Client Bulletins
New York City retailers, get ready to change your employee scheduling practices

Client Bulletin #620
June 15, 2017

In an apparent effort not to be outdone by the cities of San Francisco and Seattle, the New York City Council has approved a package of bills that are collectively being referred to as the “Fair Work Week” laws. Fairness, like beauty, however, is in the eye of the beholder, and it is not likely that many NYC employers subject to these new employee scheduling requirements will think the requirements are very fair. Nonetheless, Mayor Bill de Blasio has signed the legislation into law, with an effective date of November 26, which is 180 days out from his signature. Barring a successful court challenge by employers or employer associations, or the long shot of the enactment of a state law that would preempt or otherwise derail the NYC requirements, affected employers will have to start dealing with these new requirements right after Thanksgiving as they head into the very busy holiday retail season.

Which employers must comply?

“Retail” and “fast food establishments” in NYC are the focus of the new requirements. The definition of “fast food establishment” that was used in the New York State fast food minimum wage requirements was used here. Thus, if you are a fast food establishment located in NYC and are subject to the state fast food minimum wage law, then you are covered by the NYC Fair Work Week requirements applicable to fast food employers. Similarly, the definition of a “retail business” includes an establishment with 20 or more employees engaged primarily in selling consumer goods at one or more stores located within NYC. “Consumer goods” are broadly defined, as is the counting of employees to include all full-time, part-time, and temporary employees. The scheduling requirements for retail employers and fast food employers are different, but they are both going to be very onerous. The scheduling requirements applicable to fast food employers are more extensive and a bit more complicated.

Retail employers

The legislation applicable to retail employers is here. On-call scheduling will be prohibited. Thus, it will be unlawful for a retail employer to require an employee to remain available to work if needed, to check in on whether to report to work, or to wait to be contacted by the employer about reporting to work. It will also be unlawful for a retail employer to cancel an employee’s shift, or require an employee to report for unscheduled work, with less than 72 hours’ notice. (The 72-hour requirement can be waived if the employee provides written consent.)

Written work schedules must be posted in the workplace at least 72 hours before the beginning of the earliest shift on the schedule. Changes, if any, to the posted schedule must be updated on what is posted, and affected employees must be directly notified, including by electronic means if such procedures are normally used for communicating work schedules.

Somewhat oddly, the law requires retail employers, upon request, to provide an employee with a written copy of that employee’s work schedule for any week the employee worked during the prior three years, along with a copy of the most current work schedule for all retail employees at that work location.

The new scheduling requirements will not prohibit retail employers from allowing employees to swap shifts by agreement or granting employee requests for time off, but documentation supporting such requests will be needed. Additionally, the 72-hour notice requirement will not apply if the employer cannot operate due to emergencies, such as natural disasters, public utility or public transportation outages, fires, floods, or declared states of emergency.

Fast food employers

The primary legislation applicable to fast food employers is here. The fast food scheduling requirements apply to non-salaried fast food employees whose duties include customer service, cooking, food or drink preparation, delivery, security, stocking supplies or equipment, cleaning, or routine maintenance. Employers will be required to furnish upon hire a written good faith estimate of the employee’s expected work schedule. The good faith estimate must be updated if a long-term change to the expected schedule, or a change of indefinite duration, is made. Additionally, fast food employers will be required to furnish written work schedules to new employees before they begin working that cover at least a seven-day period. Subsequently, the work schedule must be furnished in writing at least 14 days before the first workday on the schedule.

WHAT IS A “FAST FOOD ESTABLISHMENT”
COVERED BY THE LAW?

  • Primary purpose is to serve food or drink items, and
  • Patrons order or select items and pay before eating, and
  • Food and drink may be consumed on premises, taken out, or delivered, and
  • Limited service is offered, and
  • Part of a chain, and
  • One of 30 or more establishments nationally, including
    • An integrated enterprise that owns or operates 30 or more such establishments nationally, or
    • A franchise in which the franchisor and franchisee own or operate 30 or more such establishments nationally.

Establishments that meet these criteria but are located within non-fast food establishments are still covered.

If changes are made to the published work schedule, the employer must make premium payments to the affected employees as follows:

  • $10 for each change to the work schedule where at least 7, but less than 14, days’ notice is provided, and hours or shifts are added, or the date or start or end time of a shift is changed with no loss of work hours.
  • $15 for each change to the schedule where less than 7 days’ notice is provided, and hours or shifts are added, or changes as noted above are made, with less than 7 days’ notice.
  • $20 for each change to the schedule where at least 7, but less than 14, days’ notice is provided, and work hours are removed from a shift or a shift is cancelled.
  • $45 for each change to the schedule where at least 24 hours’, but less than 7 days’, notice is provided, and work hours are removed from a shift or a shift is cancelled.
  • $75 for each change to the schedule where less than 24 hours’ notice is provided, and work hours are removed from a shift or a shift is cancelled.

These premium payments must be paid when wages are due and payable for work performed during the week to which the change applied, and must be detailed separately on the employee’s wage statement. The premiums do not have to be paid where the employer is not able to begin or continue its operations due to emergencies such as fire, flood, natural disaster, utility or public transportation outage, or a declared state of emergency. Finally, the premiums do not have to be paid if the scheduling change was due to the employee’s written request, the affected employees agreed to switch shifts, or the change resulted in the affected employee’s receipt of overtime pay.

Fast food employers are also prohibited from requiring covered employees to work a closing shift followed by the opening shift the next day, where the two shifts are separated by less than 11 hours. There is an exception to this prohibition where the affected employee requests or consents in writing to work the two shifts, but the employee must be paid a $100 premium for each such instance.

Fast food employers will also be required to notify existing employees of, and offer them, additional available shifts, before hiring new employees to fill those shifts. This requirement will not apply if the existing employees would be eligible for overtime pay if they accepted the additional shifts, nor does it apply if all current employees have rejected the additional available work hours.

Finally, fast food employers will be required to set up a payroll deduction process by which their employees can request that voluntary deductions be withheld from their wages and paid over to certain non-profit organizations of their choosing. Although labor organizations are excluded, the non-profits can include employee advocacy groups, such as those that had a hand in lobbying for the Fair Work Week legislation.

Recordkeeping and enforcement

As with almost all wage and hour requirements, these new NYC measures come with recordkeeping requirements to support investigative efforts to measure compliance. A new city office of labor standards is to be created as a result of the Fair Work Week package of bills. Posters detailing the rights and obligations under these new requirements will be published and will be required to be posted in covered workplaces. Covered employers will be required to maintain records for at least three years to prove compliance with the scheduling requirements, and for at least two years to prove compliance with the voluntary payroll deduction/contribution requirements.

The legislation provides for three means of enforcement – private right of action, administrative enforcement by the new city agency, or court actions filed by the NYC office of corporation counsel. The new city agency can also conduct compliance investigations that can be either complaint-driven or random. And, like almost all employment statutes, it is unlawful for an employer to retaliate against an employee attempting to exercise rights under this legislation.

Where do NYC retail and fast food employers go from here?

Covered NYC employers have a little less than six months until the November 26 effective date. Thus, absent legal action that effectively blocks, enjoins or vacates the NYC Fair Work Week laws, covered employers will have to start evaluating how to comply with these rather inflexible and burdensome scheduling requirements. Compliance with the new recordkeeping requirements will also have to be carefully considered, particularly as it relates to maintaining records of work schedules, which is not a requirement of the Fair Labor Standards Act. Fast food employers will also need to consider the payroll implications and the need to be able to separately detail schedule change premiums paid on wage statements. As always, feel free to contact the Constangy lawyer of your choice for further information or assistance on these new requirements.

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