NYC’s “Fair Workweek” Package Set to Cause Major Disruption and Headaches for Retail and Fast Food Employers

Scheduling employees in retail and fast food establishments will now be a costly and confusing obstacle for employers. On May 30, 2017, New York City Mayor Bill de Blasio signed into law a legislative package consisting of five bills, collectively dubbed the “Fair Workweek” legislation. The legislation amends the New York City Administrative Code, Title 20, Section 1, Chapter 12, and imposes significant constraints on fast food and retail employers throughout New York City. The Fair Workweek legislation aims to ensure predictable paychecks and work schedules by imposing restrictions on retail and fast food employers. As is now common in New York City, the Fair Workweek legislation includes strict notice and recordkeeping requirements, and sets forth methods of enforcement, penalties, damages, and fines for failure to comply. The Office of Labor Policy and Standards (OLPS) within the New York City Department of Consumer Affairs (DCA) has been tasked with enforcing the new legislation, which will take effect on November 26, 2017. Where employees are covered by a valid collective bargaining agreement on the effective date of the law, the law will not apply until termination of the collective bargaining agreement.

The Fair Workweek package consists of five separate bills: Int 1384-2016, Int 1387-2016, Int 1388-2016, Int 1395-2016, and Int 1396-2016. Int 1387-2016 applies only to retail establishments, and prohibits on-call scheduling for employees while requiring that employers provide advance notice of work schedules to employees. Int 1384-2016, Int 1388-2016, and Int 1395-2016 apply to fast food establishments. Int 1396-2016 sets forth general provisions and definitions applicable to both fast food and retail employers. 

Legislation Applicable to Retail Employers

Int 1387-2016 (On-Call Scheduling)

Int 1387-2016, which is part of the Fair Workweek package, applies to retail employers and provides retail employees with a more predicable paycheck and work schedule by requiring advanced scheduling and prohibiting “on-call” scheduling.

The law specifically prohibits “on-call” scheduling. With limited exceptions, a retail employer may not: 

• schedule a retail employee for any on-call shift;
• cancel any regular shift for a retail employee within 72 hours of the scheduled start of such shift;
• require a retail employee to work with fewer than 72 hours’ notice, unless the employee consents in writing; or
• require a retail employee to contact a retail employer to confirm whether or not the employee should report for a regular shift fewer than 72 hours before the start of such shift.

Notwithstanding the above, a retail employer may:

• grant a retail employee time off pursuant to an employee’s request;
• allow a retail employee to trade shifts with another retail employee; and
• make changes to retail employees’ work schedules with less than 72 hours’ notice if the employer’s operations cannot begin or continue due to:
  • threats to the retail employees or the retail employer’s property;
  • the failure of public utilities or the shutdown of public transportation;
  • a fire, flood, or other natural disaster; or
  • a state of emergency declared by the president of the United States, governor of the state of New York, or mayor of the city of New York.

In addition, a retail employer is required to provide employees with a written work schedule no later than 72 hours before the first shift on the work schedule. The schedule must be conspicuously posted in a location that is accessible and visible to all retail employees at the work location at least 72 hours before the beginning of the scheduled hours of work and, if changed, the employer must update the schedule and directly notify affected retail employees of the changes to the work schedule. Retail employers shall also transmit the work schedule by electronic means, if such means are regularly used to communicate scheduling information.

For purposes of the law, a “retail employer” is defined as any employer that employs a retail employee at a retail business with 20 or more employees that is engaged primarily in the sale of consumer goods at one or more stores within the city. For the purposes of this definition, “consumer goods” means products that are primarily for personal, household, or family purposes, including but not limited to appliances, clothing, electronics, groceries, and household items. However, certain exceptions apply to union employers. 

Retail employers must be sure to keep copies of all schedules. At the request of an employee, a retail employer shall provide the employee with his or her work schedule in writing for any week worked within the prior three years and the most current version of the work schedule for all retail employees at that work location, whether or not changes to the work schedule have been posted.

Legislation Applicable to Fast Food Employers

Three of the bills within the Fair Workweek legislation apply solely to fast food establishments. The key pieces of each bill are as follows. 

