The Philadelphia Fair Workweek Ordinance: What Retail and Hospitality Employers Need to Know

We first wrote about Philadelphia’s Fair Workweek Employment Standards Ordinance shortly after it was signed into law on December 20, 2018. Now, with the Mayor’s Office of Labor having issued final regulations on February 3, 2020, and the ordinance having taken effect on April 1, 2020, we offer a brief overview of the ordinance along with additional information for retailers as they implement procedures to comply with the ordinance’s provisions. Enforcement of some aspects of the ordinance, such as its good-faith estimates requirement, will not go into effect until July 1, 2020. Furthermore, the City of Philadelphia has announced that due to the COVID-19 health emergency, it will not enforce the predictability pay provision of the ordinance until further notice.

Coverage

The ordinance applies to retail, hospitality, and food services establishments with 250 or more employees (full-time, part-time, or temporary) and 30 or more locations worldwide. Franchisees under separate ownership but part of the same chain business are grouped together for determining the number of employees and locations to meet the law’s minimum thresholds.

Notice and Posting Requirements

A covered employer is required to provide each new hire with a written, good-faith estimate of his or her work schedule. This good-faith estimate must contain (1) the average number of work hours the employee can expect to work each week over a typical 90-day period; (2) information as to whether the employee can expect to work any on-call shifts; and (3) a subset of days and times or shifts that the employee can typically expect to work (or days and times or shifts on which the employee will not be scheduled to work). On or before the commencement of employment, an employer must provide the newly hired employee with a written work schedule that runs through the last date of the currently posted schedule.

Additionally, the regulations imply that employers are required to provide current employees, not just new hires, with good-faith estimates, despite language in the ordinance that requires good-faith estimates only “upon hire.” Employers have until July 1, 2020, to provide existing employees with good-faith estimates. Providing good-faith estimates has been construed as a continuing obligation. If there is a significant change in an employee’s schedule (defined in detail in the regulations), the employer must provide a new good-faith estimate.

Advance Notice of Schedules

Written notice of the work schedule must be posted in a conspicuous and accessible location where employee notices are customarily posted. The schedule must include an employee’s shifts at that worksite and whether he or she is scheduled to work or be on call that week. The schedule must be posted no later than 10 days before the first day of any new schedule in 2020, and no later than 14 days before the first day of any new schedule in 2021.

An employer must provide notice of any proposed changes to the work schedule as promptly as possible and prior to a change taking effect, with the written work schedule itself being revised within 24 hours of making the change. Employees may decline to work any hours or additional shifts not included in the posted work schedule. However, employees may consent to work such hours or shifts, provided such consent is recorded by written communication.

Predictability Pay

Under the ordinance, an employee who works hours not included in the new employment notice or subsequent posted work schedule is entitled to predictability pay in addition to his or her regular pay for hours actually worked. When the employer’s change in hours does not result in lost hours, the predictability pay will be one hour of pay at the employee’s regular rate of pay. When the employer’s change results in hours being subtracted or a shift or shifts being cancelled, the predictability pay will be no less than one-half times the employee’s regular rate of pay per hour for any hours he or she does not work.

The law specifies that an employee will not be paid predictability pay when (1) the employee him- or herself requests a shift change in writing; (2) a schedule change arises from a mutually agreed-upon shift trade between employees; (3) the employer’s operations are interrupted by threats to employees or property, failure of a public utility, the shutdown of public transportation, natural disaster, a declared state of emergency, or severe weather conditions; (4) a de minimis 20 minute or less change exists for beginning or ending a scheduled shift; (5) an employee volunteers to work additional hours in response to a mass written communication from the employer about the availability of additional hours; (6) hours are subtracted due to a termination of employment or for other disciplinary reasons; (7) changes are made to the posted work schedule within 24 hours of the required advance notice; or (8) changes are required for a ticketed event or hotel banquet event outside the employer’s control.

Rest Between Work Shifts

An employee may decline any work hours that are scheduled or otherwise occur less than nine hours after the end of the previous day’s shift or during the nine hours following the end of a shift that spans two days.

Offers of Work to Existing Employees

The ordinance requires work shifts to be offered to existing employees before hiring new employees. The employer must provide written notice of available work shifts for at least 72 hours, unless a shorter period is necessary in order for the work to be timely performed. The notice must be posted similar to other employer notices under the new law, and as described in the regulations it must contain the following information: (1) available work shifts or days and times employees must be available to work; (2) the length of time the employer anticipates requiring coverage of the additional hours; (3) a description of the position; (4) required qualifications for the position; (5) the process by which employees may notify the employer of their desire to work the offered hours; and (6) if the notice is being posted for less than 72 hours, a statement that the employer has less than 72 hours to fill an open shift. With some limitations, the employer may assign the work to those existing employees qualified to perform the work, as determined by the employer in good faith. The law’s requirement to offer work to existing employees first does not, however, require employers to do so if premium pay would be required under state or federal law.

Recordkeeping

Employers must retain records demonstrating compliance with the law for a period of two years. Further, upon request by any employee, the employer must provide the employee with work schedules in writing for all employees at the location for any previous week for the past two years, including the originally posted work schedules and any modified versions.

Enforcement

As with most employment laws, the ordinance protects employees from retaliation. But the ordinance’s retaliation provision makes clear that it extends to any person who mistakenly, but in good faith, alleges a violation of the law. Further, the law creates a rebuttable presumption of retaliation for any adverse action taken against an employee within 90 days of the employee’s exercise of rights protected by the law.

An employee or any other person may file a complaint for violations of the law with the agency to be specified by the mayor. The complaint must be filed within two years of the date the person knew or should have known of the alleged violation. Separately, any person may file a complaint in a court of competent jurisdiction within the same two-year limitations period. Exhaustion of administrative remedies is not required. Unions and business competitors may fall within the meaning of “other persons” under the enforcement mechanism of the law.

The remedies available under the new law include actual wages and benefits lost; liquidated damages in an amount equal to actual damages, up to a maximum of $2,000; and reasonable attorneys’ fees and costs. The regulations include the amount the City of Philadelphia may collect in civil penalties for violations of each section:

• For a written estimate that is incomplete or lacks a good-faith basis, $200 per impacted employee
• For an employer’s failure to provide a written work schedule, $50 per impacted employee for each pay period in which the violation occurs or continues
• For an employer’s failure to promptly notify an employee of changes to the posted work schedule, $25 per impacted employee for each pay period in which the violation occurs or continues
• For an employer’s failure to obtain written consent for added work hours, $100 per impacted employee for each pay period in which the violation occurs or continues
• For an employer’s failure to provide written notice of available work hours, $50 per impacted employee for each pay period in which the violation occurs or continues
• For an employer’s failure to provide written notice of its policy for distributing work hours, $50 per impacted employee for each pay period in which the violation occurs or continues
• For an employer’s failure to award available work hours to existing employees, $1,000 per impacted employee for each pay period in which the violation occurs or continues

The regulations also state that the Mayor’s Office of Labor reserves the right to impose triple damages for employers found to be repeat offenders.