NYC Proposes Rules Implementing Fair Workweek Law: Spelling More Concerns for Retail and Fast Food Employers
Author: Stephanie L. Aranyos (New York City)
Published Date: October 31, 2017
As we previously reported, New York City retail and fast food employers must prepare for the Fair Workweek Law set to go into effect on November 26, 2017. On October 16, 2017 the Department of Consumer Affairs Office of Labor Policy and Standards (DCA) published much anticipated proposed rules to implement the Fair Workweek Law and provide needed guidance to covered employers. Rather than providing needed clarity, the proposed rules add to the administrative headaches facing retail and fast food employers. The DCA will hold a public hearing on the proposed rules at 10:00 AM on Friday, November 17. Participants may sign up to speak in advance of the hearing or submit written comments by 5:00 PM on November 17. Covered employers should consider submitting questions, participating in the public hearing, and raising any and all questions and concerns now to encourage the DCA to develop clear rules.
While the primary focus of the proposed rules is on fast food employers, the DCA provides certain definitions, as well as recordkeeping requirements and enforcement procedures for both retail and fast food employers. Below is a summary of the proposed rules.
Proposed Rules Applicable to Retail and Fast Food Employers
Notice of Employee Rights
Employers are required to post a notice of employee rights in an area accessible to employees at any workplace or job site where any employee works. The proposed rules would require the notice to be on 11x17 inch paper and in font no smaller than 12 point. The DCA did not provide a proposed notice form for review or comments.
Restrictions on Posting Notice of Schedules
The proposed rules prohibit both fast food and retail employers from posting or otherwise disclosing to employees the work schedule of an “employee who has been granted an accommodation based on the employee’s status as a survivor of domestic violence, stalking, or sexual assault, where such disclosure would conflict with such accommodation.”
The Fair Workweek Law requires employers to retain records that document compliance with the law for a period of three years. The proposed rules require fast food and retail employers to “maintain and retain, in an electronically accessible format,” records that reflect:
Actual hours worked by each employee each week;
An employee’s written consent to any schedule changes, where required; and
Each written schedule provided to an employee.
Further, the proposed rules state that upon request, a fast food or retail employer must provide (i) an “employee’s work schedule for any previous week worked for the past three years within 14 days of the employee’s request,” (ii) “the most current version of the complete work schedule for all employees who work at the same location within one week of the employee’s request, provided that an employer not disclose the work schedule of any employee who has been granted an accommodation based on the employee’s status as a survivor of domestic violence, stalking, or sexual assault, where such disclosure would conflict with such accommodation.”
Fast food employers must also maintain documents that show: (i) good faith estimates, and (ii) “[p]remium pay to individual fast food employees and the dates and amounts of the payments, whether noted on an employee’s wage stub or other form of written documentation.”
Private Right of Action
The proposed rules also provide additional information for filing and withdrawing a private right of action. Prior to commencing a civil action, complaints filed with the DCA must be withdrawn in writing. Also, a person who initially filed a civil action containing claims based on the Fair Workweek Law may file a complaint with the DCA upon a showing that the Fair Workweek Law claims in the civil action have been withdrawn or dismissed without prejudice. The rules reiterate that the withdrawal of a complaint or the commencement of a civil action does not preclude the DCA from investigating, commencing, prosecuting, or settling a case against the employer based on some or all of the same violations.
Proposed Rules Applicable to Retail Employers
The proposed rules provide little to no clarification or guidance to retail employers regarding the scheduling of retail employees but do offer additional guidance to determine whether an entity qualifies as a covered “retail employer” under the law. The Fair Workweek Law defines a “retail employer” as “any employer that employs a retail employee at a retail business” defined as:
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 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.
The proposed rules clarify that “[e]ngaged primarily in the sale of consumer goods . . . means greater than fifty percent of sale transactions in a calendar year at one or more locations in the City are to retail consumers.” The proposed rules define “retail consumer” as “an individual who buys or leases consumer goods and that individual’s co-obligor or surety” and does “not include manufacturers, wholesalers, or others who purchase or lease consumer goods for resale as new to others.”