Int 1388-2016 (“Clopenings”)

Fast food employers are prohibited from requiring employees to work “clopening” shifts without additional compensation. A “clopening” shift is a closing shift followed by an opening shift. As such, a fast food employer is not permitted to schedule an employee to work 2 shifts with fewer than 11 hours between the end of the first shift and the beginning of the second shift when the first shift ends the previous day or spans two days. However, an employer may schedule an employee to work “clopening” shifts if they compensate the employee an additional $100 above and beyond earned wages. Importantly, an employer is not required to pay an employee the additional $100 if that employee voluntarily consents or requests in writing to work the “clopening” shift.

Int 1395-2016 (Access to Hours)

Fast-food employers must offer regular or on-call shifts to current employees before transferring employees from other locations or hiring new employees, including through the use of subcontractors. The employer must offer the additional shifts to current employees at all fast food establishments owned by the employer before hiring additional employees. 

When additional shifts become available, a fast food employer must post a notice to employees with the following information: 

1. The total available shifts
2. The schedule of available shifts
3. Whether those shifts occur at the same time each week
4. The length of time the employer needs coverage
5. The process, date, and time by which fast food employees may notify the employer of their desire to work the shifts
6. The criteria the employer will use to distribute the shifts
7. A notice that an employee may accept a subset of shifts but that the shifts will be distributed according to the criteria in the notice
8. A notice that shifts will first be distributed to employees currently employed at the location where the shifts will be worked.

This notice must be posted for three consecutive calendar days in a conspicuous and accessible location where notices are customarily posted. It must also be sent electronically. The employer may distribute the additional shifts to employees from other locations or hire/contract for new employees as necessary to perform the work if: (1) no employee at the location where the shifts are offered accepts the shifts within three consecutive calendar days of the shifts being offered; or (2) in the case of shifts that are offered with less than three days’ notice, no employee accepts the shifts no less than 24 hours before the start of the shifts (unless impracticable under the circumstances). However, the employer must distribute the shifts to employees from other locations before the employer proceeds to hire or contract new employees. In the case of shifts that are offered with less than 24 hours’ notice, the employer must wait as long as is practicable under the circumstances before distributing the shifts to outside or new employees. However, where the employer owns at least 50 fast food establishments in New York City, it must only offer the work shifts to current employees at a subset of establishments based on their geographic distribution. 

A fast food employee’s written acceptance of an offer of shifts does not constitute a written request for a change in schedule. As such, a fast food employer must pay a schedule change premium to employees who accept additional shifts

A “schedule change premium” is money that an employer pays to an employee as compensation for changes the employer makes to the employee’s work schedule, including: canceling shifts, shortening shifts, or moving shifts to another date and time, including on-call shifts; adding additional hours to shifts that are already scheduled; adding previously unscheduled shifts to the work schedule; and not requiring employees to report to work during on-call shifts. This premium payment is not wages earned, but rather is in addition to wages. Schedule change premium payments range from $10 to $75 for each change to the work schedule.

Such premium payments must be made at the time the employer pays an employee wages owed for work performed during that workweek. Schedule change premium pay shall be separately noted on a wage stub or other form of written documentation and provided to the employee for that pay period.

Int 1384-2016 (Contributions to Nonprofits)

This bill provides fast food employees with the ability to make voluntary contributions to a nonprofit organization through payroll deductions. The employer must receive a registration letter from the nonprofit and written authorization from the employee. The authorization must include: 

• the fast food employee’s signature;
• the fast food employee’s 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 nonprofit
• a contact at the nonprofit for an employee who seeks to revoke authorization; and
• a statement notifying the fast food employee that contributions are voluntary and that the authorization to deduct is revocable at any time by submitting a written revocation to the nonprofit.

The employer must provide a copy of the employee’s authorization to the covered nonprofit within five business days of receipt. The authorization will remain in effect until the employee revokes the authorization in writing. An employer that fails to honor the revocation must refund the employee the amount of the contribution that was wrongfully retained. If the employer does not refund the employee within 60 days of receipt of the revocation, it will be required to pay interest at a rate of no less than six percent per year. 

