits scheduling changes within 72 hours of a shift to allow the employee time off or to trade shifts with another employee, or if the employer cannot begin or continue operations due to specifically enumerated reasons.

These provisions do not apply to employees covered by a collective bargaining agreement if they are expressly waived in the agreement and the agreement addresses employee scheduling. Further, for employees who are covered by such collective bargaining agreement, the law takes effect upon the expiration of the collective bargaining agreement.

The law focuses primarily on providing employees with at least 72 hours’ notice of when they need to report to work. Retail employers are required to provide employees with a written work schedule and to post the schedule in a location accessible to all employees at least 72 hours in advance. If there are changes to the schedule, the employer will be required to update the schedule and notify affected employees. Further, if the employer regularly uses electronic means to communicate scheduling information, then it will be required to distribute the schedule to employees electronically.

Introduction 1388-A bans the practice of requiring employees of fast food restaurants to work consecutive shifts closing and opening the establishment (dubbed “clopenings”) when there are fewer than 11 hours between shifts, unless an employee has requested or consented in writing to work such shifts. In those instances, Employers still must pay employees an additional $100 for working such a shift.

Introduction 1395-A requires fast food employers to offer regular or on-call shifts to existing employees before hiring new employees. The law requires employers to post and provide electronic notice to employees identifying:

• the number of shifts being offered;
• the schedule of the shifts;
• whether the shifts will occur at the same time each week;
• the length of time such fast food employer anticipates requiring coverage of the shifts;
• the number of fast food employees needed to cover the shifts;
• the process, date and time by which fast food employees may notify such fast food employer of their desire to work the shifts;
• the criteria such fast food employer will use for the distribution of the shifts;
• an advisement that a fast food employee may accept a subset of the shifts offered but that shifts will be distributed according to the criteria described in the notice; and
• an advisement that while fast food employees working at all locations owned by the fast food employer may accept offered shifts immediately, shifts will be distributed first to fast food employees currently employed at the location where the shifts will be worked.

If no employee accepts the available shifts within three calendar days of the offer or before the start of such shifts, the employer may hire new employees as necessary to perform the work.

Introduction 1396-A sets forth general provisions governing fair work practices and requires fast food employers to provide advance notice of work schedules to employees. Specifically, it requires employers to provide employees upon hire with an estimate of their work schedule and regular work schedules outlining their shifts with 14 days’ advance notice, including all regular and on-call shifts that the employee will be required to work. Further, it requires employers to pay various premiums when it makes schedule changes. Finally, the law requires employers to retain records documenting their compliance for a period of three years.

If a fast food employer makes a schedule change with less than 14 days’ notice, the employee will be entitled to a schedule change premium according to the following:

• If the change is made with less than 14 days’ notice, but at least seven days’ notice, $10 for each instance where additional hours or shifts are added or the date or start or end time of a shift is changed with no loss of hours;
• If the change is made with less than 14 days’ notice, but at least seven days’ notice, $20 for each instance where hours are subtracted from a shift or a shift is cancelled;
• If the change is made with less than seven days’ notice, $15 for each instance where additional hours or shifts are added or the date or start or end time of a shift is changed with no loss of hours;
• If the change is made with less than seven days’ notice but at least 24 hours’ notice, $45 for each instance in which hours are subtracted from a shift or a shift is cancelled; and
• If the change is made with less than 24 hours’ notice, $75 for each instance in which hours are subtracted from a shift or a shift is cancelled.

These penalties will not apply if the employee requests the change in writing or trades shifts with another employee; if the employer is required to pay overtime for the shift; or if an event occurs which prohibits the employer’s ability to operate.

The OLPS may impose civil penalties of $500 for the first violation and up to $1,000 for multiple violations. An employee may also file a private civil action within two years of an alleged violation for damages and attorneys’ fees.

Introduction 1384-A requires to deduct voluntary contributions from a fast food employee’s paycheck and remit them to a not-for-profit designated by such fast food employee. Such deductions require authorization from the employee, including receipt of a registration letter pertaining to the relevant not-for-profit. The authorization may be in writing or electronic form and shall include:

• the employee’s signature;
• name and physical address;
• the amount, frequency and start date of the contribution;
• the name, physical address, email address, web address, if any, and phone number of the not-for-profit and a contact for an employee who seeks to revoke authorization; and
• a statement notifying the fast food employee that contributions are voluntary and that the authorization is revocable at any time by submitting a written revocation to the not-for-profit.The purpose of this law is to make it easier for workers to provide financial support to non-profit organizations of their choice that may be working on behalf of their interests. Employers are required to begin deductions no later than the first pay period after 15 days of receipt of the authorization. Labor organizations are not eligible to receive remittance.Fast food employers who fail to make deductions and remittances after receiving authorization will be subject to civil penalties of up to $500 for each violation and up to $1,000 for repeated violations. Additionally, an aggrieved employee may file a claim for compensatory and punitive damages as well as reasonable attorneys’ fees and costs.

Notice and Recordkeeping Requirements

Employers are required to post a notice advising employees of their rights under the laws in an area accessible to employees at any job site where an employee works. The notice must be in English and any language that is the primary language of at least five percent of employees, if the notice is available in that language. The DCA will develop and make notices available.

The law also requires employers to retain records documenting compliance with the law for three years. Failure to maintain these records may give rise to a presumption that the employer violated the law.

No Retaliation

The legislation also makes it unlawful for employers to take adverse action against an employee for exercising his or her rights under these laws. Adverse action includes “threatening, intimidating, disciplining, demoting, suspending or harassing an employee, reducing the hours or pay of an employee, informing another employer that an employee has engaged in activities protected by this chapter, and discriminating against the employee, including actions related to perceived immigration status or work authorization.”

Enforcement

The OLPS will have the authority to enforce the legislation by seeking remedies in the form of the penalties specified in the laws. In addition, New York City’s Corporation Counsel may an action or proceeding as necessary to secure compliance with the scheduling laws, including actions for injunctive relief. Finally, the legislation provides a private right of action for any person, including any organization, to sue for violations of its provisions.

Takeaways

Employers in the fast food and retail industries should begin by taking the following steps to prepare for November:

• Create or modify existing hiring, scheduling, pay, and leave policies and procedures to ensure they comply with the law. For example, make sure to update your offer letters to include language regarding the new hire’s expected number of shifts per month and the days and hours of those shifts.
• Update recordkeeping processes and procedures to retain notice of schedules, changes to those schedules, and written offers of additional hours, among other records the law requires employers maintain.
• Stay tuned for the release of the rights notice that you will have to post in the workplace. Also stay tuned for any additional guidance the OLPS may release in its efforts to enforce this law.
• Train management about the new notice and scheduling requirements and the anti-retaliation provision, and the payroll department or provider regarding the new deduction protocols. Management’s comprehension of these new obligations is central to avoiding or controlling the amount of fees or penalties owed to employees.
• Perhaps most importantly, work with key decisionmakers to analyze your company’s scheduling processes and procedures.
• Finally, use this as an opportunity to ensure compliance with New York City’s other employee-friendly laws.

While the above provides an overview, do not hesitate to contact your employment counsel with specific questions.

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