Proposed Rules Applicable to Fast Food Employers Only
The Fair Workweek Law prohibits fast food employers from requiring employees to work “clopening” shifts without additional compensation. The proposed rules define “clopening” as “two 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 calendar day or spans two calendar days.”
Good Faith Estimate
Under the Fair Workweek Law, fast food employers are required to provide employees with a good faith estimate of the number of hours an employee is expected to work. The law further provides that “[i]f a long-term or indefinite change is made to the good faith estimate, the fast food employer shall provide an updated good faith estimate to the affected employee as soon as possible and before such employee receives the first work schedule following the change.”
The proposed rules define “good faith estimate” to mean “the number of hours a fast food employee can expect to work per week for the duration of the employee’s employment and the expected days, times, and locations of those hours.” The proposed rules state that “[e]ach occurrence of a long-term or indefinite change for which a fast food employer fails to provide an updated good faith estimate constitutes a violation of the Fair Workweek Law.
The proposed rules define “long-term or indefinite change” to include the following nonexhaustive scenarios:
Three work weeks out of six consecutive work weeks in which the number of actual hours worked differs by twenty percent from the good faith estimate during each of the three weeks;
Three work weeks out of six consecutive work weeks in which the days differ from the good faith estimate at least once per week;
Three work weeks out of six consecutive work weeks in which the locations differ from the good faith estimate at least once per week; or
Three work weeks out of six consecutive work weeks in which morning, afternoon, or night shifts differ from the good faith estimate at least once per week.
The proposed rules further direct that “[m]orning, afternoon, or night shifts differ from the good faith estimate when a shift that was a morning shift is changed to an afternoon or night shift; a shift that was an afternoon shift is changed to a morning or night shift; or a shift that was a night shift is changed to a morning or afternoon shift.” The proposed rules further clarify that for purposes of this section, “[m]orning means 4:00 am to 11:59 am,” “[a]fternoon means 12:00 pm to 7:59 pm,” and “[n]ight means 8:00 pm to 3:59 am.” According to the proposed rules, “[a] shift shall be considered a morning, afternoon, or night shift based on when at least 50% of the shift is worked or scheduled to be worked.”
The proposed rules provide only one exception to the definition of “long-term or indefinite change,” which is that “a change in the time of shifts that is earlier or later by fifteen minutes or less shall not be considered.”
Minimal Changes to Shifts
According to the proposed rule, a fast food employer may change a work schedule by 15 minutes or less without being obligated to pay the fast food employee a schedule change premium.
Notice and Offer of Additional Shifts
The Fair Workweek Law requires fast food employers to 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. Unfortunately, the proposed rules do little to clarify these requirements of the law.
Under the proposed rules, a fast food employer must notify an employee in writing of the method by which additional shifts will be posted “upon commencement of a fast food employee’s employment with the fast food employer and within 24 hours of any change to or adoption of a method.”
The proposed rules provide some guidance through use of examples. For instance, a fast food employer is required to post notice of additional shifts for three consecutive calendar days. However, “[w]hen a fast food employer has less than three days’ notice of a need to fill an additional shift, the fast food employer shall post notice of the additional shift as soon as practicable after finding out about the need to fill the shift. In such circumstance, any existing fast food employee may be temporarily assigned to work a shift that is during the three-day notice period.” The example provided by the proposed rules states:
Example: On Wednesday at 9 am, a fast food employer receives a call from a fast food employee who tells her that she is quitting and she will not report for her regularly scheduled shift on Friday at 9 am. The fast food employer knew of the need to fill the shift 48 hours (or two days) in advance. The fast food employer may assign another existing fast food employee to the shift on the first Friday, but must post the available shift with three days’ notice to its employees and assign subsequent Friday 9 am shift to its existing fast food employees in accordance with its criteria in accordance with Section 20-1241 of the Fair Workweek Law and these rules before hiring a new employee.
The proposed rules also require that a fast food employer “notify all accepting fast food employees when the offered shift has been filled.”