An employer is only required to honor an employee’s authorization for a contribution if that contribution is at least $3 per week (if the employee is paid weekly) or $6 biweekly (if the employee is paid biweekly), and is no more than once per pay period. The employer will be required to make the first deduction no later than the first pay period after 15 days of receipt of the authorization and must remit the deductions to the nonprofit no later than 15 days after the deduction is taken. 

A fast food employer must provide written notice to its employees of their rights and the employer’s obligations regarding nonprofit contributions. The notice must be posted and must include a statement that labor organizations and employee organizations are not permitted to seek remittances under this regulation. 

General Provisions Governing Retail and Fast Food Employers

The Fair Workweek package of legislation also includes Int 1396-2016, which sets forth general provisions and definitions applicable to both fast food and retail employers including the following:  

No Retaliation 

Adverse employment actions and/or retaliation based on an employee’s good faith exercise of rights protected by the Fair Workweek laws are prohibited. All employees will be protected by anti-retaliation provisions when exercising their rights.

Notice and Recordkeeping Requirements      

Employers are required to post a notice of employee rights under the laws in an area accessible to employees at any workplace or job site where any employee works. The notice must be posted in English and any language spoken as a primary language by at least five percent of employees if the director has made the notice available in that language. The DCA is charged with making available appropriate notices.  

The law also requires employers to retain records for a period of three years that document compliance with the law. If an employer fails to maintain or retain these records, a presumption arises that the employer has violated the law.

Enforcement

Int 1396-2016 also provides for both administrative enforcement and a private right of action for aggrieved retail and fast food workers. Notably, the damages and penalties associated with violations of the new package are on a per employee and per violation basis. 

Administrative Enforcement

The DCA is charged with enforcing the Fair Workweek legislation. Any person alleging a violation of the law may file a complaint with the DCA within two years of the date they knew or should have known of the alleged violation.

Penalties for violating the substantive provisions of the law include: (a) rescission of any discipline issued, reinstatement , and payment of back pay for any loss of pay or benefits resulting from discipline or other action taken in violation of the anti-retaliation provisions; $500 for each violation not involving termination; and $2,500 for each violation involving termination; (b) $200 for violating the advance scheduling requirements and an order directing compliance; (c) payment of schedule change premiums that were withheld in violation of the law and $300; (d) payment for minimum time between shifts, $500, and an order directing compliance; (e) $300 for failing to offer additional shifts and an order directing compliance; (f) the greater of $500 or the employee’s actual damages for violating the “on-call” regulations and $300 for violating the scheduling requirements.

An employer is liable for a penalty of $500 for its first violation and, for subsequent violations that occur within two years of any previous violation of this chapter, up to $750 for the second violation and up to $1,000 for each succeeding violation. The penalties imposed pursuant to this section shall be imposed on a per employee and per instance basis for each violation.

Private Right of Action

The law also allows an employee or former employee to bring a private cause of action in any court of competent jurisdiction. The statute of limitation is two years. A court may order compensatory, injunctive, and declaratory relief, including payment of withheld schedule change premiums; an order directing compliance with the recordkeeping, information, posting, and consent requirements; rescission of any discipline issued; reinstatement; payment of back pay for any loss of pay or benefits; other compensatory damages; and reasonable attorneys’ fees.

Civil Action by Corporation Counsel for Pattern or Practice Violations

In addition to the above, the corporation counsel may commence a civil action on behalf of the city where reasonable cause exists to believe that an employer is engaged in a pattern or practice of violations. Available relief includes injunctive relief, civil penalties of up to $15,000, and any other appropriate relief.

What Employers Can Do Now

To prepare for the Fair Workweek legislation, covered New York City retail and fast food employers should begin to review and revise their scheduling policies and practices as necessary. Employers should assess their scheduling practices, timekeeping systems, and payroll practices; develop scheduling policies; and train management and other scheduling personnel in order to ensure compliance with the laws. In addition, employers should implement necessary administrative functions to ensure compliance with the Fair Workweek legislation’s strict notice and recordkeeping requirements.