The proposed rules also state that a fast food employer that owns 50 or more fast food establishments in New York City may offer additional shifts to: “(1) fast food employees who work at all locations in New York City, or (2) only to its fast food employees who work at its fast food establishments located in the same borough as the location where the shifts will be worked.”
Accepting and Awarding Additional Shifts
The Fair Workweek Law regarding offering additional shifts to fast food workers is vague and complex. Rather than provide clarity, the proposed rules create a more complex web of administrative hurdles for employers.
One of the most administratively challenging rules permits a fast food employee to accept only a “subset of additional shifts offered by a fast food employer.” The “subset of shifts” is defined as “one or more shift or shift increments.” A “shift increment” is defined as “a portion of a shift.” An employee may accept an entire shift offered or any shift increment, with one exception. An employer is not required to award a shift increment accepted by the employee when the remaining portion of the shift is three hours or less and was not accepted by other employees.
Even more challenging for employers is that under the proposed rules when an employee accepts an offered shift that overlaps with an existing shift, “the fast food employer shall award the fast food employee the offered shift in lieu of the fast food employee’s scheduled shift.” (Emphasis added.) Employers are prohibited from conditioning “the award of the offered shift on a fast food employee’s willingness to work both the non-overlapping hours of the existing shift and the offered shift.” The example provided by the proposed rules states:
Example: A fast food employee’s work schedule includes a shift on Mondays from 7 am to 3 pm. The fast food employer notifies employees of an additional shift on Mondays from 9 am to 5 pm, a shift that overlaps with the fast food employee’s existing shift. The fast food employee accepts the shift because it will allow the employee to drop the employee’s child off at school in the morning without reducing the employee’s overall hours. The fast food employer must award the additional shift to the fast food employee before hiring a new fast food employee for the additional shift, provided the fast food employee otherwise meets the employer’s criteria for distribution of the shift.
An employer would not be required to award additional shifts to an employee if that shift would entitle the employee to overtime pay. However, the employer must award the “largest shift increment possible that would not trigger overtime pay, provided that the remaining portion of the shift was accepted by another fast food employee or is three hours or more.” The example provided by the proposed rules states:
Example: A fast food employer offers a shift on Wednesday from 12 am to 6 am to its employees. A fast food employee who is scheduled to work 37 hours during the week accepts the additional shift. The employer must award at least three hours to the fast food employee but is not required to award the entire six-hour shift to the employee because working more than forty hours would result in the employee becoming eligible for overtime pay.
Contributions to Nonprofits
The Fair Workweek Law also provides fast food employees with the ability to make voluntary contributions to a nonprofit organization through payroll deductions. The DCA published separate proposed rules regarding the implementation of the pay deduction law. The DCA will hold a public hearing on Friday, November 17 at 10:00 AM and will accept written comments through 5:00 PM November 17. The proposed rules implementing pay deductions purport to clarify when a fast food employer is permitted to start making deductions, what a false or misleading disclosure is, and other information regarding procedures to follow in connection with making permissible pay deductions.
What Employers Can Do Now
To prepare for the Fair Workweek Law, covered New York City retail and fast food employers may want to closely review the proposed rules and consider submitting comments and/or attending the hearing scheduled for November 17. Employers may want to review their scheduling policies and practices and understand the impact of the Fair Workweek Law and proposed rules for implementation. Employers can take the following steps to prepare for the law’s implementation:
assess their scheduling practices, timekeeping systems, and payroll practices;
develop scheduling policies and schedule change request forms; and
train management and other scheduling personnel in order to ensure compliance with the laws.
In addition, employers may want to implement necessary administrative functions to ensure compliance with the Fair Workweek Law’s strict notice and recordkeeping requirements. Most importantly, covered employers should make their voices heard regarding the proposed rules and the rules’ failure to clarify and address key issues facing covered employers.
Stephanie Aranyos serves as of counsel in the firm’s New York City office. Ms. Aranyos advises and represents employers in a broad spectrum of employment and labor matters involving the Fair Labor Standards Act, Title VII, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Family and Medical Leave Act, the National Labor Relations Act as well as many other federal and state laws affecting employment and labor. Ms. Aranyos frequently represents employers...